This is a series of articles summarizing a number of workshops on weathertight remediation for builders which the Ministry of Business, Innovation and Employment – Building and Housing group has been running around New Zealand. They outline some of the things a builder may need to consider before, during and after such a project
Welcome to the first in a series of articles based on a series of workshops on weathertight remediation for builders which the Department of Building and Housing has been running at centres all over New Zealand. As the presenter of this course I have been able to share some of my experiences from a decade of remediating leaky buildings with fellow builders. Whilst it would be impractical to cover all of the content of this full day workshop in this series we aim to cover some key points that may assist any builder who is considering getting into this line of work to perform quality remediation and manage any project risks.
At some point in its life a building is highly likely to allow some water past its cladding. It is how the building deals with that moisture that is the key. If moisture cant quickly drain out and/or if air cant circulate to promote drying behind the cladding, extensive damage can result. By far the majority of the hundreds of buildings I have been involved with showed few, if any, visible signs of water penetration and resultant damage. You dont need to have cracked exterior plaster or have interior linings falling from a ceiling to have trapped moisture related damage. A gradual and occasional introduction of moisture is all that may be required to create an environment suitable for decay to be present and flourish. This can be relatively rapid where little or no treatment is present in the affected framing.
We dont actually know exactly how many buildings have been, are or will be affected. A 2009 Price Waterhouse report estimates between 22,000 and 88,000 homes, with the industry consensus around 40,000. A truly staggering number of families have been, are and will be impacted by this estimated $11bn phenomenon. Whilst a majority of current cases are appearing in Auckland, many experts believe that it is a New Zealand wide problem. Those residing in dryer geographical areas just may not have discovered it yet.
There is much conjecture and controversy about what has caused this problem but it is my view in short, that it is a systematic failure of the industry as a whole. Complex, incomplete and questionable suitability of building design, poor use and suitability of some products, incomplete technical knowledge and skill as well as too little on-going training for many involved in the building process have all contributed.
Clearly there are a large number of leaky buildings needing repairs. This presents an opportunity for builders at a time when new builds are at historic low levels. There is a perception that getting involved in leaky home repair work is risky and best avoided. While arguably there are more risks and unknowns associated with these projects, if a builder goes in with eyes open and is aware of these risks and ways that they can be managed a successful outcome is more likely to result. This will be of benefit not only to the builder but also the client and all those involved in the project.
In this series of articles, I will be talking about a range of things that are important for the builder to be aware of including:
|The author: Harry Dillon is a builder and has been involved with the repair of over 300 homes over the last 10 years. This article represents Harry’s views which may not necessarily be same as the Department’s or ITM.|
When you are contacted by a designer or client it is crucial to know if an assessment has been carried out on the building. If there is, what are the skills and experience of the assessor and is the report current? If there is no assessment, in most cases it will be appropriate to advise the owner to obtain an inspection and report from a competent person.
Have plans been drawn up and consent applied for? What are the qualifications and experience of the designer and those supervising the repair process, providing ongoing design support and evidence collection? Until the cladding is removed, it is often difficult to determine the extent of the work needed and details required. If a designer has little experience in remediation, will they be able to deliver details in a reasonable timeframe? Note that since March 2012 this is restricted work requiring the appropriate design license. Case law has shown that builders can carry significant liability if they design missing or change existing details which then go on to fail.
When considering the legal ramifications of the duty of care that has been established under case law, how suitable is the proposed repair methodology, especially targeted or partial repair types? Working with the right experts can help mitigate this risk.
The ‘like with like’ provision in Schedule 1 of the Building Act allows repairs and maintenance to be carried out on a building without a building consent, but only where the building has not failed the durability requirements of B2. Due to these requirements any building that has leaked within 15 years will strictly speaking require a building consent for repairs to the envelope.
Having an understanding of the whole remediation process and what options are available for potential clients has helped me differentiate from others in the market and develop a relationship with those clients. Carrying out a quick assessment of the property in person or over the phone to determine the age, design features, building materials and why they think they may have a problem will be a useful first step in determining the options available. If their home has a CCC, who it was issued by and when is critical.
Whilst not the only limitation period on statute the 10 year long stop limitation period of the Building Act 2004 is the most relevant to building projects. If a client falls outside these limitation periods their options for holding those to account for their loss through litigation narrow significantly. Due to the complexity of such cases it is probable that a client will need the advice of other professionals for legal and expert advice to determine their most appropriate course of action.
If a client is unfortunate enough to own a leaky building they may also need to consider the potential health implications of residing in their home and the length and stress of the whole process. Options could include selling back their home to the defendants, the original builder perhaps, or demolition with consideration for land value and remediation costs.
A builder’s most obvious risk is arguably security of payment so understanding how a client is intending to fund the repairs is essential. A client may plan to 100% self fund for a small repair for example - but what if scope and budget significantly increase? They could then be driven to pursue parties using the WHRS or private litigation though the courts. The client may also be using the governments new Financial Assistance Package (FAP), the subject of our next article.
The author: Harry Dillon is a builder and has been involved with the repair of over 300 homes over the last 10 years. This article represents Harry’s views which may not necessarily be same as the Department’s or ITM.
Welcome to the third in the series of articles based on the Ministry of Business, Innovation and Employment – Building and Housing group course that has been running at centres all over NZ. This article provides a brief overview of some of the relevant information for the builder if the project receives assistance from the government’s Financial Assistance Package (FAP). A detailed fact sheet for builders can be downloaded from the Building and Housing group’s website www.dbh.govt.nz.
The Financial Assistance Package has been introduced to ensure more time and money is spent on repairing leaky homes instead of disputing the problem. The FAP offers homeowners the certainty of a financial contribution and helps get more leaky homes fixed faster.
To qualify for the FAP homeowners will need an Assessor’s Report on their home which will identify the weathertightness damage to the building and provide an estimate of the scale and cost of the work needed to repair it. Note that the Assessor’s Report will not identify non-weathertightness issues with a dwelling, such as structural problems arising from the original work although these may also need to be addressed in order to obtain a building consent.
The recommended scope from the Assessor’s Report forms the basis of the Repair Plan and consent documents. Once the Repair Plan is agreed, the owner will seek quotes from at least two, preferably three, builders. The homeowner’s preferred quote must be submitted to Building and Housing using the Quote Template found on the Building and Housing group’s website.
It must include an invoicing schedule specifying the expected amount and timing of invoices. The invoicing arrangements are a matter between the builder and homeowner and are not necessarily linked to the Building and Housing group payments to the home owner.
Quotes must be fully priced but rather than include very large sums for contingencies, builders may be better to price certain activities such as removal and replacement of timber by an hourly or per lineal metre rate.
FAP assistance only covers work needed to reinstate the building to an acceptable level of weathertightness. Any building work beyond this is called “betterment”. It can be undertaken, but is not eligible for FAP contributions. The builder needs to quote separately for any betterment and needs to identify betterment also in any invoices.
Builders will need to include with the quote a signed Contractor’s Statement. This Statement includes various undertakings in relation to: site access for the Building and Housing group and council staff; payments, variations and scope changes; invoicing arrangements; record-keeping; confirmation of your contractor’s all risks insurance cover.
Buildings will be inspected by the Building and Housing group immediately following removal of cladding, to confirm that the Repair Plan will address all of the weathertightness issues. If there is significant change of scope then the owner will need to review their Repair Plan and may need to update their quotes to include any newly-discovered repairs that are needed.
The Building and Housing Group will pay contributions to qualifying owners throughout the repair process, following inspection and sign-off by councils at agreed milestones. These inspections may occur at the same time as Building Consent Authority inspections, but they are conducted solely for the purposes of confirming that contributions can be paid to the homeowner. The final contribution payment will usually be made once the Code Compliance Certificate has been issued and copies of all invoices have been provided to the Building and Housing group.
Larger, more complex buildings will often need a customised and phased approach to the Repair Plan and building elements.
The Homeowner can still pursue other parties under the Weathertight Homes Resolution Services Act 2006, and a builder could be asked to provide evidence in a claims process. Good documentation is therefore critical.
Also remember that since March 2012, repairs to leaky buildings must be carried out by licensed building practitioners or under the direct supervision of a licensed building practitioner (LBP).
WRITTEN BY HARRY DILLON
This article looks at some of the considerations when tendering for a re-cladding project. I will be sharing some of the expensive lessons I have learnt remediating hundreds of NZ homes. In the current market where rates and margins are being squeezed it is even more important that we are aware of what we are getting into and that we minimise the unknowns so we can preserve our margin.
Let’s face it, the market is largely price driven so in order to try to level the playing field with other builders less experienced in tendering, its important to be clear about what has and hasn’t been allowed for and why. This alerts the designer and client to things they may not have considered and that other tenders may not have included. This helps minimise variations and unknown costs blowing the budget and reduces the chances of a dispute. Clearly outlining timelines allowed for each section of the build process assists not only with internal pricing clarity, but also with extension of time claims considering the common down time that can occur on such projects as various parties document the building failures or are waiting on remediation design clarifications.
Site access and storage can be more challenging on remediation projects due to the nature of the works and the fact that the site is mature with neighbours, fences, landscaping and possibly a swimming pool. These along with the scaffolding setup, have a critical impact on site productivity and therefore a builder’s bottom line and are rarely covered in a set of contract documents. Careful consideration of the distance at which scaffolding is set up from the building for easy removal and reinstatement of the cladding and windows as well as access points can make a significant difference to on-site efficiency. Plan carefully when the most effective time is to erect the scaffolding if concrete nibs are to be installed or decks re-laid and waterproofed. Has time been allowed to frequently empty water from and re-tie the tarpaulins and side mesh to the scaffolding after inclement weather over the project? Will there be scaffolding changes required during the project?
The use of contractors for parts of the project such as cladding removal not only fixes a difficult to quantify cost (especially tip site unfriendly EFIS), it also means a messy and unpopular job is not being done by the site staff. Contract documents may or may not mention the reuse of some items such as spouting, insulation or downpipes. But how practical is this with the new cavity cladding thickness and damage free storage? Are roof extensions required or thought of? Will the stormwater downpipe risers have to be moved?
The new cladding thickness and weathertightness details will probably result in the windows having to be re-installed, re-jammed, with some TAs requiring the sealing and re-mitering of reused joinery. Can in these cases a 15 year durability warranty be provided or is a better long term solution to replace the windows with new ones? Other issues that need to be considered are: • Will additional framing need to be installed for a new cladding system? • The need to straighten an existing structure to meet any new cladding warranty requirements is difficult to determine pre-start. • Non-compliant work discovered during remediation is commonplace. How has this been allowed for?
Preliminary and general costs are often significantly higher than on standard projects. The additional paperwork, supervision, liaising with the various experts (both the client’s and potential defendants’) and the collection of detailed information on the cost breakdown of each of the building points of failure can take significant time and therefore money. Due to the nature of the works, ‘making good’ can be a major potential cost and cause of dispute. This can be reduced with a thoroughly documented pre-start survey. Whether the client is staying during the works can have a considerable impact on the project in many ways, which we will investigate in future articles. In this instance cleaning the affected areas every day because a client is living there can accrue a significant cost. What is the client’s expectation regarding a third party warranty and can it be provided? If a builder allows for all of the above, will they get the job if other tenderers have not made these considerations? And if these costs are going to be incurred by the builder, do they really want the job?
THE MAIN RISK YOU FACE IN UNDERTAKING LEAKY HOME REPAIRS IS IF FURTHER LEAKS DEVELOP LATER ON DOWN THE TRACK, THE HOME OWNER WILL FILE A CLAIM AGAINST YOU. THIS ARTICLE WILL FOCUS ON HOW YOU CAN EFFECTIVELY MANAGE THIS RISK.
Written by Geoff Hardy and Gagan Tangri of Madison Hardy
Leaky home projects where the owner wants a cheap patch-up job done without a building consent are high risk and you should stay well clear of them. You want to undertake low risk projects where a reputable building surveyor has done a thorough investigation and prepared a report on the causes of the leaks, an architect has prepared plans and specifications for the repair work and a building consent has been obtained. Although the risk of future leaks is much lower in these projects, there will inevitably be occasions where even a consented repair job won’t turn out to be watertight in the long run. It therefore only makes good sense to protect yourself. There are five main ways of doing that.
Limitation periods are the first point of protection; the law imposes time limits within which people must commence legal proceedings. For claims based on something that happened on or before 31 December 2010, if a claimant is going to bring a claim based on an alleged breach of contract, he has 6 years from the date when he says the relevant term of the contract was breached. For claims based on negligence (i.e. carelessness which caused someone loss that was reasonably foreseeable), the claimant has 6 years from the date on which the loss or defect became reasonably discoverable. For claims that are based on acts or omissions after 31 December 2010, where the claimant is seeking a payment of money, the limitation period is 6 years from the relevant act or omission. But even after the 6 years have expired, if the claimant discovers (or should have discovered) that he has a claim, he has a further 3 years from then to file his claim. However, where the claim relates to building work, no claim can be brought more than 10 years after the act or omission upon which the claim is based.
Secondly, you can protect yourself against liability to the current owners by inserting special clauses in your building contract, which clearly define your scope of work. The special clauses should provide that you are only hired to do the work shown in the plans and specifications, not to comment on them, nor to point out any potential defects either in the repair work or in the rest of the house that is not affected by the repairs.
The third way of protecting yourself is to have an insurance policy that covers you against the risk and consequences of your own errors and omissions (mistakes). The first relevant insurance policy is known as a guarantee (or surety) that is offered for example by members of the Certified Builders Association and Registered Master Builders Federation. These products protect the owner rather than the builder and most do not cover weathertightness work; a ‘WaterTight Warranty’ is however now available. The second relevant insurance policy is known as Errors & Omissions (“E&O”) cover or “professional indemnity”. Unlike the surety products, this protects the builder rather than the owner. It covers you where you or your employees, contractors, subcontractors or suppliers have made a mistake, or put faulty components or materials into the building.
The fourth way of protecting yourself is by way of limited liability companies and trusts.
The whole idea of a limited liability company is to protect your personal assets from business risks. However you cannot abuse the privilege of limited liability; you cannot for example keep liquidating your company and replacing it with a new one for each leaky home job you undertake. Secondly, a limited liability company offers no protection against claims brought against you personally if you had “hands on” involvement in the remediation work (i.e.: you worked on-site or issued instructions about how to do the remedial work). The necessary safeguard in such a situation (which is typical in small owner-operator businesses) can be provided by a trust. When you put an asset (such as your house) into trust and you become a trustee, you hold that particular asset as a custodian or guardian for the people who really own it, namely the beneficiaries. For that reason, your own creditors can’t touch that asset, unless they can prove your trust is a sham, or you put your assets into trust for the purpose of defeating your creditors. So your trust has to be genuine and it obviously pays to create your trust when everything is rosy, rather than when the creditors are breathing down your neck
The fifth and possibly the cheapest and most effective way to avoid future liability for leaks, is to be thorough in your work rather than economical. These are the types of projects where overkill is more appropriate than economising. Hopefully you will be able to factor that degree of thoroughness into your pricing.
As builders we are all aware of our many responsibilities on our building sites. But in this article I will be taking a snap shot of some of the additional considerations relating to health and safety on remediation projects. Due to the nature of such work some hazards are elevated from those encountered on “normal” projects along with additional ones I for one had not considered when first getting into this line of work.
The damp conditions and decaying materials present in many leaky buildings create an ideal environment for moulds and fungi to flourish. Whilst there are hundreds of such moulds many are relatively harmless. Unless you have had the mould identified by a laboratory, it is best to assume all moulds are potentially harmful and to take precautions.
One of the most prevalent and common mould varieties which is associated with adverse health effects is stachybotrys (stacci).
Individuals with chronic exposure to toxins produced by this fungus reported cold and flu symptoms, memory loss, muscle aches, sore throats, diarrhea, headaches, fatigue, dermatitis, intermittent local hair loss, cancer, and generalized malaise. The toxins produced by this fungus will suppress and could destroy the immune system affecting the lymphoid tissue and the bone marrow.” – Mold Help 2004
Pretty eye popping stuff. So what does that mean for the building occupants, those visiting the site and site staff? It’s not just an immediate hazard, there are longer-term implications, too.
It is the spores of this mould that are the most toxic as they can contain chemicals called mycotoxins. Ingesting or inhaling these spores is when it is at its most hazardous. Stacci typically grows on products containing cellulose such as the paper on plasterboard lining and wood fibre reinforced cement products in the presence of water. When this mould is damp it is relatively inert but when it dries out spores become airborne and therefore more hazardous to personnel and can contaminate other areas of the site.
So what if you think you have found stacci?
Knowing that this is a hazard what is the appropriate PPE gear? If staff are to wear disposable suits, gloves, masks and goggles whilst handling it, is it good enough just to supply it? I have witnessed staff cross contaminating their other equipment as they disrobe their PPE which led me to set up a disrobing procedure to prevent this happening and also decide what can be re-used or not.
A well-ventilated area should be set up for disrobing PPE with washing facilities for workers and their PPE. A sobering conversation with one of my staff who had not worn their required PPE and therefore potentially taken stacci spores home to his young family compelled me to re-evaluate PPE compliance on his site. In consultation with our staff we introduced an incentive based competitive environment, which vastly improved the proper use of PPE and was so successful it was rolled out to our other sites.
It’s not just workers who are exposed to stacci and other significant hazards on site. There could potentially be many more visitors on site than on a new build. For example, lawyers and experts for both sides of a legal dispute, designers and the council staff will probably be on site more often, too.
Occupants living in the building require careful H&S consideration especially on tenanted multiunit sites. How can a builder implement their H&S policy in reality when fire egress paths, emergency lighting, fire rated linings and decks are going to be impacted during works? Has the cost of keeping them safe 24/7 been allowed for in the contract?
There are other hazards that are elevated on such projects and require consideration. One of these is tarpaulin-affected scaffolding. I have seen first-hand scaffolding being lifted dangerously in strong winds. Dust is another, especially from cutting plaster cladding. But by simply using dust extraction equipment on cutting gear, it can be minimised.
Whilst additional H&S risks potentially do exist on these types of projects they can be managed with planning and knowledge.
Re-cladding projects are like renovations on steroids, there are very few aspects of the house that won’t be affected. It is a very stressful time for the homeowner. All they typically get at the end of it is the house they thought they bought in the first place and all they have to show for is usually a bigger mortgage. It is not just the homeowner who is effectively the client. Their funder has a vested interest in restoring value in their collateral. The TA along with government may also be contributing if the client is participating in the Financial Assistance Package scheme. On multiunit sites, a body corporate will be involved and usually an elected building committee will represent all of the owners.
Whether the building occupants are going or staying can make a significant difference to the operation and efficiency of a project. Some owners may not have the desire or the means to vacate their home. If they are vacating, will they be taking their chattels, too, as there may be insurance implications for them remaining? It is also much more efficient if household items don’t have to be moved or protected during the repair process.
As has already been seen in Canada, where they have been dealing with a similar problem for 20 years, we are already carrying out 2nd generation repairs in NZ. As we all know, builders carry significant latent liability for our work. Therefore it is critical to minimise any risks and consequences of future failures. Getting the repair done right is simply the best way to achieve this. Working with suitably experienced professionals is critical. A builder should expect a designer to provide details that are timely, that work and are appropriate. The law is getting much clearer on this. If the builder comes up with his own detail or builds something that is on the plans that they know will possibly fail, who is liable if it does?
Builders, myself included, are not exactly well known for their paperwork, but good record keeping helps variation management and really helps resolve current or future potential disputes. In addition, documenting all the damage discovered with location specific photographs builds a historical record of what was found. Quality control systems and good site supervision can assist in catching even minor errors or omissions in the rebuild process that could otherwise accumulate and contribute to future building failures.
Discovering as much damage as early as possible allows budgetary implications and design clarifications to be dealt with right at the start. This is especially important if the damage is worse than initially assessed.
On every project I have been involved with there is at least some degree of non-compliant work discovered in the original structure. How is this dealt with?
Other things to consider include the temporary bracing that may be required as the removal of bracing (either external or internal) or removal of cladding to allow for concrete nib installation may affect the integrity of the structure.
A fundamental question for most remediation projects is what timber to leave in, treat insitu or replace. There are many types of timber rot and ways of testing for them. Visual and strand tests, for example, have their uses but also their limitations. The only way to be absolutely certain of its type and history is a lab test. Some rots are visually hard to detect and timber sampling of what appears to be sound wood (even if only as a datum) can help prevent the consequences of leaving structurally unsound timber behind. Having suitably qualified and experienced experts to interpret and instruct not only helps with compliance but could also potentially help narrow a builder’s related latent risks. If builders have doubts about what has been instructed they can simply get testing carried out themselves as an inexpensive form of insurance.
As with risks on any type of project, understanding the risk is key to managing it.
Written by Harry Dillon
In this article we will be going back to basics. Our industry has borrowed from leaky building veterans Canada and adopted the 4 “D”s first principles of design.
These principles can be applied to all types of building projects but have particular relevance to an already failed building. The first of these is deflection. A house with eaves, for example, can create a weather shelter to areas of the cladding. If less of the cladding is being exposed to moisture there will be less of the building with potential to let moisture in. This is also supported by the analysis carried out on WHRS assessment reports which shows that houses with no eaves feature at a disproportionately higher percentage than they appear in the overall building stock. Two of the other “D”s, drainage and drying, are equally fundamental. A majority of the costly damage to a “Leaker” is from trapped moisture where any moisture that has breached the cladding can’t escape, and insufficient ventilating air is present to permit drying. The last of the “D”s is arguably the most important: durability. Making durability a primary concern when designing and constructing a building will often dictate the use of the other basic principles.
We have many standard detailing solutions, including in E2/AS1, which if used is enough to demonstrate design compliance in certain situations. Is using these ALWAYS the best way to enhance durability of a building in all situations or is there sometimes a better way? In many cases it may not make a material difference to the overall cost.
Differential air pressures and their effect on a building and how they are dealt with can really affect the durability of a building. High air pressure always wants to go to lower pressure, as does positive pressure to negative. Positive pressure on a building (eg wind pushing on an elevation) will create negative pressure (uplift) on both sides of 25 degree pitch roof. Similarly on the other 3 elevations of the building air is effectively sucked off the building, negative pressure. As positive pressure travels to negative pressure what does that mean for building wrap at external wall corners or wall to roof junctions? Should we be choking them to avoid moisture driven air being potentially sucked through the corners of a cavity system, under parapets tops or into roof spaces via barges? Similarly, air seals around windows effectively choke the high pressure outside possibly moist air being sucked through to the low pressure interior.
Properly installed cladding cavities are excellent at assisting with all of the 4 “D”s, as well as providing redundancy in the system and simplifying detailing solutions. With the 2011 changes to E2/AS1 there are now very few situations where an Acceptable Solution design will not require a cavity.
The “Dry” side of a cavity is the framing side of a cavity with the “Wet” side being directly behind the cladding. Ideally all moisture should be kept to the outside of a cladding system, however if a design detail does not make this possible then moisture should be contained on the “Wet” side. If moisture is allowed to easily and regularly get to the “Dry” side where the structural framing is it potentially compromises durability. BRANZ research has found that the size of the vents in a wall cavity is the single biggest factor in the systems drying rates. If building wrap is baggy (especially if pushed out by insulation) or the cavity batten installation hinders the airflow how does that affect the drying capabilities of the cladding system?
Changes to the original design of a building such as a different cladding type, installation of eaves or a pitched roof could also be considered by a client for better adherence to the 4 “D”s, resale value or just aesthetic reasons.
In consideration of all of this, as builders we need to ask the question, is there a better way of achieving a durable weathertight building? If you believe the specified detail may fail or could be improved talk to the designer and request a change to the specifications. In serious cases it may even be advisable to flag and document your concerns to the home owner and Consenting Authority. By doing so you it may assist in showing you have done your best to fulfil your obligations in case the detail fails later on.