Certified Builders experienced a 27 percent increase in new membership growth in the last quarter of 2014 on the last quarter of 2013. While Certified Builders has experienced a steady growth in members since it was founded in 1998, it attributes the recent rapid rise to builders needing support with major legislative and regulatory change. This includes significant changes to the Building Act around consumer protection measures, including contracts, disclosures and warranties. These came into effect on 1 January and have caught many by surprise, creating uncertainty for both builders and consumers.
Certified Builders Chief Executive Grant Florence says “Overall the law changes are positive because more robust contracting will protect both consumers and tradespeople. Unfortunately though, a large number of small businesses with no trade association support are likely to find them difficult to understand and therefore comply with.”
Over a third of all builders are Certified Builders members, but about another third are not members of either of the two major trade associations meaning a lot of builders don’t have a support network and are unlikely to be prepared for law changes of this magnitude.
“This may lead to an increase in disputes, which is not in the interests of consumers or builders, or the industry as a whole. In this context, we strongly advise builders to join a major trade association to provide them with information and support, and that consumers choose builders that are members of a major trade association,” said Mr Florence.
Examples of how confusion could occur include new key definitions such as ‘Building work’, which is defined as any work done in relation to the construction or alteration of a building. This includes any work done on homes or other structures such as garages, retaining walls or fences.
“The fact is the law changes also affect concrete layers, pool installers, landscapers, conservatory installers, roofers, cladding installers and other trades when they contract direct with the homeowner – many of whom are probably even less prepared for the changes than builders,” said Mr Florence.
For those who aren’t prepared, it may not be well-known that there are non-compliance fines and if the contract is not robust, or non-existent, a default contract comes into place. This can mean contractors are responsible for applying for consents and other approvals, are not entitled to any payment until the building work is finished, are not allowed to sub-contract out all of the ‘Building work’ and, significantly, are liable for any sub-contracted work.
Certified Builders has taken steps help ensure its members are as well-prepared for the changes as possible. This has included hosting seminars around the country on the law changes prior to them taking effect and providing a variety of tools to its members to help them comply, such as up-to-date building contract templates. Another nationwide seminar series on the changes is due to run during February, March and April this year.
“As a trade association, one of our core roles is to provide ongoing education, training and support to our members to foster best practice and set a high standard of professionalism, which contributes to building consumer confidence and trust in using a Certified Builder,” said Mr Florence.