The Licensed Building Practitioner Scheme questions

What is the Licensed Building Practitioner Scheme?

The Licensed Building Practitioner Scheme is a licensing scheme to help ensure that people in the building industry are competent and accountable, so that homes and buildings are designed and built right the first time.

Licensing began on 1 November 2007, with licensing currently available in 10 classes, from designers and carpenters through to roofers and exterior plasterers.

Other licensing classes are being developed. A full list of licensing classes is available here.

To become licensed, applicants have to show that they meet the national standard(s) for the licensing class(es) they apply for.

The Scheme was developed by the Department of Building and Housing, with extensive input from the building industry.

Licensed building practitioners are listed on an online register that members of the public can access to find out whether building professionals are licensed.

From 1 March 2012, certain types of restricted building work must be carried out or supervised by licensed building practitioners.

Why was licensing introduced?

Many changes occurred in the building industry in the 1980/90s, resulting in some building failures - notably, leaky buildings.

The Licensed Building Practitioner Scheme aims to improve building quality and increase consumer protection by:

• setting national standards of competence for people carrying out certain design and building work
• helping consumers choose competent building practitioners
• ensuring design and building practitioners are accountable for their work.

Who administers licensing?

The Department of Building and Housing administers the licensing of building practitioners, including:

• developing licensing standards
• managing assessment
• issuing licensing ID cards for those who meet the relevant standards
• managing the public register of licensed building practitioners.

A government-appointed Building Practitioners Board hears complaints about licensed building practitioners’ work and hears appeals about licensing decisions.

A Registrar appointed by the Department decides on licensing applications (based on assessors’ recommendations), administers the online register of practitioners.

The Registrar also helps the Building Practitioners Board receive and investigate complaints, and records (on the online register) any disciplinary action taken against licensed building practitioners.

How does licensing benefit building practitioners?

Being licensed shows that a practitioner is competent and has the skills, experience and knowledge to do good work. This has value for employers and customers. More broadly, licensing will help restore public confidence in the building industry.

This will benefit all industry participants who are competent and act professionally. Licensing will also encourage the development of clear career pathways for the industry.

While licensing is voluntary, from 1 March 2012 building practitioners will have to be licensed to carry out certain restricted building work. This provides an incentive to become licensed, because unlicensed building practitioners will, from that date, have to engage a licensed practitioner to either carry out or supervise restricted work.

How does licensing benefit consumers?

Licensing helps to ensure that building work is designed and carried out or supervised by competent people. This will give property owners and property buyers more confidence that design and building work has been done properly.

The online register of all licensed building practitioners helps potential employers, customers and clients find suitable licensed building industry professionals.

Property owners can complain to the Building Practitioners Board about licensed building practitioners if their work is sub-standard.

Will consumers have options for resolving disputes?

The current review of the Building Act will look at a range of options for resolving disputes, including what other countries do. For example, Victoria, Australia has a disputes resolution service that sorts out disputes between builders and consumers relatively informally. It also has a dedicated tribunal that rules on serious building disputes.

Licensing

Is licensing compulsory?

No. The Licensed Building Practitioner scheme is voluntary. Being licensed is a personal and business choice for people with the skills and experience to meet the relevant licensing class standards.

However, from March 2012, work defined as restricted building work will only be able to be carried out or supervised by licensed building practitioners.

How many people will be licensed?

About 20,000 building practitioners are expected to be licensed by 2012. This number is sufficient to enable restricted building work requirements to be implemented.

How does a tradesperson become licensed?

Application packs for each of the licensing classes are available by calling the Department of Building and Housing on 0800 60 60 50 or by visiting the Department's website.

Applicants need to specify which class(es) they are applying for so that they get the right application pack. A booklet is also available to help applicants select the most appropriate class(es) to apply for.

Application packs contain a generic application form and an application form for the specific class the applicant is seeking. Accompanying guidance notes are included to help applicants fill out the forms.

Building practitioners can apply to be licensed in more than one class, but must be able to show that they can meet the standard of competence of each class they apply for.

Does a tradesperson have to be qualified to become licensed?

No. The Licensed Building Practitioner Scheme is competency based, and a number of people without formal qualifications have already been assessed as competent and been granted licensing.

Tradespeople who don’t hold formal qualifications have nothing to fear from licensing. The assessment process means that competent builders and tradespeople with a good track record can have their skills and knowledge formally recognised, whether they are trade-qualified or not.

Applicants must provide examples of projects they have worked on. They are required to answer questions about these projects and provide referees who can confirm what they did and how they performed. An industry trained assessor makes a recommendation to grant licensing based on the evidence provided with the application and their discussions with the referees and the applicant.

For those with a good track record and who are trade qualified it is proposed to make getting assessed and licensed more straightforward, faster and cheaper.

Even if these proposals go ahead, applicants who are not trade-qualified will still be able to have their competency assessed based on their track record, project examples and referee recommendations.

How much does it cost to become licensed?

Licensing costs for all classes include:

• a one-off application fee of $80
• a one-off assessment fee
• an annual administration fee of $170

Licensing assessment costs between $275 and $330 for the Site and Trade licensing classes, provided the application can be desk-top assessed based on the material supplied.

Assessment for the Design classes costs between $760 and $990 because all assessment requires a face-to-face meeting.

Will licensing add to building costs and, if so, to what extent?

Restricted building work requirements will affect about $4 billion of building work each year, a third of the $12 billion spent annually in the building and construction sector as a whole.

The cost to the sector of 20,000 people being licensed is estimated at about $9 million, with an ongoing annual renewal cost of just under $4 million. There will also be indirect costs associated with the time required to maintain skills and to complete licensing and licensing renewal forms. The direct cost to the sector is estimated at less than 0.02 percent (one fifth of one percent) of the $4 billion of building work affected by restricted building work. This might add $300, or about 0.1 percent to the average cost of building a house.

The costs of licensing will inevitably be built into the price of building work, but these costs are outweighed by the benefits of licensing because:

• Only people who have been assessed as competent will carry out critical work. The need for costly re-work will be reduced
• Building and construction practitioners will have to keep their skills and knowledge up to date. This will raise skills and contribute to increased productivity over time
• Consumers and employers will be easily able to identify competent people
• Council-related consent and inspection costs can be reduced, because councils will be able to place increased reliance on building practitioners being competent and accountable.

Isn’t licensing just more bureaucracy?

Licensing for skilled professionals in the building industry is common overseas. In response to problems with leaky buildings, the New Zealand government consulted with industry and was advised to introduce some form of occupational regulation to address problems with the quality of construction. Licensing is the result.

Are there any similar licensing scheme in New Zealand?

Yes. Electrical workers, plumbers, gasfitters and drain layers are required to demonstrate they meet national standards before they can carry out certain work. Registered architects and chartered engineers also have their own registration schemes.

Why is licensing taking so long to implement?

The licensing scheme has been operating as a voluntary “quality-mark” scheme since November 2007.

It has taken longer to complete the policy detail for restricted building work and an exemption for owner-builders than was first anticipated when the Building Act 2004 was being developed.

However, the policy framework for the scheme is now complete, which provides certainty for the building and construction sector going forward. March 2012 is a realistic timeframe to ensure that sufficient practitioners are licensed.

How do independent qualified persons (IQPs) fit in with licensing?

IQPs inspect the systems that have to be regularly inspected and maintained for a building’s annual Building Warrant of Fitness - eg, lifts, fire systems, and heating and ventilation systems.
A consultation paper on streamlining the Licensed Building Practitioner Scheme issued on 27 August 2009 proposes that licensing for this group not proceed.

Do licensed building practitioners need professional indemnity insurance?

No. The Scheme does not require practitioners to carry professional indemnity insurance.

How will licensed building practitioners sign off on their jobs?

Licensed building practitioners will be required to issue a memorandum recording that they carried out or supervised restricted building work on a project.

The memorandum issued by Design licensed building practitioners will state that the building consent plans and specifications will comply with the Building Code. The memorandum issued by Trade licensed building practitioners will record the restricted building work that they carried out or supervised.

The memoranda will be held on council files.

Councils and licensing

Don’t councils already check that building work is being done properly?

Yes – and the Licensed Building Practitioner Scheme doesn’t change this. Council Building Consent Authority (BCA) inspectors will still inspect all building work listed on building consents.

However, relying on inspections alone is not enough. Good quality buildings are built when competent licensed building practitioners do the right thing from the start, rather than relying on the building inspector to tell them what to do or waiting to see if they get caught out.

An expected outcome of the Building Act review announced in August 2009 is that the building consent and inspection process will be cheaper and faster for licensed building practitioners. For example, when licensing is fully implemented the number of inspections for a standard house is expected to reduce from the current 12-15 down to four. This will cut inspection costs. It will also cut building time by up to four weeks, with potential savings of thousands of dollars in finance/holding costs.

Over time licensing will raise the quality of building work.

Do councils have a role in licensing?

Council BCAs issue building consents and inspect for Building Code compliance. The Licensed Building Practitioner Scheme does not diminish or change the importance of this role and BCAs will continue to do this work.

When restricted building work takes effect in March 2012, BCAs will also ensure that:

• plans and specifications have been submitted by licensed designers
• the names of the licensed building practitioners involved in restricted building work on a project have been recorded on their file.

Restricted building work

What is restricted building work?

Restricted building work will apply to design and building work that is critical to the integrity of a house or small-medium sized apartment building.

This means:

• The design and construction of the foundations and framing – to ensure the building can withstand vertical and horizontal loads
• The design and construction of roofing and cladding – to ensure the building is weathertight
• The design of active fire alarm systems in small-medium sized apartments – to ensure people are alerted to the dangers of smoke/fire etc.

This sort of work is complex, needs to be done right, and should therefore be done by a competent person.

Restricted building work will not apply to any building work that does not require a building consent.

All restricted building work will have to be carried out or supervised by a licensed building practitioner.

Why wait until 2012 for restricted building work to apply?

A phase-in period will give industry time to adjust. It will ensure that when the restricted building work requirements apply, sufficient practitioners are licensed to carry out or supervise restricted building work.

What happens between now and March 2012 in terms of restricted building work?

Anyone can continue to carry out this type of work, though builders are accountable under the implied warranty provisions of the Building Act 2004 for the quality of their work.

Why won’t restricted building work apply to all buildings?

Applying restricted building work to complex commercial building projects involving large numbers of tradespeople would add administration time and cost without providing additional benefit.

Commercial construction and most high-rise apartment buildings are typically undertaken by professionally managed construction companies and problems that arise are already managed effectively through commercial contractual arrangements. People purchasing a new home or a small-medium sized apartment often don’t have the same protections.

Does the exclusion of big buildings mean people won’t need to be licensed to work on them?

Workers in the building and construction sector don’t just work on one sort of building type.

In practice, many workers on commercial projects and high-rise apartment buildings will become licensed to have their competence recognised, and because it will allow them to carry out or supervise a wider range of building work.

Why isn’t all work needing a consent defined as restricted building work?

A significant portion of building work is low risk or is already effectively managed through commercial contractual arrangements. Defining all work as restricted would impose additional costs on building practitioners and society at large, without providing additional benefits.

Will there be penalties for an unlicensed person doing restricted work?

Yes. Once restricted building work takes effect, a person who carries out this work without holding the appropriate licensing class, and who works without supervision from a licensed person, may be fined up to $20,000.

This will not apply to DIYers who claim an exemption from restricted building work requirements.

Why should a building practitioner become licensed now, when restricted building work won’t apply until March 2012?

From the date they are licensed a building practitioner can promote to potential customers that they have met the competency requirements for licensing. Now that the Government has taken final decisions about the scheme, licensed practitioners will have a competitive edge over those who are not yet licensed.

Won’t it simply cost them money to renew their licence annually?

There is an annual cost of licence renewal but, having met the initial licensing assessment requirements, renewal is a simple process and, at less than $200, the cost is modest.

There are good reasons for becoming licensed early:

• The public is able to search the public register of licensed building practitioners to find a practitioner. Being licensed early means that the practitioner’s name comes up earlier on the register.
• An expected outcome of the Building Act review announced in August 2009 is that building consent and inspection process will be cheaper and faster for licensed building practitioners.
• Becoming licensed early ensures that building practitioners have time to work through the application process and adjust to the requirements of being licensed before restricted building work takes effect.

Restricted building work and DIY

What work can a DIYer do, when restricted building work applies?

Most of the work that DIYers undertake will not be affected by restricted building work requirements because:

• a lot of DIY work does not need a building consent
• much of the work that DIYers do that needs a building consent will not be restricted building work because the work is not critical to the integrity of the building.

Restricted building work won’t apply to the installation of a door or a window, most kitchen and bathroom renovations, and free-standing decks less than 1 metre high, because this work does not require a building consent.

Nor will restricted building work apply to work like removing an internal wall or building a conservatory, or to buildings that aren’t regularly occupied, like garages, carports, sheds, fences and retaining walls, and farm buildings.

Is there any effect on DIYers between now and March 2012?

No. Until restricted building work is introduced in March 2012, there is no limit to the work a DIYer can undertake, subject to council building consent requirements.

How will DIYers get an exemption from restricted building work requirements?

DIYers will be able to claim an exemption from restricted building work requirements when they apply to their local building consent authority (council) for a building consent, if a consent is needed for their proposed work.

Various conditions will apply to the exemption. These require that the person seeking the exemption:

• Is an individual (they can’t be a company or trust)
• Has a legal, beneficial or equitable interest in the property
• Lives in, or intend to lives in the property (this includes a bach or holiday home)
• Carries out the work themselves, or with a close friend or relative
• Completes statutory declarations at both building consent and code compliance certificate stages that they meet these conditions.

Why does a DIYer have to declare that they did restricted building work?

There are two main reasons for the declaration:

• Prospective home-buyers need to be able to decide for themselves if they want to buy a home built by a DIYer. If something goes wrong with the house they will be able to take this up with the DIYer by finding the details on council files.
• Overseas experience with similar rules shows that some tradespeople who do not meet licensing standards may use the exemption as a back-door way of carrying out restricted building work without being licensed.

There is little history of significant problems with building work done by DIYers because they generally recognise their limits and get professional help when needed. However, safeguards are necessary, for consumer oprotection.

Is any liability attached to the exemption?

A DIYer who obtains an exemption will be accepting accountability for the work.
This means that a future owner of the property could take legal action against the DIYer if work that was subject to the exemption turned out to be faulty.

Would it be an offence to sign an incorrect declaration?

Yes. Supplying false or misleading information in a declaration for an exemption would be an offence under the Building Act 2004, with a fine of up to $5000.

Can a DIYer employ tradespeople to help them out?

Tradespeople can only carry out or supervise restricted building work if they are licensed. So, a DIYer who applies for an exemption will be able to do restricted building work themselves or be helped out by close friends and family. If they employ a tradesperson to help them carry out restricted building work, that tradesperson must be licensed.

Can a DIYer employ family and friends?

A condition of the exemption will be that people who help you to carry out restricted building work must be “a close friend or relative”. DIYers who carry out restricted building work will be accountable for that work so it is unlikely that they would want assorted friends and relatives to help out unless they were totally satisfied with their competence.

Couldn’t builders pretend to be DIYers to get around licensing requirements?

Anyone claiming the exemption will be required to make a statutory declaration that they meet the conditions of the exemption. These conditions are that they:

• Are an individual
• Have a legal, beneficial or equitable interest in the property
• Live or intend to live in the property (this includes a bach or holiday home)
• Will carry out the work themselves or with a close friend or relative.

Under the Building Act a person may be fined up to $5000 for supplying false or misleading information.

Will a DIYer be able to get more than one exemption?

A further exemption will be available three years after the DIYer completes work on the property for which the earlier exemption was sought. This, together with the other conditions for an exemption, is designed to prevent restricted building work being carried out by people who are working in the industry but are not licensed building practitioners.

How will restricted building work affect a DIY landlord?

Most of the work landlords do on their property will not be affected because their work is effectively DIY work and generally involves work that either does not require a consent or will not be restricted building work.

The requirements would only apply if the landlord was doing major work such as adding a room.

Will rents go up if landlords have to employ builders to do the same work they could do cheaper?

Like any DIYer, a property investor would only have to engage a licensed building practitioner if they were doing major work such as adding a new room.