The Government expects its reform of the building consent system to take effect in 2026. But investors should not assume they have until then to prepare. Lenders and insurers will start changing their requirements long before Parliament passes anything.
Banks price risk in real time. Once the Government signals a shift, lenders act as if the law is already here. Proportionate liability and insurance obligations will quickly become part of loan approval conditions.
āDo not wait for the Bill to pass,” says Sarina Gibbon, APIA GM. “Banks will want to see that your project is protected well before the law changes. They are not in the business of lending into uncertainty.ā
Investors should expect banks to ask for:
- Proof of warranty cover or indemnity insurance.
- Evidence of contractor solvency, track record, and insurance.
- Detailed contracts, inspection records, and risk assessments as part of applications.
- Clear risk cover before approving funds, with weak projects facing higher costs or refusal.
This is the same pattern seen in Australia. When liability rules and warranty schemes were introduced there, banks moved first. They demanded cover and documentation years before regulators enforced anything. New Zealand lenders will follow suit.
The practical steps for APIA members are clear. Talk to your lender now and ask what protections they expect to see over the next 12 months. Build warranty and insurance costs into your feasibility models and treat them as non-negotiable. Prepare your contractors to provide the paperwork banks will require. Keep your records sharp and accessible, because strong documentation...
