Victorian Building Action Group

Victorian Building Action Group

3 days ago

BUILDING DEFECTS ARE A SIGNIFICANT CONTRIBUTOR TO WASTAGE, ECONOMIC BLIGHT AND CLIMATE CHANGE.

PART C:

Whether or not you agree with climate change…

HAVING TO RECTIFY DEFECTS RESULTS IN ENORMOUS WASTAGE THAT COULD BE COMPLETELY AVOIDED.

Freeing up building regulations and privatizing building surveyors and certifier building inspectors PLUS the hidden agendas contained in some building codes and virtually all building legislation, has resulted in a ginormous increase in defects being built into new homes Australia-wide (with something like half of the defects in those homes never being discovered).

Each year for about 23 years now (based on an audit of over 400 homes), we have been pumping out undiscovered defects in our new homes, units, additions at an average $6 Billion worth per year… which is 23 x 6 = $138 Billion worth of defects mostly still out there (see proof in earlier reports on these frightening figures). We are currently running at over $8 Billion per year.

And proving that defects are worse than 100% waste is so simple, that we cannot understand why building associations and governments will not make defect-free building construction happen by improving just the one area of the building process… SUPERVISION.

If defects can be avoided by adequate experienced supervision, then there will be hardly any more disputes… which everyone wants (apart from the negators).

But adequate supervision for new homes and new units and new additions to homes generally hasn’t happened now for 23 years since the advent of privatizing part of the regulatory framework, and what appeared to go hand-in-hand… the rapid growth of large building companies driven by greed… where even the main task of builders… the supervision… was short-cut; just as was the time taken by most trades on the time-consuming portions of their labour commensurate with their reduced wages… where neatness and getting the job done on time are considered more important than pride in work and reporting deficiencies in the work of previous trades (keeping an eye out for the builder and ensuring quality work so to speak).

Larger building companies who build new homes and small unit developments are not employing experts to supervise their work, and we have it on good authority that the builder (unlimited) bosses (required for the companies to actually exist), are not even getting to the building sites during construction at all. (On four (5) VCAT cases where the home owners took the builders (unlimited) bosses to VCAT, all bosses admitted that they had been too busy to visit the sites… and all four (5) houses had major structural faults that needed to be rectified… and all four builders first bluffed and lied, then fought the cases giving ground in stages in VCAT, rather than agreeing at the start to rectify basically what they had completely stuffed up.

We think that their legal advisors had told them that VCAT often awards less than is claimed because of precedents, and that if they bluff hard enough, most home owners give up.

What they didn’t tell their builder clients was that the claims had quite some merit at an average $120 000 being claimed… and that if the home owners persevered, then costs may very well be awarded against the builders… and that these costs would greatly outweigh the amount of the claim by a factor of two.

One case over a claim of $211 000 was crunched down to about $144 000 (after 2 Supreme Court cases were also fought and won by the owners)… and the costs were awarded against the builder… at close to $590 000 all up.

But we digress…

So back to the wastage problem associated with so many defects being built into almost every new home, unit and house additions.

DEFECTS IN NEW HOMES & UNITS = 150% WASTE (2 X LABOUR).

When there is $100 000 worth of defects in a new home, then in order to rectify them, the faulty work generally must be removed first and the remaining structure temporarily propped… followed by the installation of protective tarpaulins and scaffolding to suit.

The home owners might need to move out for weeks at a time, and then reinstatement works will be able to commence. The extra bin hire and cleaning up of damaged adjacent landscaping and temporary protections and propping, plus the very careful removal of the defective work adds something like 50% to the labour content of the job.

Then $100 000 worth of rectification work will be carried out, requiring on average $45 000 worth of materials that used up enormous amounts of energy to manufacture and deliver to site…

And so, $45 000 worth of totally wasted building material rubbish is as a result carted away as land fill… and although more jobs are created, it isn’t the sort of jobs we need to move forward as an economy.

And if the amount awarded is (say), half of what is needed to rectify properly (because the VCAT member thought it too much for what it achieved (based on a really tough precedent), then there will have to be two wall tile colours in the bathroom, two different floor tile colours in the house, seconds bricks on the front porch pier due to the bricks being no longer available and so on; and the pittance awarded as compensation will just be enough to render the front porch pier that would otherwise be an eyesore.

What we are getting at here is that because certain defect rectifications were not allowed in full, the drop in house value is another large cost.

If a lesser amount is spent then defect works will need to be left undone, waiting for the building to be tested by the forces that they were supposed to (but were not) designed to be able to resist… at some time in the future.

But for the economy they will most likely be tested at some time and fail to resist those forces… and cost a lot of money to rectify.

So the economy will have to spend $ 138 Billion plus $6 Billion every year from now on… wasting about a third of it on materials, forcing the price up, and two thirds of it on triple the labour needed to do it properly in the first place.

That enormous wastage of labour and materials could have been spent on new projects, new cars a multitude of leisure activities, that instead will be part of a building industry that increases in size but produces no more that it used to.

BUT... the builders who had to fork out the money to the home owners in VCAT will be significantly poorer than previously, in order to pay for the increase in rectification jobs… let’s say that this amounts to $18 Billion.

And the home owners (certainly after the end of the warranty) will have to fork out far more over the years (something like $ 120 000), making them spend far, far less on other things… and perhaps having to sell and down-size in order to cope… particularly if they have retired or lost their jobs.

Other industries will therefore suffer by this amount (helped slightly by the 10% or so of the money earned being spent by those getting the work to rectify).

We call this blight… where the economy hangs on via people who are not progressing as well (because of being hamstrung by the failure of latent and in-built defects after the time when they could have done something about it).

And even if they could have done something about it, the builders would be in a far worse position as a result… and a blight of similar magnitude would occur.

VBAG’S MESSAGE TO ALL GOVERNMENTS… Make builders (unlimited) personally liable for inadequate supervision by experienced personnel… or the residential building industry will run Australia into the ground.

VBAG keeping building consumers informed of the need for a complete overhaul of all things regulatory in the residential building industry. ... See MoreSee Less

Victorian Building Action Group

1 week ago

MOUNTAINS OF BUILDING WASTE IN THE RESIDENTIAL BUILDING INDUSTRY CAN BE AVOIDED ALTOGETHER…

PART B:

GENERAL SCENARIO CREATING DEFECT-RIDDLED NEW HOMES

Spending a little more on safer, longer-lasting materials used in buildings will admittedly cost extra at the start, BUT will save tens of $ Billions in the long-term. There will also be a considerable improvement in our economy with so much less wastage as a result.

There is so much useless waste created in cities… but little is ever written about the huge amount of residential building industry waste... and heaps of building waste can be completely avoided just by defining defect correctly or better still forcing individual builders to be personally liable for supervision.... or even better still... both.

Every time our governments think short-term and dumb us down such as freeing up regulations too much, the chinks in our armour cost several times as much to repair, compared to the gains made (by just a few), when taking short-term actions to serve their greed.

Building specifications with less and less detailed workmanship clauses in them have also dumbed the building industry down, to the point that today, hardly anybody (including tradespeople) seem to know (or care about ) what really constitutes good quality workmanship.

We now virtually have a rogue industry that has hidden understandings… “What a workman does is workmanlike” / “What a tradesman does is tradesmanlike” / “What happens on the majority of new homes must be standard”… even though it is not workmanlike and far from any acceptable standard.

(You just have to look at commonly short-changed works done by tradesmen, (in direct contravention of the requirements of manufacturers once done because they were asked to lower their price to help the builder compete… and to return the favour… save precious time)… to see what a sham this dumbing-down process really is).

Supervisors then accept the sub-standard work if it’s neat.

These hidden understandings, (along with the dumbing down via inadequate specifications), are costing new home owners a fortune in building disputes and constant band-aiding of just the symptoms of the real defects… most never even discovered by building consultants.

And if the builder associations would just take a good hard look at what disputes cost builders overall, they would not be party to ‘the bluffing game’… because fighting disputes also costs builders a fortune… probably far more than just rectifying the defects in the first place.

DISPUTE COSTS ARE CAUSED BY POOR QUALITY BUILDINGS

Dispute costs for building consumers rose rapidly since the advent of the performance-based Building Code of Australia and the privatization of building surveyors and certifying building inspectors in about 1994. In 1996 defects in-built were in full swing… at something like 10 times the rate of just a few years prior to the changes.

In Victoria dispute costs rose to over $3 Billion per annum by 2014 (for both new home owners and builders… totalling over $6 Billion per annum all up.
EXPLANATION OF PERCENTAGE OF DEFECTS DISCOVERED
At his juncture we feel we need to explain why building consultants are inept generally:-
1. They do not have a thorough definition of defect, most of them ignoring manufacturer minimum requirements and the right of each component and system to last at least to a reasonable life expectancy.
2. Most are employees where O H & S rules for workers compensation insurance apply and severely limit what building consultants can access.

Each of these failings results in the halving of what a building consultant will actually discover… which amounts to 25% of the total defects in a home.

And allowing for those sole traders in the industry who are not prepared to say that they have inspected any home unless they have got into the roof and onto the roof… this equates to about 33% (and not 25%) of the total defects and/or symptoms of defects being discovered by building consultants generally.

THE LIKELY EFFECTS OF COMPULSORY CONCILIATION

The government’s agenda is to make disputes go away as fast as possible with as little disruption to business (builders in this case)... has resulted in repressive up-front compulsory conciliation (head-banging) for all disputes in Victoria via the DBDRV… where those in charge do not have to know much about building construction or have a thorough definition of defect… when they will be doing very little else than preside over claimed defects.

And it will probably reduce dispute costs significantly by pummeling home owners into submission where builders return to “FIX” the agreed (and roughly halved) list of defects that were discovered by their inept building consultants (less than 33% on average of what was actually defective… with many of them just symptoms of the actual defects).

The result of DBDRV compulsory conciliation will almost certainly be the general band-aiding of just the symptoms of the actual defects, and the leaving of the large majority of actual defects to cause future havoc for home owners after the warranty period expires.

VBAG also wonders if perhaps it is there to by-pass warranty insurance… or make new home owners think that they are being looked after, following the revealing by the ombudsman and the auditor general (4-5 years ago already), that the insurance was not really insurance at all. We bet that if anyone challenged it in the high court… it would be close to the biggest CON in modern Australia’s history.

Compulsory Conciliation will not make the defects go away… but it will most likely increase the number of defects being left un-rectified in new homes (we estimate) by about 16% for those who decide to have a dispute, and by another similar amount, courtesy of those home owners who simply back off altogether.
And so we arrive at our current situation where the majority of defects are not even being discovered in new homes, new units and additions by anyone… and even when they are discovered, compulsory conciliation permits the band-aiding of many of the agreed defects, because hardly anyone has a thorough definition of defect. If they did then the scope of works to rectify would be what is necessary for the item to last a reasonable lifetime.

Builders in disputes (from considerable collective experience) generally agree to ‘fix (usually band-aid)’ those defects (and usually just the symptoms of those defects) that they can do cheaply… spending $50 on items such as inadequate wet area wall tile junction joints that require well over $1200 to rectify adequately. They will also rectify minor defects to mollify new home owners.

It’s all part of the bluffing game, seemingly almost a universal approach to disputes and drummed into their DNA… when it comes to rectifying defects.

If only they knew that it is actually far cheaper to rectify than to go to VCAT.

VBAG’S MESSAGE TO ALL GOVERNMENTS: Start acting now to consider the ramifications of cheapening new homes to the point that they are defect-riddled with a growing number becoming unsafe.

PART C TO FOLLOW SOON:

HAVING TO RECTIFY DEFECTS RESULTS IN WASTAGE THAT COULD HAVE BEEN AVOIDED ALTOGETHER.

VBAG keeping building consumers informed of the need for a complete overhaul of all things regulatory in the residential building industry ... See MoreSee Less