Ireland is not unique in having experienced major house- building disasters such as the pyrite and Priory Hall debacles. But the lengthy delay in resolving the problems of homeowners is, regrettably, unique – largely because of the lack of a comprehensive home warranty or latent defects insurance scheme.
Since the Stardust Tribunal, environment ministers have been faced with the conundrum of how to introduce an effective building control regulatory system. It was only in March of this year that the current Minister, Phil Hogan, introduced the Building Control Amendment Act in an attempt to deal conclusively with the issue.
His announcement of “strict new measures for the control of building projects” was a significant attempt to “provide consumers with the protection they need and deserve”.The Minister committed to a number of other initiatives to reform the building control framework including:
Undertaking "a review of construction project-related insurance" in conjunction with Minister for Jobs, Enterprise and Innovation;
Implementing "a voluntary scheme of registration for builders and contractors prior to transitioning to a statutory scheme over time";
Allowing building control authorities to "concentrate on applying a risk-based approach to inspection and compliance-checking programme".
Much of the focus of departmental officials since the passing of the Act has been on the proposed new inspection and certification system for professionals and builders. Progress has also been made by the CIF on a system of voluntary registration of builders to be introduced in 2014. It is planned to introduce a statutory system in 2015.
However, with just 14 weeks to go to commencement of the new regulations, there is little evidence of sufficient progress on latent defects insurance or on specific oversight and inspection requirements for building control authorities.
This lack of momentum lies in an understandable, but misguided, policy of avoiding potential financial exposure for the State arising from failures of building control. Ironically, the outcome of this policy has been that the State and Dublin City Council have now incurred significant financial liabilities in the resolution of the Priory Hall problem, and the State has also recently agreed to fund resolution of the pyrite problem.
The new regulations will impose significant new responsibilities on all those involved in the building industry, including architects, engineers and builders. They will raise standards generally, and building control records will identify those potentially liable in the event that defects occur in new buildings.
However, the risk for consumers when problems occur is that, particularly in complex cases, costly litigation may be necessary to resolve issues. Thus, if the regulations are not augmented by the other necessary measures – in particular, an effective local authority building control system and a latent defects insurance scheme – then we will almost certainly experience future problems similar to the Priory Hall and pyrite debacles.
The best way to minimise defects arising in construction, based on international best practice, is to prevent them occurring during the building process through effective State/local authority policing of design and construction, combined with regulatory performance standards for builders and professionals, and a home warranty scheme for when problems arise.
Such systems involve building control authorities carrying out random and risk-based inspections of design documentation and of construction sites to detect non-compliance and prevent breaches of regulations. And where they are not prevented, a comprehensive home warranty or latent defects insurance scheme will provide a prompt remedy for consumers in the event of a serious defect in their home.
The Department of the Environment should refer to existing international systems to establish defined performance criteria for building control authorities in relation to their oversight and policing functions. The current draft code of conduct for inspecting and certifying works, published by the Minister, is noticeably vague in relation to the role of BCAs. It states that “it is expected that Building Control Authorities will undertake an appropriate level of assessment and inspection”.
Given the unsatisfactory performance of many BCAs in relation to inspection since the introduction of building regulations in 1991 these vague aspirations are not enough to protect consumers. The Minister needs to direct his officials to amend the final draft of his code of practice so that BCAs must deliver a defined and measurable “risk- based approach to inspection and compliance-checking”.
A national home warranty/latent defects insurance scheme needs to be universal in its application to new homes. This can be achieved in the early phases, by the Minister requiring that banks, on a voluntary basis, ensure the relevant warranty or insurance is in place, as a condition of home loan approval, followed by legislation for a statutory, mandatory scheme.
Phil Hogan is the first minister in more than 30 years who has attempted to deal with the issue of a comprehensive building control system. To complete the task he needs to ensure that his officials deliver clear performance standards for monitoring by building control authorities and minimum standards for a national home warranty/ latent defects insurance scheme.
Tony Reddy is chairman of Reddy Architecture+Urbanism and a former president of the RIAI
