Does a building permit mean you get what you paid for under your building contract?

Image courtesy of Don Brand Fences and Gates

Building inspections are for minimum compliance only, not quality

One of the key misunderstandings by consumers for building works by builders might just be the role of the building surveyor with respect to quality of the built product. Now, depending upon which state you are in, even the name of this person, both in the legislation and in common use, may be different. For example,  in New South Wales traditionally the role was known as a Building Inspector whereas the legislation now refers to Accredited Certifiers and Principal Certifying Authorities.

With respect to the issue of quality we would like to start with a submission to the Victorian Competition and Efficiency Commission (VCEC) into Housing Regulations in Victoria by the Royal Australian Institute of Architects and Archicentre Limited. Their submission stated that:

“… the public perceived that council inspections by building surveyors should be and were comprehensive enough to pick up poor workmanship and defective construction.”

VCEC’s reporting of there being an apparent misunderstanding about the role of inspections because some consumers interpret inspections as a way of ensuring the quality of building work was hi-lighted in a further submission by Consumer Affairs Victoria who made the point that:

“Consumers may falsely believe that inspections by building surveyors against the minimum standards of the Building Act 1993 are also an inspection of work specified in the contract. Improved consumer awareness of processes under the Building Act 1993 may assist in reducing disputes.”

So let’s have a look at the role and function of the Building Surveyor under both processes in more detail -

For ease in the use of terms we are going to stick to Victoria Australia as the context for our review of this issue. The two key pieces of legislation that we are going to look at to hilight the difference between the actual role of the building surveyor under the Building Act 1993 and the consumer’s perception of the role is:
  1. The Building Act 1993 (the Act);  and
  2. The Domestic Building Contracts Act 1995 (DBCA).
The Act deals with minimum standards in the administration of building control in the building industry. The DBCA deals with contracts between owners and builders for domestic building works. With respect to the Act two of the seven objectives include:
  1. to protect the safety and health of people who use buildings and places of public entertainment; and
  2. to facilitate the cost effective construction and maintenance of buildings and plumbing systems.

These objectives relate to minimum standards.  With respect to the DBCA two of the three key objectives include:

  1. to provide for the maintenance of proper standards in the carrying out of domestic building work in a way that is fair to both builders and building owners; and
  2. to enable building owners to have access to insurance funds if domestic building work under a major domestic building contract is incomplete or defective
BDC consider that these objectives relate to specifying what you want and then getting what you pay for, with a remedy for recovering damages if you don’t get what you pay for. We think a really important aid to understanding the difference lies in the description of what constitutes completion of domestic building works under S43 of the DBCA whereby:

“A builder must not demand final payment under a major domestic building contract until—
(a) the work carried out under the contract has been completed in accordance with the plans and specifications set out in the contract; and
(b) the building owner is given either—
(i) a copy of the occupancy permit under the Building Act 1993, if the building permit for the work carried out under the contract requires the issue of an occupancy permit; or
(ii) in any other case, a copy of the certificate of final inspection.”

The emphasis above on the and is ours. Its the key to understanding why the building surveyor’s minimum mandatory inspections of minimum compliance cannot determine that the (domestic) building works are completed in accordance with the contract between the owner and a builder.  You can see from S43 of the DBCA above that the building surveyor’s function under the Act is only maybe 1/2 of the story under the DBCA for completion means by a builder of building works for a consumer under a contract. Consumers need to be aware that the building surveyor will never, unless specifically engaged and instructed to do so inspect the works for conformance with the “plans and specification set out in the contract.”
So you can see from the difference in the objectives that one (the Act) is about minimum standards the other (the DBCA) is about completion of (domestic) building works according to specification of a certain quality for a defined scope of works. But where the consumer’s misconception is most an issue is where they rely on the building surveyor’s Occupancy Permit or Certificate of Final Inspection as being the completion of works under a contract for domestic building works. This is further exacerbated by a current industry practice which has evolved to see private building surveyors for domestic building works largely appointed by builders as the agent of the owner. The Productivity Commission considered Consumer’s interests may not be best served by their expectations of building surveyors where most industry stakeholders
“described the situation as one where the builder typically hired the surveyor with whom they worked most frequently instead of asking the consumer to appoint a surveyor. This type of arrangement is obviously designed to save the consumer the time and effort of finding a surveyor themselves, but in some cases stakeholders characterised this as working to the consumer’s disadvantage compared with the earlier regulatory scheme where all surveyors worked for councils.”

The independence of private building surveyors is potentially an issue here for consumers as ultimately the building surveyor is required to protect the interests of the owner of the land with respect to compliance with minimum standards. With respect to what needs to be done the Productivity Commission stated further that:
“Steps should thus be taken to ensure consumers are adequately informed—before the point of application for a building permit—about the role and limitations of the regulatory system in protecting their interests. The consumer should be made aware of the regulation affecting the outcome of their project, including their right to choose a building surveyor (who is working in their interest).”
Amongst the industry stakeholders their is a perception that the consumer has  unrealistic aspirations for the building surveyor. In their submission to the Productivity Commission the Western Australian branch of the Master Builder’s Association stated
“It is not the responsibility of the certifier or the building inspector to ensure that quality control has been completed to meet all standards and Building Code requirements throughout the entire project. It is unrealistic to expect every element of the construction phase to be inspected. To achieve this, a building surveyor/ inspector would be required to be on-site all day every day. This would be cost-prohibitive nor would there be resources available to achieve this.”

For the final word we want to recount a story from a recent interview FSC conducted with the Director of the Housing Industry Association in Victoria. He believed one of the great missed opportunities for building surveyors in Victoria was the inspection of domestic building works for both quality under contracts for domestic building works and compliance with the required minimum standards!

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2 Responses to “Does a building permit mean you get what you paid for under your building contract?”

  1. [...] The Building Regulations Blog Building Regulations, Permits, Codes and the BCA for Architects and Building Designers. « Does a building permit mean you get what you paid for under your building contract? [...]

  2. [...] been working on a state government project where we found some research that indicated that consumers for building work did not understand the difference between “suitable to occupy” and compliance. There is an important [...]

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