MBIE has introduced the BuiltReady scheme – a voluntary modular component manufacturer certification scheme established under the Building Act 2004, the Building (Modular Component Manufacturer Scheme) Regulations 2022 (the Regulations), and the BuiltReady scheme rules.
The scheme took effect from 7 September 2022 and is currently the only specific modular component certification scheme in Aotearoa New Zealand. Under the scheme, certified and registered manufacturers will be able to design – where applicable – and manufacture modular components that will be deemed to comply with the requirements of the Building Code. This is provided that the certificate is current and valid.
The purpose is to promote a more consistent building consent route for manufacturers that meet performance and quality standards. The scheme has been introduced alongside a revised CodeMark scheme.
Note that applications for the BuiltReady scheme will open in 2023 for manufacturers. It is available to all modular building manufacturers who supply modular components for installation in Aotearoa.
How the BuiltReady scheme works
Modular construction is becoming more popular in the industry. Modular components are building elements that are prefabricated off site and then shipped to the construction site. These could arrive fully or partially assembled.
A manufacturer – provided they meet certain certification and registration criteria – can apply for certification from an accredited and registered modular component manufacturer certification body (MCMCB) in one of two ways:
- They may be certified to manufacture only the building component to a Building Code-compliant design.
- They may be certified to both design and manufacture the component to a Building Code-compliant design that the manufacturer developed and created. Once the manufacturer is evaluated and granted certification, they must apply for registration with MBIE. Once registered, they can issue a manufacturer’s certificate under the scheme that proves that a component meets the requirements of the Building Code.
Building consent authorities must accept a manufacturer’s certificate issued under the BuiltReady scheme as complying with the New Zealand Building Code when it is used in building work. This is as long as the component is designed and manufactured and used in accordance with the scope of their certification. The article BuiltReady scheme in Build 193 on pages 80–81 has more information.
Assessment process
It is important to note that the whole process of assembly, manufacture, transportation and installation will be assessed by accredited and registered MCMCBs.
Audits and post-certification surveillance of the manufacturer will also be done at least once a year to check that the manufacturer continues to meet certification criteria and ensure the modular component continues to comply with Building Code requirements. As part of this surveillance, the MCMCB may request the manufacturer to disclose internal audit reports and results of internal quality controls and compliance records.
Another key aspect of the assessment process for manufacturers is registering with MBIE. Once a manufacturer has been certified, they must then show MBIE they meet the registration criteria outlined in the regulations.
Manufacturers will need to:
- satisfy a fit and proper person assessment by providing information relating to key personnel and conflicts of interest
- agree to notify MBIE of any changes in circumstance
- demonstrate adequate means to cover any potential civil liabilities in relation to the scheme.
Strict criteria
Importantly, the evaluation criteria that a manufacturer must meet are extensive. They include the requirement to have a quality management system and quality plan in place with internal audit procedures to demonstrate ongoing compliance.
A manufacturer must notify the MCMCB within 5 working days of any reason to suspect that a modular component no longer complies with the Building Code.
The manufacturer is also required to notify the MCMCB and MBIE ‘without delay’ if a modular component is going to be recalled and to disclose non-compliance in disclosure statements – which will be published to the responsible MCMCB and to MBIE’s Chief Executive. This provides protection for consumers and arguably mitigates the risk of liability for the MCMCBs.
Impacts of the BuiltReady scheme
There are several issues that the scheme aims to address. Firstly, under the current building consenting system, it is not entirely clear how modular components are to be approached as they do not necessarily fit the traditional construction methods category.
Secondly, consenting authorities base their compliance decisions on reasonable grounds, which is largely discretionary and undermines certainty for manufacturers.
In addition, for components that are manufactured off site, in-person inspections are often impractical and result in delays – particularly where products arrive on site enclosed, which means that visual inspections are often difficult to undertake.
Saves time, cost and waste
The scheme will provide benefits of reduced construction waste due to efficiency of use of building materials and a more consistent approach to consenting for off-site manufacturers with fewer inspection requirements. It will also see an increase in the use of modern methods of construction and provide confidence for the industry that a modular component manufactured under the scheme is Building Code compliant. For builders in particular, the greater use of modern methods of construction will likely reduce construction time and incidence of rework. For homeowners, the scheme will mean lower building costs and faster building consent and build times of quality assured homes and developments.
Disclaimer: This article is not intended as legal advice. For specific advice, contact your legal advisor or the Major Projects and Construction Team at Dentons Kensington Swan.