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Construction industry 'suffering from compliance paperwork scramble'

Fuseworks Media
Fuseworks Media

" Paperwork wouldn’t be so bad if it weren’t for all the paper. And the work." - Darynda Jones.

It might sound obvious but all building work in New Zealand must comply with the building code. And the onus is on designers, builders and the local authorities to make sure compliance happens.

But a leading property and construction lawyer says completing compliance paperwork often tends to occur in a flurry following the completion of a project - to the detriment of builders and developers. And he’s also taken aim at local authorities demanding unnecessary certificates.

K3 Legal Director Jeff Walters says, "This last-minute scramble can lead to a number of issues that push cost and time onto developers and builders. Subcontractors can be slow to submit producer statements, records of work and other certificates and, if there is a dispute, these documents can become leverage. If the subcontractor goes into liquidation, well, then you’re on your own. And if a builder fails to arrange for an inspection, you have to reopen the works."

Local authorities can insist on more and more documentation from the developer and the builder and, until it’s delivered, the code compliance certificate (CCC) does not get issued,

"The homeowners continue paying project funding rates, the developer continues to pay holding costs, and the builder may be incurring delay damages," he says.

The solution, says Walters, is to get started on paperwork as soon as possible, not wait until the end of the project.

"When the relevant works are completed, the subcontractor or contractor needs to issue the relevant documents. The contractor should have the documents when the relevant local authority inspection is carried out. That way you minimise the risk the documents become leverage in a dispute at the end of the contract when you may be forced to pay claims you do not owe, just to avoid the loss flowing from the lack of a CCC. It also means you have the documents as soon as possible and if the subcontractor later goes out of business, you’re safe," he says.

Despite being widely used, producer statements and manufacturing certificates have no particular status under the Building Act 2004, so it pays get them before a dispute arises.

"If you cannot get them, check whether you really need them. Local authorities are required to assess whether the work complies with the building consent. Like any public entity, the local authority must act reasonably. It is not reasonable to insist on producer statements to confirm matters that the local authority should be able to confirm for itself. If the local authority has inspected the work, then it should confirm it complies with the building consent. It should not avoid its responsibility by demanding an unnecessary certification. And it should not demand certification if another alternative to confirm compliance is available, e.g. photographs of the work."

A common issue is local authorities demanding construction producer statement (PS3) documents for waterproofing, steelwork, plumbing, and drainage when they inspected the works at the relevant stage - inspections the developer or builder paid for.

Local authorities should also not demand manufacturing warranty information, as that is not necessary to confirm compliance with the building consent.

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