The long-awaited building product information requirements (BPIR) that came into force in December 2023 introduced new obligations for Aotearoa New Zealand-based manufacturers, importers, wholesalers, retailers and distributors.
Why the changes were made
The changes came against the backdrop of an increased focus in recent years on manufacturers of building products both from a regulatory and liability perspective. While manufacturers have successfully defended themselves against numerous claims over the last 10 years – especially since the Supreme Court confirmed that the 10-year longstop in the Building Act 2004 does not apply to building products – there have been increasing claims against manufacturers, with mixed results.
There are some key considerations for manufacturers and importers of building products in Aotearoa in relation to the Building (Building Product Information Requirements) Regulations 2022. Responsibilities of manufacturers and importers
The regulations require manufacturers and importers to provide a minimum level of easy-to-understand information about designated building products they supply to the Aotearoa market. This information must be publicly available online and in store.
MBIE has published detailed guidance and resources on its website to support those affected by the changes – see building.govt.nz/building-codecompliance/product-assurance-and-certification-schemes/building-product-information-requirements.
Consequences of non-compliance and enforcement
The Building Act provides several mechanisms to address non-compliance with the regulations, including substantial fines.
An individual or body corporate that fails to comply with the regulations commits an offence under the Building Act and is liable on conviction to a fine. If they make a representation about a building product that is unsubstantiated or is false or misleading, they are liable on conviction to a fine not exceeding $200,000 for an individual or $600,000 for a body corporate.
Regulated parties should take their obligations seriously given the risk of significant penalties for non-compliance.
Key takeaways
There are four key takeaways for building product manufacturers and importers following the regulation changes.
Understanding the obligations
It is important that manufacturers and importers are familiar with their obligations given the significant consequences for breaching the regulations:
- Products are divided into two classes with different disclosure requirements.
- The obligation to disclose accurate and substantiated information is ongoing – information must be up to date and accurate at all times.
- The BPIR apply to designated building products manufactured in or imported into Aotearoa on or after 11 December 2023. This means that there may be existing stock that the BPIR do not apply to. However, it would be prudent to proceed on the basis that all designated products are subject to the BPIR.
Importance of providing accurate and robust information
Manufacturers and importers must ensure that any statements regarding their product’s performance have a robust evidentiary basis – for example, independent product testing. They may also want to consider obtaining independent advice in relation to their obligations. Interpreting the Building Code requirements can be complex and may require both legal interpretation and the input of an independent expert such as a building surveyor or engineer.
Impact on legal liability
Liability will depend on the facts, but information included in a manufacturer’s or importer’s BPIR disclosure may impact on their potential liability to claims from end users of their products beyond liability imposed by the Building Act:
- Contract – if there is a contract between the manufacturer or importer and the end user – for example, a product warranty – and the contract refers to information in the BPIR disclosure, an end user may be able to bring a breach of contract claim if the product does not comply with the BPIR disclosure.
- Negligence and negligent misstatement – the Aotearoa courts have confirmed that manufacturers of building products, including overseas manufacturers, can owe a duty of care to the end users of their products. Statements or representations in the BPIR disclosure will likely inform the duty of care that the manufacturer or importer owes to the end user.
- Fair Trading Act 1986 (FTA) – it is a breach of the FTA for a person in trade to engage in conduct that is misleading or deceptive or likely to mislead or deceive, to make false representations in connection with the supply and promotion of the product or to mislead the public as to the nature, manufacturing process, characteristics, suitability for a purpose or quantity of goods. An end user could rely on information in the BPIR disclosure to bring a claim under the FTA.
- Consumer Guarantees Act 1993 (CGA) – if the product is not of acceptable quality and/or does not correspond with the descriptions applied to the goods, an end user could also rely on information in the BPIR disclosure to bring a claim under the CGA. It is important to note that the Building Act legislative regime sets the minimum performance requirements for buildings in Aotearoa. However, a manufacturer or importer may have legal liability beyond these minimum requirements. This will be informed by a multitude of other factors, including statements and representations that the manufacturer or importer makes about their product and the industry expectation for that product.
Overseas manufacturers and parent companies
The regulations only directly apply to Aotearoa-based manufacturers. However, overseas manufacturers and parent companies of Aotearoa subsidiaries should pay close attention to the new regulations as they may still impact them:
- An overseas parent company of an Aotearoa manufacturer or importer may owe a duty of care to a third party directly affected by the operations of its subsidiary in certain circumstances. As outlined, this duty may be informed by information published in the BPIR disclosure.
- An overseas manufacturer may have exposure to claims from its importer in Aotearoa if the manufacturer provides information that is unsubstantiated or false or misleading and the importer relies on that information to comply with the BPIR.
NOTE This article is not intended as legal advice. For more information or specific advice, contact Janine Stewart at Janine.Stewart@minterellison.co.nz.