The Building Act that B*ggers Building Back Better
Damien McGill
Engineering Happy Healthy Homes for People and Planet. Certified Passive House Consultant
Insurers only have to carry out repairs in accordance with the 2004 Building Act.
New Zealand must build back better was a headline of a press release from the Insurance Council of New Zealand. https://www.icnz.org.nz/industry/media-releases/new-zealand-must-build-back-better/
The legalised gambling industry that is insurance must be feeling a piqued period of pocket pain after recent natural disaster events, to write something like this.
Don't get me wrong, I fully agree with the words, especially the last two paragraphs.
"But every dollar invested in risk reduction will save many more dollars in future economic costs, keep people safer and reduce the stress, trauma and loss to the community from similar event in future. Future development needs to take a long view – houses are built to last 50 years or more..."
More great headline grabbing stuff, with perfect sentiment, but who's going to pay for it??
Insurers certainly won't.
They'd rather pay lawyers.
Remember, insurance fixes the symptom, not the cause.
As everyone in #canterbury knows, #insurance doesn't cover betterment or building back better. A sizeable portion of the rest of #aotearoa #newzealand is about to find this out.
I'm repurposing the article I wrote about renovation, because guess what, it applies equally to natural disaster repairs. The Building Act only requires that alterations (this includes repairs) to existing buildings continue to comply at least to the same extent as they did immediately before works began.
What am I talking about?
The Building Act 2004, has four sections that I know of that dissuades disaster improvements to insured existing housing stock. I’ll discuss each below, underlining the relevant sub clause in each case.
Section 41 Building Consent not required in certain cases
Section 41 determines when a building consent is not required. This includes
(b) any building work described in?Schedule 1?for which a building consent is not required (see??section 42A);?
Section 42A Building work for which building consent is not required under Schedule 1
(1)?Despite?section 40, subject to the conditions set out in subsection (2) and whether or not a building consent would otherwise have been required, a building consent is not required for building work in the following categories:
(a)?building work described in?Part 1?of Schedule 1; or
(b)?building work described in?Part 2?of Schedule 1 that is carried out by an authorised person (see?subsection (3)); or
(c)?building work described in?Part 3?of Schedule 1 if the design of the building work has been carried out or reviewed by a chartered professional engineer and the building work has been carried out in accordance with that design.
(2)??Subsection (1) is subject to the following conditions:
(a)?the building work complies with the?building code?to the extent required by this Act:
(b)?after the building work is completed, the building,—
(i)?if it complied with the?building code?immediately before the building work began, continues to comply with the?building code; or
(ii)?if it did not comply with the?building code?immediately before the building work began, continues to comply at least to the same extent as it did then comply:
(c)?the building work does not breach any other enactment:
(d)?the building to which the building work relates is not a hazardous substance location that is required to be authorised under the?Health and Safety at Work Act 2015?or any regulations made under that Act.
(3)?In subsection (1) (b),?authorised person?means a person who is authorised under the?Plumbers, Gasfitters, and Drainlayers Act 2006?to do the work, except for a person who is authorised under?section 15,?16,?19, or?25?of that Act.
Simply put, if you repair something old, you can repair it just like it was as long as you make it “no worse than it was before.”??
I was involved in over 400 insurance claims resulting from the Canterbury Earthquakes and fought this the whole time. It was a losing battle.
Schedule 1?Building work for which building consent not required
Part?1?Exempted building work
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General
General repair, maintenance, and replacement
(1)?The repair and maintenance of any component or assembly incorporated in or associated with a building, provided that comparable materials are used.
(2)?Replacement of any component or assembly incorporated in or associated with a building, provided that—
(a)?a comparable component or assembly is used; and
(b)?the replacement is in the same position.
(3)?However, subclauses (1) and (2) do not include the following building work:
(a)?complete or substantial replacement of a specified system; or
(b)?complete or substantial replacement of any component or assembly contributing to the building’s structural behaviour or fire-safety properties; or
(c)?repair or replacement (other than maintenance) of any component or assembly that has failed to satisfy the provisions of the?building code?for durability, for example, through a failure to comply with the external moisture requirements of the building code; or
(d)?sanitary plumbing or drainlaying under the?Plumbers, Gasfitters, and Drainlayers Act 2006.
Again, this provides insurers the power to avoid betterment.?
Further reinforcement, comes in the form of s112. Repairs (alterations) to existing buildings is primarily what insurance is for.?
Section 112 – Alterations to existing buildings
(1) A building consent authority must not grant a building consent for the alteration of an existing building, or part of an existing building, unless the building consent authority is satisfied that, after the alteration,—
(a)?the building will comply, as nearly as is reasonably practicable, with the provisions of the?building code?that relate to—
(i) means of escape from fire; and
(ii) access and facilities for persons with disabilities (if this is a requirement in terms of?section 118); and
(b)?the building will,—
(i)?if it complied with the other provisions of the?building code?immediately before the building work began, continue to comply with those provisions; or
(ii)?if it did not comply with the other provisions of the?building code?immediately before the building work began, continue to comply at least to the same extent as it did then comply.
(2)?Despite subsection (1), a territorial authority may, by written notice to the owner of a building, allow the alteration of an existing building, or part of an existing building, without the building complying with provisions of the?building code?specified by the territorial authority if the territorial authority is satisfied that,
(a)?if the building were required to comply with the relevant provisions of the?building code, the alteration would not take place; and
(b)?the alteration will result in improvements to attributes of the building that relate to—
(i)?means of escape from fire; or
(ii) access and facilities for persons with disabilities; and
(c) the improvements referred to in paragraph (b) outweigh any detriment that is likely to arise as a result of the building not complying with the relevant provisions of the?building code.
(3)?This section is subject to?section 133AT.
Therefore, there is apparently no legal framework to require any betterment to the existing housing stock through insurance driven repairs, despite alternate ways to read this section. ?
The insurance industry can write all the wise words they like, but their track record shows that in reality, the minimum standard will always prevail as the lowest price option, whatever the long term cost is.?
So what’s the solution?
These sections need to be rewritten urgently.
Some adjustment of the highlighted clauses is required to ensure that the repair and maintenance of any component or assembly incorporated in or associated with a building has to comply with the current (or future) building code. This will ensure that buildings are made resilient as the climate changes and disasters like flooding increase, rather than repaired only to be damaged again in the next event.
I'm not a lawyer, but it may be just as simple as rewording S42A & 112? But, I suspect it's more complicated than that!
Without the regulatory framework to repair homes as standards change, nothing will change.?
In fact, there is a real risk that we'll continue to throw good money after bad.?
Contract Project Manager focusing on short-term complex projects, Many years of experience in hospitality, retail, landscape & high-end residential sectors. I'm very mobile & open to offers throughout NZ.
2 年Unfortunately Damian, I think it will be much worse. For rebuilds, many of the insurers have now transitioned from full replacement, to agreed value. Homeowners in the rebuild pool will simply be given their money and told where to go. And with nothing to dispute, it will happen quickly. Literally thousands of homeowners will get their money all at once and all be clamoring to have their houses built all at the same time. Materials, labour, consultants will all be in short supply, and that's not considering the effects of regional inflation. I think it'll be chaos. If you think the crime up there is bad now, just wait till all those billions of insurance money is paid out! The old system, as it was in Chch, with bulk insurers and big PMO's, wasn't perfect, but it kept a lid on things and there was a degree of order.
Certified Passive House & Project Management | Certified Passive House Tradesperson | Chartered Construction Manager | Chartered Building Engineer | Vegan On my te reo Māori journey [Ara Level 2 2024]
2 年The insurance policies, when reacting, more often than not require reinstatement of the damage to a standard higher than that required by the Building Act. Unless the building is structurally unstable or unsanitary, despite degradation, there is no obligation to carry out any ‘building work’. If ‘building work’ is carried out, all work must be compliant with the Building Act. There is a performance based code and within Structure B1, perhaps the most powerful sections when discussing loss or degraded performance and why a policy must react and reinstate that degraded performance is below. The Building Act is quite a beautiful bit of legislation but I don’t think many actually understand how it should work. ‘Betterment’ is only an insurance policy word but by nature of the need for all work to be compliant, the ‘betterment’ occurs naturally…. unless we’re talking about swapping out chrome taps for gold plated ones.
Experienced Window Industry Executive at Technoform
2 年Insurers will not cover "betterment" so those who do have insurance may find the payout needs a top up to allow replacing with a home that meets the latest revisions to the building code. What people should also be thinking about is, after I have my payout will the Insurance Companies insure me. The building may not be insurable if built in the same place or the new doesn't include significant steps to mitigate future loss. One glaring issue is forestry slash turned flood waters into a flow of debris with tons of energy (and waste material). Bridges failed because they weren't designed to take the restraining load of a dam. The cleanup of mud, silt and logs is far more costly than just water. Grape vines could probably survive a water flood that quickly dispersed, but deep mud and silt will destroy the vines. Build back better, yes. More importantly we have to stop industry continuing BAU without consequences. In fact Forestry need to remediate their forests so the next Cyclone (there will be more) isn't so damaging.
Principal Consultant @ Schema Consulting Limited | BEng (Hons) MEngNZ
2 年Helpful analysis. What about housing that has been shown to be flood prone now? Would bringing it up to current code mean denying some repair with because you'd never get a consent to build there now..? Does it mean measures such as raising houses on piles above expected flood levels? Anecdote from a relation in Australia: A two storey house was flooded and raised 2m on stilts. In the next floods a year or two later, it was again flooded to the top storey... Where does it stop?
Brand Ambassador at Brand Spanking/ Phenomenon
2 年Hi house. We will get there. Almost finished