A lack of robust definitions that outline what constitutes good workmanship and defects are causing plenty of headaches for homeowners. It's time that ended.

The dumbing down process and multiplier effects hurt many people and two recent cases show us how much.

Governments legislated and produced Acts of Parliament that do not adequately define specification by not insisting on a comprehensive thorough list of workmanship clauses on each trade to be included. In turn, publishers cut back what they include, and most specifiers now purchase published specifications on the understanding that workmanship (and we all know what that is) must be of a good standard as stated in the warranties of standard building contracts.

This started the dumbing down of the general public immediately.

But now 30-plus years have elapsed since workmanship clauses began to be successively pruned from specifications through the use of terms such as ‘tradesmanlike’ as substitutes for specific details of what actually separates good workmanship from poor. And some manufacturer specifications have also followed suit – certainly paint specifications. Privatised building surveyors no longer insist on specifications containing detailed workmanship clauses because the standard building contract basically defines specification to be just a list of materials and a general description of the works.

Now a new generation of builders and architects (the bulk of the specifiers) and most building consultants whose job it is to check quality have replaced those who once knew (and are rapidly forgetting) the niceties of the specifications that make good workmanship happen.

The vast majority of today’s generation of building industry personnel have not even seen a specification that describes good quality workmanship, resulting in most of them not having a clue what it really means or what is defective.

Some builder specifications for new homes contain no detailed workmanship clauses at all, and those specifications that do actually contain workmanship clauses are devoid of clauses that inform the reader as to the stages of work and the detailing that are vital for basic good quality.

And so a considerable number of defects are built into almost every home built today; defects that are simply not discovered by building inspectors, building consultants or building supervisors, basically because they don’t know what separates good quality work from substandard work.

As such, today’s Standard Specifications, Standard Building Contracts and the Domestic Building Contracts Act 1995 are all basically in great need of a thorough overhaul.

There is also the Guide to Standards and Tolerances (GSAT), a hand-me-down from the original Victorian Government’s warranty insurer, the Housing Guarantee Fund Limited.

In some respects, this document is quite a fair document, spelling out what can and cannot be claimed. But it is nowhere near a complete list, and because of this document now being 70 pages, many building consultants seem to think that the defect items listed in it are all they need to concern themselves with.

Note that some of my clients have had decisions based on this tome reversed because I challenged its content.

At least in Victoria, where building consultants incorrectly call themselves building inspectors, confusing the public further, most building consultants have an inadequate definition of defect, using a watered down version that does not include inferior (inexpert) alternative solutions, or manufacturer requirements, or time related issues such as ‘what has been built being likely to reach a reasonable life expectancy.’

If you’re lucky, their definitions are based on the half-baked Consumer Affairs definition or the paltry list of warranties contained in Standard Building Contracts based on the Domestic Building Contracts Act 1995. Many base their definitions on the Australian Codes AS4349 – Parts 0 and 1, where there are at least six definitions of various types of defect, all of which fail to address even the paltry list of warranties in building contracts.

It’s a joke.

These simple failures to define terms thoroughly have caused a raft of further problems via the multiplier effect.

Because Australian Standards and Building Authorities are inept in defining ‘defect’ and also fail to adequately define ‘specification.’ The result is that very few people actually know what needs to be done so as to comply with the standard contract warranty conditions:

“That all work must be carried out:

  1. In a proper and workmanlike manner, and
  2. With reasonable care and skill.”

How can home owners (when questioning what appears to be substandard) find out the truth when their building consultants do not know?

The multiplier effect is again at work in a big way regarding dispute costs. Here, negating solicitors/barristers exploit the grey areas (the lack of adequate definitions) in our standards and generally stymie the paltry list of legitimate defect claims taken to VCAT by home owners and their inept experts. Those who carried out substandard work only pay a pittance on the proviso that gag orders are made part of the deal.

Add to that the protection (for the last 20 years at least) seemingly afforded to repeat offender on the building scene who contravene basic regulations and/or produce extremely poor quality work but still demand payment and/or treat their clients with disdain. That’s how you end up with the resulting annual $6 billion legal/experts costs in Victoria alone (assuming legal costs are similar on both sides of a dispute) just because home owners attempt to have their homes brought to a reasonable standard.

It’s a whole lot of fighting with hardly any rectification of the defects – a devastating situation for so many home owners and the economy.

We must correct vital definitions in basic standards to get rid of this negating.

The Residential Slabs and Footings Code AS2870 was deficient (at least up until 2012) in that it didn’t adequately spell out what constitutes potentially serious out-of-the-normal weather events, thus permitting Appendix D requirements to be by-passed over and over again by soil report writers. This caused eventual structural instability of particularly waffle-pod concrete slabs due to these slabs not being able to withstand latent (or poor drainage-caused) soil heave, resulting in thousands of houses in far west Melbourne with diabolical problems. One failure of one code (and/or by those who police it) is causing a multitude of further problems!

The owners of one such decrepit house, the Softleys, recently fought their builder Metricon Homes and their negators and won twice (as did the Hoopers).

I personally think they are heroes for their perseverance.

Their steadfast actions and resolve has put on notice the unethical practice of offenders negating with the sole aim of making their valued clients give up. Hopefully this case will make all builders of poor quality new homes offer (at the outset) realistic rectification settlements instead of mere pittances. This will mean that expensive VCAT hearings are no longer necessary.

But these builders must hand over sufficient money to actually rectify (as opposed to maintain or provide Band-Aid solutions to) the agreed defects in the homes they built, or the economy will continue to suffer greatly.

It seems these particular home owners did not accept any form of gag order, so now the general public is at long last privy to what actually happened, and now knows what harm thoughtless building can cause.

And you would hope (after these two costly precedents) that this builder now realizes that doing the right thing can be quite a bit cheaper.

The Softleys fought the good fight for what they perceived was their right to have a house that didn’t progressively fall to pieces. And their legal representatives beat the negating legal representatives, who fought because that is what nearly everyone in business seems to think is the most cost-effective thing to do, even when there is overwhelming evidence that serious detriment has occurred.

And these home owners again fought the good fight when the negating legal team tried the old common law trick of bluffing their builder’s valued client with further litigation’, instead of accepting the original VCAT finding.

Based on quite a few VCAT cases I have been involved in, the overall legal costs for each of the two cases is likely to be conservatively another $600,000 on top of something like the $290,000 awarded figures for the pull-downs/re-builds, plus removal costs, plus rent. I think $400,000 is more realistic allowing for building cost inflation.

So thanks to ‘commercial reality’ (which seems to say offending builders should negate because most home owners give up) we now have a very important new precedent for everyone to come to terms with. The wheels of change are nigh!

It seems an appropriate time to thoroughly define ‘defect,’ ‘specification’ and ‘expert’ as regards ‘alternative solutions’ and alter the acts that govern building contracts accordingly. It is also time for governments to work closely with consumer groups and the building industry (in that order), with a view to removing the need for expensive legal actions by also introducing measures that hold to account those who distort a new full definition of defect.

The (sadly lacking) checks and balances that have dumbed down the public and the residential building industry must be returned, or we may well see a continuance of a very large building industry led economic blight.