Building Amendment Act and fish hooks

Minister Nick Smith has indicated new consumer protection measure which will come into force 1st January 2015.

Traditionally building regulation change has affected the main trades, however these changes are set to go much wider encompassing most building work associated with the residential sector. Basically anyone who does building work for a client has new obligations placed upon them. Sounds pretty straight forward until we unbundle what is “building work” and who is “a client”.

Building work – is any work done in relation to the construction or alteration of a building. This includes any work done on your home or other structures such as garage, retaining walls or fences.

Thinking laterally this effects concrete layers, pool builders, landscapers, conservatory installs, roofers, brick and block, cladding installs and all the trades in between regardless if it is consented work or not. All defined as a building contractor, this could be a company or an individual.

“The client” – When one person [the building contractor] agrees with another – “the client”, to do building work. This could be one of several identities, client – builder relationship[main contractor] or client dealing directly with sub trades.

A builder or owner-builder doing a spec home and sells on is known as an “on-seller”, also has new post build [contract] obligations.

The driver behind all this is to have owners better informed as well as added consumer protection to rights to remedy of defective work. The aspect which will grab the attention of the “building contractor” are the fines for getting it wrong and the default provisions for those who work to minimums or try and fly under the radar. Couple this with the threat of the LBP Disciplinary Board and building contractors now have some motivation to be informed, knowledge will be your cheapest insurance.

Some of these requirements will become a tick box scenario such as checklists, disclosures and building contracts, the post contract info will take some work. Members who belong to Certified Builders Association will be catered for by using templates and up to the minute contracts. The Association will be adding to these minimums so clients can see members operate well above the rest.

On the face of it, it would appear to look like compliance for compliance sake. I can understand informing the homeowner to make better decisions as to who they are engaging with, I struggle with additional consumer protection given the raft of statutes currently in place for consumer rights and remedies. At the end of the day there will be differences of opinion and expectation ending in dispute, at which point we have come full circle to the problem we currently face and that is a cost effective means of resolution. And one which understands industry complexities and construction law, both of which can be fuelled by emotive, inexperienced homeowners getting involved with the build process.

Building contracts:

If your building contract [that’s any “building contractor” engaging with a “client’ over the total value of $30 000.] does not have the prescribed minimums or you wish to wing it without a building contract, the government has written default condition, of which will be implied on the building contractor under New Zealand law. There are fish hooks with this territory, such as the building contractor will be responsible to apply for consents and other approvals, the building contractors is not entitled to any payment until the later of building work is finished or CCC is achieved. The building contractor cannot sub contract out all of the “building work”, the building contractor also becomes liable for any sub contracted work.

Defect period:

This serves as an upper cut to the building industry. The client has the right to notify the “building contractor” of defects for 12 months on completion of the building work. From this point the onus is on the building contractor to establish if the defect is a result of the building contract, or contract period. Now we are talking supply chain and sub contractor support for 12 months, potentially compounded by several notices of defects within the 12 months period. To minimise the impact contractors will need cleverly written building contracts and tools to capture the works upon contract completion.

With an implementation date of 1st January 2015 the industry is under immense pressure to understand, inform and prepare contractors and have complying documents written to meet these new requirements.

To help the greater industry get to grips with the detail ITM and Certified Builders Association have teamed up to deliver a round of national ToolBox Seminars. Venues to be firmed up shortly so keep an eye on the Association website and your email inbox. I also encourage you to bring along your trade buddies so they can become informed and get on with their craft rather than working through the paper work.

Article and opinions by Jason McClintock, Operations Manager – Certified Builders Association of NZ

Click here to view more about the upcoming seminar and suggested venue/dates.

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