The following article was published on LinkedIn by NSW Building Commissioner David Chandler OAM.
Authenticity is about doing the same thing well over and over again. Predictability points to either risky or trustworthy behaviour. Riskiness can be because of immaturity or intentional. There are many pointers to riskiness. The use of a Multi-Party Risk Rating Tool in NSW from the 1st September 2020 combined with the introduction of the Residential Apartment Buildings – Compliance and Enforcement Powers Act (RAB Act) will be targeted at the most risky player combinations of Developer, Builder and Certifier delivering Class 2 Buildings in NSW. The first risk ratings service is currently out to tender. See link here.
Over the last few months the Office of NSW Building Commissioner (OBC) has been conducting informal field audits ahead of the RAB Act commencement date. These audits will inform an ongoing series of Case Studies that report on the findings of the Occupation Certificate Audits and building inspections that will be enabled by the Act. Up until that date no particular party will be called out, just the findings. That changes on the 1st September 2020. The purpose of the audits is to identify non-compliant building works, to work constructively with non-compliant players to lift their game, to provide expert evidence to inform correction directions and to inform the Construct NSW building confidence strategy.
Some of the projects visited so far have recorded claims by their delivery teams that they aspire to do the right thing and progressively to develop their brand to reflect those of the more established developers. Developers like Mirvac and Meriton are often cited as the sorts of brands that the these developing players aspire to be like. I agree, and there are many others who could also be called out as benchmark players. The OBC hopes to work with industry to develop a list of those players using available risk rating tools to call out the most trustworthy. We will also commence a research project in the next few months to establish what the typical costs of building defects are across the most trustworthy and risky spectrum. One developer already uses such information to inform executive KPI’s about the company’s average cost of attending to building defects across their entire build platform.
There are some early take-aways from the informal inspections so far
Established developers who have often been in business for over 7 to 10-years deploy embedded standards for design and construction detailing that they have proven and refined over many years. They take great pride in ensuring that their customers attest to the quality of their buildings, which is evidenced by the repeat nature of their purchasers and those that they recommend. Their customers undertake their dwelling ownership or investment journey with these firms as they start-out, trade-up and eventually trade-down as their housing needs change. Often these customers return with families and friends to introduce them to these trustworthy developers to ensure they start their home ownership or investment journey with confidence. These established developers deploy a range of investment entities and engage their in-house design and construction teams with good governance and enterprise backing.
Trustworthy developers do not believe doing it right, is a business or construction cost. They avoid cutting corners and substituting materials with those that are non-compliant or not installed properly. As the NSW construction industry reforms (D&BP Act) are introduced over the next few years they do not expect their cost of construction to increase as a result. They expect that the playing field will level and those who may have gotten away with poor quality construction in the past will be brought to account. They have no tolerance of the brand damage that the more risky players taint the whole market with.
We have observed the less established developers who may have only entered the market in the last 5 to 7-years. They exhibit less mature business practices and inconsistent results. Many are well intended, others less so. They have fewer developed standards for design and construction. They have yet to engage the long term talent that learn the ways of the established players. They are more inclined to leave detailing and performance in the hands of consultants, contractors, installers and suppliers who operate at the margins of compliance and price. The more risky players tend to put speed of construction ahead of all else. They often pressure their supply chain to perform work to standards that are not good enough. The less established developers deploy a range of investment entities and engage their in-house and external design and construction teams with weaker governance and enterprise backing.
The more risky players fain shock when things go wrong and blame everyone else
The OBC is serious about calling out risky player performances from September. The use of case studies will be deployed using experienced professionals. We have observed a range of defences when the informal inspections we are now conducting turn up compromised work. Our priority focus will be on the key elements defined in the D&BP Act. These include the structure, waterproofing, fire rating systems, building services and external enclosures. Some defences include that we ‘engage designers and installers to value engineer their designs and work – this enables innovation and alternative solutions’ they claim. When the shortcomings of this work is demonstrated we have seen the full switch of the Design and Construct process transform into a Construct and Design attempt at escape.
The RAB Act will enable audits of construction work before buildings achieve an Occupation Certificate (OCs) and purchasers are forced to settle. The Act will enable work to be stopped and opened up. It will enable the calling in of all relevant documents to test how the building has been made. OC’s may take a little longer for those who cannot demonstrate compliance. We are serious. And here is a warning to manufacturers and installers. Your brand could also be damaged by submitting to pressure to support non-compliant work and certifications. Its a long way from factory to installation. Pay attention.
Trustworthy developers set the tone for the way their buildings are built from the foundations up – there is consistency from bottom to top
On almost every project we have inspected with claimed defects the basement levels provide the early indicators of compromised construction. It becomes difficult to buy claims of good design, engineering supervision and competent on-site management when projects show their underlying DNA in the basement. Things do not get a lot better on the way up.
Readers should not think any of this is news to me. This conversation is about putting the more risky players on notice that the game is about to change in NSW. Customers should expect a better deal and be more confident in buying their most important investment. The message for now, is to deal with trustworthy developers, builders and certifiers. They are not hard to find. They can back their social media and marketing up with good buildings. Others not so. One only has to make enquiry about a developer’s recent projects to check this out.
Over the next few months we will be meeting with key materials suppliers, manufacturers and wholesalers to put them on notice. The brand of their products is at risk if they think their responsibilities stop at the factory with a compliance certificate. We will be looking to see that on-site installations are using compliant and properly labeled materials. We will be looking to see that installations reflect Australian Standards, manufacturer product and assembly guidelines. We will be checking that relevant compliance certificates reflect the actual installations. Out of date and irrelevant technical standards and test certificates will be called out. The work will be re-done where it is discovered. We already have some pretty unsatisfactory exhibits. Its time to put brand value back as a centrepiece of construction.
Non-compliant construction work or material defects should be reported
In almost every instance the OBC has been called out to observe defects by apartment owners, no prior reference has been made to NSW Fair Trading. Often strata owners have commenced expensive and complex legal action before the support available through Fair Trading has been involved. Any matter that may require subsequent OBC attention can only follow the expert processes that the NSW Fair Trading team can deliver. When faulty work is proven, proper rectification notices will need to have been given. The new OBC powers given under the RAB Act will not be as effective without following proper processes.
Last week we met with owners of a development over 3-years old where repeated attempts to have defective work rectified have been to no avail. They propose to notify Fair Trading in the coming week. We will be tracking these referrals and giving increased attention to the most risky developers, designers, builders, suppliers and certifiers. The more trustworthy players have a track record of positive responses and mediation when a Fair Trading process is followed. This can save all the parties a lot of stress and cost. Goodwill can prevail.
References to the Office of the Building Commissioner can be made via the link below. Submissions to me via Linkedin are informal and may not receive a response.
This article was originally published on LinkedIn. Read the original article here.