Local authority liability in New Zealand for defective homes

Purpose: The purpose of this paper is to assess the legal liability of local authorities in New Zealand for the issue of building consents and inspection, in respect of domestic homes where the property proves to be faulty. A local authority may be liable for economic loss. The duty of care extends to the owners of multi-unit dwellings, but not commercial buildings. A ten year longstop for claims from council approvals applies. Problems with leaky homes have given rise to a substantial number of claims. A government response has been to provide a mediation service, and to assume liability for a percentage of repair costs. Design/methodology/approach: The history of liability of local authorities for negligence in respect of building approvals is assessed, through examination of the statute law and the common law principles. Findings: The findings of liability of local authorities in New Zealand is compared to the legal position in the UK. Conclusions are drawn as to legal and practical outcomes. Originality/value: Changes under the law have occurred within the last year and the study is original in assessing the legal position and future outcomes. The liability for leaky homes is a major issue in the country.