The Ministry of Building Innovation and Employment (MBIE) has issued an options paper seeking submissions on changes to the Building Consenting System. One of the issues being discussed is the legal effect and use of producer statements. This article examines the current status of producer statements and summarises the options being considered for reform in this area.
The term ‘producer statement’ is a widely used term for a document that confirms an opinion about design or construction works. The Building Act 1991 explicitly stated that building consent authorities could, at their discretion, accept a producer statement as establishing compliance with the building code. A producer statement could supplement for the building consent authority reviewing plans or conducting inspections itself.
This power was not carried over to the current Building Act 2004 due to concerns that building consent authorities had become over-reliant on producer statements. As producer statements, therefore, have no legal status under the Building Act 2004, producer statements are placed in the same category as other information that building consent authorities may consider, to determine whether works have met the requirements of a building consent. As there is no legal status, the use and approval of producer statements varies between building consent authorities.
MBIE considers this creates the following issues:
- there is no certainty, clarity or consistency about the use of producer statements
- a requirement for indemnity insurance is applied in an ad hoc fashion
- information is not easily accessible
- the specific wording of producer statements must be reviewed carefully as they can vary greatly
- there is uncertainty among building consent authorities as to the extent to which they can rely on producer statements
To alleviate the above concerns, MBIE proposes three options for providing more certainty and consistency around producer statements:
- Option 1 (Guidance Option) - Centralise and update MBIE
guidance on producer statements, including the purpose of such statements, what they can be used for and criteria to assess reliability. - Option 2 (Framework Option) - Amend the Building Act to refer to producer statements and how they should be used, set factors to assess the reliability of producer statements and non-prescriptive legislation, regulation and guidance.
- Option 3 (Prescriptive Option) - Prescribe all aspects of producer statements including:
1. who issues them
2. what they must be required for
3. what building work requires peer review producer statements
Of the above options, MBIE prefers option 2 as it strikes a balance between providing the sector and building consent authorities with more clarity, while still enabling some flexibility amongst building consent authorities.
From a legal perspective, signing a producer statement is a serious matter and should only be undertaken with caution. Producer statements are a representation that the author makes with respect to the confirmations given about the building works.
The producer statement is a standalone document and is not contained within the building contract, which may have exclusions and limitations of liability that protect the author. Without those exclusions and limitations, a signed producer statement raises serious liability issues for the author if there are eventual problems with the building works.
Despite not having any formal legal status, the use of producer statements remains prevalent throughout the building consent process. Accordingly, any changes to the recognition and
implications of the use of producer statements should be of interest to those operating in the industry.
This article is of a general nature and is not intended to be relied upon as legal advice.
