Tuesday, 13 March 2007

Time for building authorities to start wriggling

What are your chances of suing the state when the state gets it wrong?

What chance of suing one of the state's regulatory authorities when they get it wrong, and you end up paying for it? How about suing two state authorities, one regulatory and one advisory, who between them mandated, prescribed and certified construction techniques and materials upon which builders, designers, developers and home-buyers relied in good faith -- many of which turned out not to be worth the accreditation certificates upon which they were promoted.

Since the very first signs of a screw-up, the two authorities I describe -- the Government's building industry authority and the country's leading building research organisation -- have adopted a "Who, us?" approach to the houses crumbling around them, houses that for the most part were built by builders who were simply following what was required of them by the Government's building industry authority and by the country's leading building research organisation.

They've been dodging ever since. Until now. The Herald reports that an adjudication has just found against the two in a case involving a $4.6 million Ellerslie development (left), opening them up to a potential billion-dollar liability if that decision is supported in the High Court.

A while back I posted a wee fairy tale about a leaky home or two after a major court decision that did threw out acase against these two. It might be worth reading it again just to see what the stakes are:

Let me tell you a brief fairy tale.

Once upon a time, several years ago, in a land awfully much like this one, a government department called the BIA, and an eager young researcher cousin BRANZ, were set up to mandate and oversee standards and practices in buildings, to authorise and dictate building systems, and to stamp the government's authority on an errant building industry -- in essence to say what the King would and would not allow in building, and to give what they had allowed the Royal seal of approval.

Many people rejoiced that this would save them the brain-ache of being allowed to decide for themselves what was safe and sound. 'Stuff with our seal of approval is safe and sound,' said the nice bureaucrats. 'Excellent!' said the people. Meanwhile, those who did wish to decide for themselves were told not to. 'Don't worry,' the BIA and BRANZ told everyone, 'as long as you all do what you're told and as you're told and when you're told, we'll make sure nothing untoward happens to you.'

And for a while, everything was good in the BIA, and many careers in government were confirmed, and many building suppliers got rich by getting their building systems and their materials approved by the BIA; and many important meetings were attended, many bureaucratic salaries paid, and many BIA determinations and approvals issued.

And the little people of this fair land did all that they were allowed to do and all that they were told to do, and many houses on many hills were erected in the fashion that BIA determinations and approvals said they were allowed to be and told to be - and everyone knew they were safe and sound and could stop thinking for themselves, because as everyone knows the job of the King is to keep everyone safe and sound, and wasn't he and his men doing their job so well! 'Approved by the BIA.' 'Tested by BRANZ.' These were Royal seals of approval and official stamps of safety and soundness that could be relied up on to keep everyone warm and dry.

And lo, the people rejoiced in ther homes, and the bureaucrats rejoiced in their big, shiny offices that the people were made to pay for. And the King decided that all was good, and he went off to climb a mountain.

Until one day, the rains came. And it turned out the job had not been done so well; that some of what BRANZ
had approved and the BIA had determined had to happen shouldn't have happened at all. And then it also turned out that the people at BRANZ and the BIA were not all-seeing and all-knowing, and that their job had really been one of 'all care and no responsibility.' 'Whoops,' said BRANZ. 'Whoops,' said the BIA; and they they pointed fingers, changed their name, withdrew their approvals, and promptly vanished in a puff of bureaucracy.

And the good people of that merry, green land looked to each other and wondered why they had ever taken the government and their minions seriously. They wondered why they had worried more about 'fly-by-night' builders, when it was clearly 'fly-by-night' government departments that were the witches and warlocks.

And meanwhile, good builders and good designers and home-owners who had relied upon the determinations and approvals of BRANZ and the BIA as being safe, found that the policy of 'all care and no responsibility' only applied to government, and to government departments, (and of course to big suppliers with good political connections and big legal departments).

And the good people began fighting amongst each other. And many good people were ruined. And many other good people went to Queensland and retired. And the cost of building doubled in that green and merry land.

And everyone wondered why they had let it happen.
(Meanwhile, some others wondered whether the government should set up a Car Approval Authority, to take responsibility for approving second-hand cars before they're sold... 'Well, it works for houses,' said one wag.)

LINK: Top bodies found liable for leaky homes - NZ Herald

RELATED: Building, Housing, NZ Politics, Bureaucracy


  1. I know you have your tongue planted in your cheek to some extent here PC, but are you actually suggesting that the Leaky Building Syndrome (TM) is ultimately the fault of BIA/BRANZ in your esteem?

    The tacit suggestion is that the evil forces of beaurocracy imposed ultimately flawed building methods on architects/builders, and encouraged them (by way of BRANZ certification) to use unsuitable materials.

    It is a tad disingenuous to suggest to a lay audience that at some point prior to the LBS 'calamity' the mailed fist of the State descended upon the building industry and said 'you can only build this way'. Things have certainly tightened up POST-LBS (viz new E2, etc) but at the end of the day, the truth is certain people will always attempt to build housing cheaper, cut any corners they can get away with, and do it faster in order to maximise profit when flicking said property off at a later date.

    At no time did BIA/BRANZ change the laws of physics (to the best of my knowledge). It is my belief that the architect is ultimately responsible for the weatherproofing of the building in design, solidly backed up by frequent and rigorous site supervision, with TA inspection as a final backstop.

    It is obviously way cheaper for a developer to commission a cookie-cutter multi-unit proposal from a draughting office, get an accountant to project manage the job by ringing subtrades separately, and sourcing materials separately according to market price at the time. It's just way, way more risky. And you'll find very few leaky buildings eventuating from the former method, and a large amount from the latter.

    Bottom line is that I just don't by the 'Well, they said we could' defence, or conversely 'They didn't say we couldn't, so it's their fault'.


  2. Tongue in cheek? Moi?

    I do sometimes try to soften the blow with humour, but there's usually a serious point, as there is here.

    Don't you think its odd that those responsible for the materials and methods that failed so spectacularly have so far escaped retribution, while those who specified, installed and inspected them have so far been required to pick up the tab instead (a tab, incidentally, that has been made far worse by subsequent knee-jerk regulation)?

    Den, your suggestion that the problems only occurred at the bottom end of the market, at the cookie-cutter end, are belied by the number of 'higher-end developments also caught up.

    The problems occurred in projects designed by both draughtsmen and registered architects, and built both by 'ducking and diving' subbies and by registered master builders.

    Problems occurred across the range of jobs, so your suggestion that it was brought about by "cutting corners" just doesn't fit the evidence, nor does your intimation that if only everyone had used registered architects they would all have been fine.

    It just ain't so. I've visited jobs built by both that exhibit the same problems found elsewhere.

    What all the problem projects had in common is this:
    ** all buyers relied in the main on council consents as a reliable indicator of fitness -- not something one would do when buying a car,for example.
    ** most in the industry relied upon standards and codes provided by SANZ and BIA, and on materials and methods certified by BRANZ. (Dryframe for one example; harditex window details for another)

    That state involvement gave almost everyone a false sense of omniscience about the security of the methods and materials certified, and about the competence of the inspections.

    Councils have been held liable for the inspections, but those responsible for issuing accreditation certificates for materials or methods that were relied upon by competent professionals but were subsequently found to be in adequate, have so far escaped opprobrium. So too have the manufacturers who issued those details that were relied upon, and the materials that failed.

    Most of those builders, designers and developers were not corner-cutting; they were competent professionals who relied upon details that were issued by manufacturers who haven't stood behind them; on accredited methods and materials that the accreditation agency has now washed its hands of; on materials that the standards authority now wishes it hadn't allowed (but did) ... and in the end the ones who are paying are not those suppliers, agencies or authorities, but those builders and designers, and the council inspectors who for the most part did as much as they were able to at the time.

  3. Denmt said "but at the end of the day, the truth is certain people will always attempt to build housing cheaper, cut any corners they can get away with, and do it faster in order to maximise profit"

    Yes builders have and always did build like this.

    The only change was in the building act which was controlled by BIA.

    On a funnier note.
    Was playing golf in a trades day. One hole was sponsored by James Hardie. Good looking girl looking after the display at the hole introduces herself and asks "do we know anything about James Hardie and Villa board" they were demonstrating. Builder who I was with responds with "Yeah I know about James Hardie. Your the company that sold Asbestos Fibre Cement board killing people, but walked away from responsibility. Your the company that sold exterior cladding for homes that leaks, but walked away from. Yeah I know about your company" The girl didn't have much more to say after that

  4. I didn't mean for my comment to come off as a subtle ad for registered architects - I was using 'architect' as a catch-all for 'diligent designer'. As you well know, there are plenty of non-architects who fall into this category.

    My direct knowledge of leaky-building jobs thus far is largely restricted to low-end cases such as I mentioned, and I have yet to hear of a job whereby diligent design was done, sound building practice used, and TA inspections carried out without a hitch. In that scenario one could well surmise that something was awry with the materials, or the building practice.

    But the truth is that the one constant across so many 'Leaky Buildings'(TM) has been EIFS systems and the number of offices who now iwll not touch them is staggering. One can say that BRANZ in particular may have been too swift to certify some of them, and BIA guidelines as to their use may have allowed too many loopholes for quick-and-dirty approaches to construction, but the reality is that the system is easy to detail wrong and build wrong. And this is what happened in a number of the jobs I have knowledge of.

    As for your point that:

    ** all buyers relied in the main on council consents as a reliable indicator of fitness -- not something one would do when buying a car, for example.

    ...I fail to see how ordinary folks can be expected to have the requisite knowledge to assess detail sheets for possible problem areas. And the suggestion that they should pay third-party private organisations for plan-checks just for peace of mind takes the onus off designers to properly do their job. And ADMINISTER THE CONTRACT. Architects/designers who don't carry out site supervision are asking for their work to be undone. It needs to be carefully explained to clients that this isn't just another way of extracting dosh out of them.

    As a final note, I would have thought that with your advocacy of the use of common-law principles, that passing the buck all the way down the line to BIA/BRANZ would feel mighty sketchy... And saying 'well, they wouldn't exist in a libertarian paradigm' doesn't really cut it!



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