The Bizarre Building Rule Book: The ‘Protected’ and ‘Protected Not’ 13

Tuesday, October 4th, 2016
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It’s almost impossible for any consumer to figure out Australia’s blueprint for ‘building control,’ but after years of commitment and dogged detective work, the ‘rules’ can now be revealed.

The regulations – the ‘Bizarre Building Rule Book’ if you will – was fabricated to feign consumer protection whilst ironically ensuring building industry interests t are ‘the protected’ and consumers are ‘the protected not’!

At first glance, there is an appearance of a building bontrol system, with many apparent laws and regulations. But as confirmed from extensive research and reinforced through the bitter experience of many thousands of consumers, behind the public façade of rules, the normal conventions have been circumvented. Instead of ‘controls’ commanding compliance from the building class, under the Bizarre Building Rule Book, the consumer class has been consigned to be controlled.

The façade of building control

The dilettantes might point to the fact that there are various Building Acts, building regulations, the Building Code of Australia and Australian Standards, and of course our Australian Consumer Law. Yes, we have an incredible number of ‘laws’. Many, however, are flawed and all are unbalanced. Where they do exist to benefit consumers, they are not enforced. In effect, beneath the façade, one discovers that building and consumer laws have been constructed to afford colossal commercial advantage to building and its associated offshoot industries, and conflictingly conferred massive disadvantage and detriment upon consumers.

The legislation, legal framework and governance structure pertaining to ‘building’ have all evolved over decades to be complex and convoluted. The scheme was contrived to be intelligible for building business interests, and simultaneously to be incomprehensible and confusing for the average consumer.

The key to this enigma is in understanding that building’s ‘Rule of Law’ was fashioned to be inequitable and under this exceptional version of the Rule of Law, the illegitimate has been deemed lawful, with the benefits for the elites and the injurious outcomes for consumers artfully obscured. As now verified, the reality for building consumers is the antithesis of the government’s proclaimed policy.

The Rule of Law

Founded on democratic ideology, there are universally accepted standards of the Rule of Law. The underlying principles include laws being enacted, administered and enforced fairly; protecting fundamental rights; delivering an independent and ethical justice system; and accountability for the government and its officials. Laws exist to encourage compliant conduct beneficial to the majority in society, thus dictating regulation of unwanted or harmful behaviour through enforcement.

In stark contradiction to the principles of the Rule of Law, in the building industry the rule of the vested interests has been ratified by government. The policy propping up the legal framework and the atrocious corporate governance practices form the bedrock of the government’s refusal to control the contemptuous cowboys by applying appropriate sanctions to discourage unscrupulous and unconscionable conduct. Similarly, this explains the lack of will to curb the market excesses, to create any possibility of ‘fair trading’ or to safeguard consumers.

Paradoxically, the Rule of Law has been turned on its head!

The Rule of Unruliness

As a test of fairness, we can reflect on how the laws have been enacted and administered. Since consumers are the number one stakeholder group and responsible for funding the trillion dollar building industry, one would imagine that they would have some influence and input.

On the contrary, consumers have been denied the opportunity to contribute to formulating policy, and equally denied access to any consultation on new legislation. In addition, despite their magnanimous efforts to contribute to the administrative process through consumer representation on the boards and committees, they have been debarred, deprived of oxygen and suffocated into silence.

Consequently, the ‘laws’ enacted are unfair, and overtly biased in favour of business. Under building contract law and advised by the ‘consumer protection’ officials, owners are forced to make stage payments to the builder regardless of major building defects, regardless of certifiers’ approval of works they know to be structurally unsound, and regardless of the builder not being entitled to any money.

As these cases confirm, under the ‘laws’ such builders are enabled to ignore their contractual obligations and the surveyors can shirk their responsibilities without any penalty or fear of punishment. The building interests are ‘legally’ accommodated through a combination of prejudicial ‘laws’ and the obliging officials’ commitment to zero enforcement.

As happens in hundreds of thousands of cases each year, cowboy builders coerce owners into ‘legally’ handing over advance payments for buildings before running away and leaving the owners to face the consequences. Commonly, these ‘builders’ fleece owners of their money due under the contract and then vanish. The lopsided legislation supports such recalcitrant builder misconduct, as one typical case will illustrate.

An unethical builder ran away with around $1.2 million, leaving the building incomplete, totally defective and not rectifiable. Then one day, the large windows fell to the ground and the roof blew off. Large sheets of iron went flying across the street, posing a dangerous risk to passers-by. The council served a building order on the owners who had to immediately pay for the roofing and windows to be secured or face a hefty fine.

It was obviously the builder’s fault, but the innocent owners were penalized. They did not create the defects, had already paid for the super defective work causing this damage, and then under the ‘law’ they were made responsible for the incompetent builder’s failures. The ‘Rule of Law’: those with no say are compelled to pay!

Rules of Engagement

Before making a decision to spend a huge amount of money, consumers usually do their homework. But in building, no matter the dedication to know the ‘Rules of Engagement’ and minimize the risks, it is an unqualified impossibility.

No amount of digging will unearth the illimitable cowboys or their past histories. No amount of determination will disclose the meaningless ‘registration’ regime, the ‘no touch’ regulatory culture or the widespread sub-standard building practices. No efforts will change consumers’ ignorance status or reveal that engaging in building will bind them as ‘controlled’ with a high probability of detriment, the intended casualties of ‘collateral damage.’

How have the rules been constructed? A few examples to illustrate the disparity between business and consumers:

  1. Information asymmetry severely disadvantages consumers. The business/bureaucracy partnership will not provide truthful and accurate information, preventing precautionary defence. The ‘rules’ prohibit consumers protecting themselves!
  2. Consumers are commonly forced into ignorance. Despite repeated requests to building companies to obtain information on the DDI insurance, information is refused and often not received prior to owners paying their deposit – the requirement by ‘law’ is ignored!
  3. Builders should allow owners access to the site, but regularly they use their superior position to illegally lock owners out, claiming that they have ‘control’. Hence owners do not find out that their ‘dream home’ building has major defects or requires demolition (cannot claim insurance) until too late when they have paid all the money!
  4. Most new building contracts are unfair because under the Australian Consumer Law a contract over $300,000 (most new contracts) is exempt from unfair contract terms’ conditions. Building’s vested interests managed to make ‘legal’ what is otherwise ‘illegal’!
  5. Oddly, an occupancy permit “is not evidence that the building or part of the building to which it applies complies with the Building Act or Building Regulations.” At the very end of the building project, owners learn their life savings have purchased a dwelling that does not meet minimum building/safety standards – a dwelling that was approved ‘legally’!
  6. When owners discover that they have been robbed, left with a disastrous building, they then learn that there are no ‘warranties’ as stated in their contract, the builder runs away, negates the defects and the ‘rules’ officially empower him to do so!
  7. Once owners realize their building plight has been deemed ‘in dispute’, their only path is a biased, imbalanced, adversarial system. Here the ‘Rules of Evidence’ are not applicable and the odds are stacked against them. The usual outcome is more financial loss and years of pain and suffering, the unknowing owner caught in a stitched up system and little chance of justice!

When the damage is done and building consumers learn that they have been delivered a lemon, there are no ‘Lemon Laws’ to protect them. In building, this aberration is entirely ‘legal’. The imbalance in power has resulted in an empowered business class and a powerless consumer class, the ‘ruled in’ and the ‘ruled out’!

The philosophy that the building business must be about profits is wrong. It should be primarily about people and providing them with quality buildings. Thus, although we have now cracked the code and deciphered the disadvantage of the Bizarre Building Rule Book, the quintessence of irrationality continues.

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  1. Judy-Ann

    Having interviewed Anne Paten several times in the past few years as a Broadcast Journalist for my 'Current Affair' Anne's latest article is a testimony to her comittment to finding and getting the truth out.

    I have checked and interviewed some of her sources all of whom have been impeccable. The State Government needs to act swiftly to recompence ' hoodwinked' home owners with a right to some redress by way of of a properly constituted compensation plan; a State Run Insurance plan which fairly gives the home owners some redress not just if the builder dies or cannot be found.

    No way should some of the alleged 'bully boy' building conglomerates or shonky builders get away with such criminal cowardice or intent.
    Keep up the good work Anne. We need more dedicated people like you to stand and stop the 'matey' culture, to amend the building act (whatever it's official title) legislated recently. Amendment are crucial to bring these cowards to heel.

    There must be someone in State or Federal Government who will champion homeowners legitimate greviences and properly protect them with adequate safeguards. Judy-Ann Steed

  2. Diarmuid Hannigan

    In the years prior to lawyer colonization, Australian Industry took pride in producing quality. We used to hear terms such as world`s best practice, we would work hard to achieve the best. This ethos bought our nation together and was driven by the introduction of The Trade Practices Act of 1974 which enshrined Australian Consumers with consumer rights and provided them with a regulator that had teeth. Industry listened, customer satisfaction improved and the quality and efficiency of Australian manufacturing became part of worlds best practice. During the last decade of the last century un-be-known to the general population a plan was struck to colonize our nation with lawyer run legislation (Lawyer Colonization). Any one who ran a business during the 1980 and 90`s became aware of the changes to our employment laws which dragged many of us into the time wasting arena of the industrial relations commission, a lawyer run castle. Fortunately it was an inexpensive arena that was partially functional unlike the current arena, the courts. The Victorian Civil and Administrative Appeals Tribunal (VCAT) an enclave that was initially set up under the pretext that it was a non lawyer run theater has now been invaded by the brethren and has become an arena where the consumers of poor quality building are subjected to a bias hearing at their expense. Home building is now the biggest industry within Australia as our manufacturing industries have been decimated, the lawyers colonization have extracted the teeth from the regulators while simultaneously destroying the ethos of world`s best practice through the provision of quality because within their own profession they would not know what a quality standard is.

    • Branko Mladichek

      Great observation Diarmuid, I have another perspective on this.
      History has it that one of the agents at MI5 observed, long before Kim Philby was unmasked as a traitor, that either he was grossly incompetent or was working for the Russians. Now we know.
      In the context of building regulation we presumably had best heads in the country come together then produce an outcome with combined intelligence of a bed bug. How else can you explain that we are first world country we have third world building regulation and enforcement. We are essentially building our homes without quality control.
      So those responsible for the building control regulation and enforcement are they working for the benefit of our society or are they traitors for their own pockets? From where I stand the answer is clear.

  3. R.Jones.

    As fright full as A. Patens letter is it is nowhere near as hard to understand that consumer affairs can say the builder has done nothing wrong even after the builder has lied to there faces and they knew he was lying to them and they still stood up for the builder. The builder then ignored there report and did nothing. The Consumer affairs person was A. Bradley and Vict Building Commission. was R. Karkut. ( a copy will be sent to CAV. ) The CAV. department comes under the Justice Dept. which explains it all. R. Jones.

  4. Sharon Harrison

    Anne's article highlights many of the problems domestic building consumers face: a building control system that looks good on paper; but the responsible authorities have consistently failed to enforce the protections for consumers. A practitioner registration system that allows so many wolves in sheep's clothing to operate with impunity.

  5. Branko Mladichek

    Great article Anne, as someone who has been at the coal face of building problems and disputes I fully endorse what you say.
    If you are homeowner waiting for non-existing building control to protect you will grow old penniless, shattered and will die still waiting. Is there an alternative? Yes! Get a very good building consultant to back you up before you sign building contract and even the playing field. Then you will have a fighting chance, but be careful, search well and deep to find one for there too are many pretenders.
    In the meantime we all have to get together to fight this government monstrosity that pretends to protect the consumer but actually defrauds it.
    Some years ago I got communication that Consumer Affair Victoria will enforce infringements against DBCA1995 but that did not happen. Builders serially infringe with impunity.

    • Mary Farrugia

      For a person living this nightmare riight now I still can't fathem how we got to this point. Our dream home has turned into a nightmare and there appears no way to wake up from this bad dream. How could our laws allow these dodgy Builders to continue to destroy peoples lives on a regular basis and do nothing to stop them. We put out trust in the system but unfortunately there appears to be no system that considers the consumer. Builders can build whatever they want and have no respect for any building codes or regulations and simply get away with it. I can only hope that one day I will emerge from this nightmare and be left with at least a roof over my head of some sort.

  6. Steve

    Pandora's Box. The Victoria Govt. won't touch it as consumers are just collateral damage. I have papers of the BPB minutes obtained under FOI that states protect the builder at all costs. Carolyn Lloyd should be in jail!! Prue Digby, again fiddled the figures under the instruction of Planning Minister Matthew Guy, rather than execute the full audit as instructed by Vic Ombudsman. Wynne is just skimming off the top waiting to retire, VCAT is just window dressing.

    So where does a failed building consumer turn? I'd recommend hiring a Bikie Gang and terminate the builder, no one else will help, then claim on the insurance. You won't get any money back from the insurance as it's owned by Vic Govt. But you will get the satisfaction you've taken a criminal off the streets.

  7. Mel

    Great article! At the moment all I see is an industry designed to feed the fat cat lawyers and bureaucrat pen pushers under the guise of a genuinely controlled and regulated industry. And who is feeding them? Us, the consumers.

    • David Kuhnert

      Mel You are spot on . The building construction industry has been hi jacked by the self-serving bureaucrats & the legal vultures . Until this changes , God help us all . Regards A 69 yr young Builder

  8. Andrew

    Anne is spot on. I have had first-hand experience of personal damage, great financial loss, and my whole world wrecked I am now in a position to make informed comment. This experience has been the most debilitating, soul-destroying and life-threatening ever imaginable. And I might add, the most terrifying. It has lasted for years and I could have lost all my life savings, my marriage, health and any possibility of a future. Not to mention I could have lost my life.
    The world of building is one where all owners are locked out, where they cannot find honest information and when the building project goes pear-shaped as per the Rules, it entirely does your head in! Way beyond being weird, more like you are in a parallel universe and beyond ‘bizarre’. Intentionally uniformed, owners cannot get hold of the facts, learn about the ‘system’s malfunctioning’ Rules and all are completely obstructed. There is no way to prevent damage or the inevitable devastation. What is most shameful is that our Governments have approved this Rule Book and knowing the consequences. We must keep shining a light on the truth and warn others of the wretched rules that have caused this catastrophe. We must push hard for consumers to have a voice and reform this wicked system. So many lives depend on it.
    Keep up the good work Anne.

  9. Jenna Corbett

    Another great article Anne! My own experience, and all the massive financial and personal losses incurred both directly and consequently of a bad build, definitely confirms how not only incompetent, but utterly deliberately biased towards the building, and lawyer engineered dispute industries, our rotten home building, and "Governance" and "legal" systems are. Actually, with the now mass exodus of what quality builders there are left from the building industry as a result of all the mess , interesting to see how much longer the corrupt, self-serving, overpaid Victorian, and all State and Federal Government politicians can afford to go without either finally this lifting the lid on this diabiolical now "legally" entrenched situation they've backed, and fix it and provide appropriate recompense; or themselves, and/or family members begin to suffer personal effects from it ?

  10. Mark Whitby

    Well done Anne… and Sourceable for presenting (and allowing to be presented) this gross unfairness in the residential building industry lyrically penned in a nutshell… to give the consumers a say.

    And from the responses to your article… wow… there must be droves of deeply affected new home owners and apartment owners out there hurting so badly… and many more than the Victorian government and media will reveal. Time for a Royal Commission it seems.