What is actually being proposed
The Government has said it intends to move construction liability away from the current joint and several model, where one party can end up on the hook for the full cost of a defect even if several parties contributed to it. The proposal is proportionate liability: each party would only be required to pay their fair share for the defective work they actually contributed to.
Alongside that, mandatory home warranties are proposed for new residential buildings of three storeys and under, and for renovations of $100,000 and above. The cover being proposed is a 1-year defect period followed by a 10-year structural warranty. Design professionals — architects and engineers — would be required to hold professional indemnity insurance under the proposal. That requirement would not extend to builders; it sits specifically with the design side of a project.
Maximum penalties for Licensed Building Practitioners are also part of the package: the maximum fine would rise from $10,000 to $20,000, and the maximum suspension from 12 months to 24 months.
None of this is law. The Building Amendment Bill was expected to be introduced in early 2026, and even once introduced, a bill still has to pass. MBIE’s own guidance points to roughly a year of implementation after that before proportionate liability and the new requirements are operational — putting the earliest realistic start around 2027. This is proposed, not current, and worth reading with that framing held onto the whole way through.
Why “prove what was agreed” starts to matter more
Proportionate liability sounds like a technical change to how blame gets divided up after something goes wrong. Read it from a trade business’s side, though, and the practical shift is about evidence. Under the current model, being pursued for the full cost of a defect does not necessarily depend on exactly what you agreed to do, because liability can land on whoever is easiest to pursue. Under a proportionate model, your share depends on what you were actually responsible for — which means what you can show you were and were not responsible for starts to carry real weight.
That is a change in what a written record is worth, not a change in what a written record is. An enquiry that turned into a quote, a quote that turned into an agreed scope, a variation that was raised and confirmed by text — none of that is new paperwork. It is the ordinary trail a job leaves behind, and under a proportionate model it becomes the thing that shows where your part of a job started and ended.
Ten years is a long time to remember a phone call
The proposed structural warranty runs for ten years. Most trade businesses do not keep detailed records of a phone conversation from a decade ago, because there has rarely been a reason to. If mandatory home warranties go ahead in anything like their proposed form, that changes. A dispute two, five, or nine years after a job finished would turn on what was agreed at the time — and memory is not evidence.
This is the honest, narrow point of this post. A timestamped written record of every enquiry, quote and promise is exactly what a front desk produces as an ordinary part of doing the job — not a special compliance measure, just the paper trail of who asked for what, what was quoted, and what was confirmed. If proportionate liability and a ten-year warranty period do arrive, that ordinary record becomes more useful for longer than it used to be. We are simply pointing out that connection. We are not saying it changes your legal exposure, because we are not in a position to say that.
The distinction that is easy to blur
It is worth being precise about one part of this proposal, because it is the part a reader is most likely to already know something about. Professional indemnity insurance, as proposed, would apply to design professionals — architects and engineers. It would not apply to builders. If you run a building, plumbing, electrical or roofing business and you are not the one drawing up the design, this particular requirement is not proposed to sit with you. The proportionate liability change and the home warranty requirements are the parts of this proposal that reach builders directly; the professional indemnity insurance requirement, as proposed, does not.
Higher penalties raise the cost of an unclear agreement
The proposed increase in LBP disciplinary penalties — fines doubling to a maximum of $20,000, suspensions doubling to a maximum of 24 months — is a separate strand from the liability change, but it points in the same direction. Higher penalties make a disciplinary complaint a more serious event for a licensed practitioner, and a complaint of that kind usually turns on what was agreed, what was disclosed, and what was actually done. Again: this is not advice about what to do differently, only an observation about why a clear record of what was discussed and confirmed tends to matter more as the stakes attached to a dispute go up.
Where our lane ends
We are not qualified to advise on how any of this affects your compliance obligations or your legal exposure, and we are not going to pretend otherwise. If you want to understand what a move to proportionate liability, mandatory home warranties, or higher LBP penalties would mean for your specific business, that conversation belongs with your licensing body or your lawyer, not with us.
What we do is more ordinary than that. We handle enquiries, quotes and follow-ups for trade businesses, and every one of those touchpoints gets written down with a time on it as a normal part of that work — not built or marketed as a legal safeguard. If a proportionate liability model and a ten-year warranty period do become law, a business that already has that trail in place is simply in a better position to show what was agreed, because the record already exists. That is the whole of the connection, and we would rather understate it than oversell it.
If you want the wider set of proposed 2026 construction changes in one place, see the overview of the proposed NZ trade rule changes. For a worked example of what a written record of a quote and its follow-up looks like in practice, see the quote follow-up case study. And for the broader mechanics of capturing and answering enquiries in the first place, see the guide to handling trade enquiries.