Red Alert

Posts Tagged ‘Building and Construction’

A hundred deaths and $3.5bl a year and finally, Williamson admits we have a problem….

Posted by on November 6th, 2012

The scale of the unsafe building practices revealed in a recent clampdown raises serious questions about why Maurice Williamson and his National-ACT Government have continued with such a nonchalant approach for so long.

The NZ Herald reported on November 2nd that since July, more than 400 actions have been taken against 760 construction sites for not complying with guidelines on safe working at height. Inspectors shut down 215 of the sites, and issued more than 160 written warnings requiring immediate remedial action.

While Building & Construction Minister Maurice Williamson finally admits there is a problem, this Government has had four years in office, and in the meantime, we’ve had an average of 100 deaths a year, with workplace injuries and fatalities reportedly costing New Zealand about $3.5 billion annually.

Translate that into the devastation caused to builders and their families, the lost productivity and the additional costs to ACC; these are not the standards we would expect of a developed nation.  Why should we accept that our construction workers are twice as likely to be killed or injured on the job, compared to workers on a site in the United Kingdom?

At the heart of the problem is this ‘hands off’ approach by a Government that imagines the market will sort somehow out its own problems.

It hasn’t worked in the mining industry, and it’s not working in the construction industry.

Labour believes we have to get back to having equal opportunities for all Kiwis; we do not accept that lowering our health and safety performance for some sectors is necessary for economic recovery.

With the Christchurch rebuild starting and the Government  now at least talking about the Auckland housing crisis, keeping workers safe must become a recognised priority for all parties involved.



New hope for the building sector

Posted by on September 13th, 2012

Seeing as the race to become the next Speaker of the House is heating up, I thought I would put in a plea for Prime Minister John Key to choose the Hon Maurice Williamson to take over from the Rt Hon Lockwood Smith.

I believe Maurice would make a good Speaker for a number of reasons. He has the skills, experience and speaks good English. These are all good attributes for the Speaker to have.

But the main reason Maurice should be selected as the next Speaker is to give the building sector a fresh start.

Ever since he passed the third reading of the Building Act 1991 he has been (on observation of many others) in the defensive position.

Stakeholders in the building sector have also said that he has run out of ideas as the Building and Construction Minister.

When looking at his Building Act Review it is sad to note that New Zealand has encountered many issues, and the National-ACT Government has not offered answers to any of them:

1: Consumer protection: In the absence of a more genuine reallocation of accountability, as argued by submitters, through mandatory insurance-backed warranties and the introduction of proportionate liability, the consumers are exposed to greater risk. The consumers are suffering and waiting!

2: Product Warranties: Legislation brought in by National has never directly addressed the accountability of manufacturers and suppliers of building materials although they had played a vital role in the leaky building saga.

3: Earthquake-prone buildings: Earthquake-prone buildings need to be strengthened to 33% under the current law. It has been encouraged to get this lifted to 67% after the Christchurch earthquakes but many building-owners cannot afford to bear the cost of strengthening works. Nor would insurers be prepared to offer cover.

It may also be worth considering setting a different strengthening level for different parts of NZ according to the earthquake-risk level that exists in individual regions.

4: Insurance Premiums: This is especially the case in Wellington where insurance premiums have risen to unsustainable levels.

It has been reported in the Listener that building replacement insurance on some heritage buildings has gone from $14,000 a year in 2009 to $52,000 in 2011. And it’s predicted to hit $132,000 this year.

The Dominion-Post also reported this week that some businesses have faced insurance premium increases of up to 200%. Department store Kircaldie and Stains premiums had risen from 78c for every $1000 worth of insurance in 2010 to $8.11 this year, even though the main 1908 building had been strengthened to 100% of the building code.

The list can go on and on.

We need a Building and Construction Minister who is going to show leadership and find solutions to the above issues.

What we got from him for so long was nothing but a tweak to the status-quo.

Worse still, if you ask questions to the Minister about these issues, the competent Minister will have a dozen sound bites ready to reel off without even thinking about the question.

So now the greatest hope for the building sector is to have a new Minister for Building and Construction.

I’m not saying that Williamson doesn’t have the required capability for the role. His hands maybe tied. He may just have had that portfolio for too long. He is probably tired, bored and reluctant to entertain new ideas or simply to challenge the status-quo or himself.

Building Matters (5): Mandatory Warranty – the UK Model

Posted by on September 3rd, 2012

Thanks to the Parliamentary Library here is an overview of the United Kingdom’s mandatory warranty scheme:

The UK’s 10-year warranty scheme called ‘Buildmark’ is administered by The National House Building Council (NHBC). The main goal of the NHBC is to raise standards in new homes.

NHBC quick stats:

• 16,000 builders and developers are on NHBC’s register

• NHBC have over 1,100 employees, including 280 building inspectors

• NHBC is an independent, non-profit distributing company

• NHBC is governed by a council with representatives from organisations interested in raising building standards in the UK.

The ‘Buildmark’10-Year Warranty:

These warranties protect around 80 per cent of all new homes built in the UK. Every new home with a NHBC warranty has to be built in accordance with NHBC standards. NHBC inspectors visit the sites at key stages during construction.

The Buildmark warranty provides protection for:

• Pre-completion insolvency cover (NHBC will reimburse the deposit or arrange for the home to be completed in line with NHBC standards)

• Cover for the first two years after completion (the builder is responsible for putting right any defects of damage caused by their failure to build to NHBC standards)

• Cover for most parts of the home in years 3-10 of ownership

Buildmark however is not a complete guarantee against all defects.

Issues and problems:

Some NHBC customers have not been happy with their experience.

The 10-year warranty should provide peace of mind to new home owners, but there have been a series of issues to highlight that this isn’t always the case.

In 2007, mould began to appear in a new home in Wigan. The NHBC inspected the house and said the mould was attributed to “lifestyle factors” through the use of the shower, cooking and drying clothes in the house (the NHBC warranty only covers condensation/mould damage if it is caused by a building defect, not lifestyle factors).

The homeowner then spent 2,500 pounds replacing belongings and cleaning the house, however the mould soon returned.

The homeowner then sought advice from other building professionals who discovered that insulation work in the house was insufficient and that a number of other defective problems with the house attributed to the mould issue.

In this case the NHBC’s diagnosis was wrong and the advice to the homeowner to reduce cooking and bathing was unacceptable.

This is just one example of many of the NHBC signing off on sub-standard homes.

Building Matters (6): Mandatory Warranty – the Australian Model, will be out later this week.

Please find a link to Building Matters (4) here.

Building Matters (No. 4): CCC is not CCC – will that concern you?

Posted by on August 17th, 2012

Under the Building Amendment Bill No. 4 brought in by Minister Maurice Williamson, consenting authorities (city councils) are no longer required to issue a Code Compliance Certificate. Instead, they are only required to issue a Consent Completion Certificate.

Does that mean consenting authorities will no longer have any direct role in checking the quality of the building work? Or Mr Williamson would only confine his concerns to the aspect of semantics?

I agree with submitters that that move will not necessarily improve consenting authorities’ “last-man-standing” position. But it will be the consumers that will be left to pick up much of the bill for any claims resulting from substandard building work.

One submitter said the intention of the proposed change is no more than “ring-fencing” the consenting territorial authorities from any liability in the event of building failure.

The irony is that this system will still see the Consumer paying fees for the part the Territorial Authorities will play in monitoring the building work, but it will not provide the Consumer with any surety as to the performance and durability of that work,” says Home Owners and Buyers Association of NZ.

This is a step too far until such time as the Licensed Building Practitioner regime matures and the qualification is actually worth something to the Consumer given that the bar has, in our opinion, been set far too low and therefore the competency, commitment and care of building practitioners cannot be assured even if they are licensed.

By no longer certifying compliance with the Code, the consenting authorities will almost certainly find their liability for non-compliance of building work is significantly reduced, as pointed out by another submitter.

Many serious defects are only discovered many years after construction, often near, say, the ten-year-cutoff. By removing this Code Compliance Certificate, many owners who discover very serious defect will be time barred from seeking damages from any party.

The situation will get worse taken in context of section 362P: “Building contractor must remedy defect notified within 1 year of completion”.

“Where is ‘completion’ defined?” – asked Structural Engineer John Scarry: “Is it when that part of work is completed or ‘practical completion’, or is it when the CCC is issued?”

Which CCC anyway?

Please click here to find my Building Matters posts 1, 2 and 3.

Building Matters (No. 3): More earthquake-prone buildings than first thought

Posted by on August 13th, 2012

A survey conducted after the Canterbury earthquakes has revealed that between 10,000-25,000 or between 8% and 13% of all New Zealand’s non-residential buildings do not meet earthquake standards, as reported by One News.

These statistics are a cause for concern. This will prove to be one of the most costly and serious issues facing New Zealand today.

Residential buildings are facing a similar problem as well.

A submission made by the Christchurch City Council to the Local Government and Environment Committee recently may help to inform us on this issue:

In relation to an appropriate strengthening level, the Royal Commission can note that the council’s earthquake-prone buildings policy sets a target for owners of earthquake-prone buildings to strengthen their buildings to 67%.

Council works at persuading owners to achieve this level. However, it has encountered significant resistance from insurers for any strengthening of earthquake damaged buildings, other than that required to lift a building above 33%.

Most building owners do not have sufficient funds themselves to pay to get the building strengthened to a higher level. In the future however, insurance might not even cover strengthening of buildings to any level.

It should be noted that it is not just Christchurch feeling the pinch but insurance premiums and the cost of strengthening upgrades are also biting in other parts of the country.

Across the country, homeowners receiving their latest insurance bills are facing on average increases of up to 30 per cent.

In Wellington it has been reported that building replacement insurance on some heritage buildings has gone from $14,000 a year in 2009 to $52,000 in 2011. And it’s predicted to hit $132,000 this year. Worse still, owners have been told to expect a 50% increase next year, taking insurance premiums to levels which are simply unaffordable.

Where is the leadership from the National-ACT Government on this issue? This is something which may haunt New Zealand for generations to come and we need Maurice Williamson to act rather than sit back and display his blasé attitude.

Would you build your castle on thin-air?

Posted by on August 9th, 2012

My opinion piece, ‘The Building Industry is at a crossroads’ has been published on Radio Live today.

They say your home is your castle, but a castle can’t be built on thin air.

But judging by the way Building Minister Maurice Williamson is handling the Building Act review it is fair to suggest that the National-ACT Government is determined to do exactly that.

The main purpose of the review is to rebalance responsibility and accountability among consenting authorities, building practitioners and consumers. But instead of enhancing protection for ratepayers and consumers, the Government is actually planning to reduce the level of protection for every party involved.

Thanks to everyone who posted their views on my two ‘Building Matters’ blogs released over the past week. These views are valuable in helping to shape our opinion.

The Local Government and Environment Committee is due to report back to the House in late August or early September when the Bill is due to be given its second reading.


Building Matters (2): Building Materials

Posted by on August 7th, 2012

Submissions made to the Local Government and Environment Committee regarding the Building Amendment Bill No. 4 summed up the issues well:

There is no accountability for manufacturers of building materials and products, said one submitter.

We remain unable to fathom why product manufacturers are not identified as part of the regime when all other parties are (councils, owners, builders and designers, said another.

 Obviously, these submissions are largely from our construction sector/building practitioners but they raise valid and important points.

 In response, Minister for Building and Construction Maurice Williamson gives off the impression that these issues do not concern him or his National-Act Government in the slightest.

Therefore the concerns regarding building materials are not addressed in either of his building Bills No. 3 and 4, although they had played an significant role in the leaky building saga.

Hence the leaky home problem should “more correctly” be called “the rotting framing problem” as Paul B put it in his comment to my blog on Building Matters (1) published on Friday August 3.

 To help understand building matters and the feelings of New Zealanders, it is important to note some of the following comments made to my blog last week:

KJT said: When are you going to stop blaming builders, who were only following the specs they were given.

Haven’t seen any of them being made to pay out, or the deluded politicians, who relaxed regulation, to allow dodgy suppliers and other thieves to prosper.

I agree with warranties, but they should also apply to materials manufacturers and those who specify them and how they are used.”

Draco.T.Bastard said: Follow the manufacturer’s instructions and you don’t meet the building code but if you follow the building code you lose the manufacturer’s warranty on the product. Can anyone say Product not fit for purpose?

 Herodotus said: Who protects the industry from the manufacturers of building materials ?

From comments above there appears a real reluctance from the Government or governmental bodies towards these manufacturers.

I will make sure to bring these views to the attention of the Local Government and Environment Select Committee, which is currently hearing submissions on the bill.

These views will be valuable to us while shaping our position as to how to get these concerns addressed.

Note: Building Matters (3): CCC is no longer CCC: will that concern you? Will be released later this week.


Building Matters (1): Mandatory Warranty?

Posted by on August 2nd, 2012

Issac Davidson at the NZ Herald reports (30 July):

New Zealand’s biggest councils are imploring the Government to introduce warranties in new building laws or risk “Leaky Buildings 2″.

The councils have made sensible calls. The Government has to introduce meaningful protections for consumers and consenting authorities/ratepayers or we could have another repeat of the leaky building saga on our hands.

Christchurch and Wellington city councils have urged the Government to introduce a warranty scheme to protect consumers and local authorities from liability when builders do not produce good work.

Unbelievably, Minister Maurice Williamson in the second of his two building amendment bills (No.4) is actually planning to reduce the level of protection for consumers and ratepayers!

In the absence of a more genuine reallocation of accountability, for example, through mandatory home warranties and the introduction of proportionate liability, consumers and ratepayers are further exposed.

But worse still, the home-owners will have fewer remedies (if any) when left in the lurch by a $1 shell company.

In the UK, a 10-year warranty protects around 80% of all new homes built in the UK. Every new home built with this warranty has to built in accordance with NHBC (National House-Builders Council) standards. The warranty covers the workmanship, insolvency of the builder and covers any faults, damages or defects discovered within two years of completion.

In Australia, Tasmania is the only state with a voluntary builders warranty scheme. All other state schemes are mandatory.

How do we improve our legislative protection?

As the Building and Construction Spokesperson I am interested in feedback and turn it over to the readers for thoughts on whether we should introduce a mandatory warranty scheme such as that of the UK and Australia.

Note: Building Matters (2) will focus on accountability of manufacturers of building materials.