In this interesting article in “Public Affairs Ireland Journal” from July 2014, two opposing perspectives on the new Regulations are discussed.
In “Two sides of the coin” Building Control (Amendment) Regulation 2014” solicitors Jarleth Heneghan and Cassandra Byrne say the new regulations introduced in March 2014 will lead to better quality buildings and value for the future. Eoin O’Cofaigh, architect, contends that they lack adequate consumer protection. Extract of article to follow:
“Two Sides of the Coin” –
Building Control (Amendment) Regulations 2014
Jarleth Heneghan and Cassandra Byrne say that the new building control regulations introduced on March 1 2014 will lead to better quality buildings and value for the future. Eoin O’Cofaigh contends that they lack adequate consumer protection.
Building the Future
The new building control legislation has the potential to profoundly change the construction and projects industry in Ireland. It aims to set Ireland on the pathway to an improved building control culture with an increased focus on compliance and regulation. Jarleth Heneghan and Cassandra Byrne outline the changes that the new legislation introduces, and discuss its long term result of better quality and compliant buildings for the future.
The Building Control (Amendment) Regulations 2014 (the “Regulations”) came into effect on 1 March 2014 affecting both public and private sector projects. This followed on from concerns arising from high profile industry cases ranging from contractor insolvencies, defects and fire safety breaches throughout recent years, such as the much publicised Priory Hall development. Much of this has been attributed to below standard adherence to building control across the board, from design to supply of materials and works practices. This highlighted the real need for a more robust building control regime and increased levels of professionals and contractor accountability from the outset to completion of works.
Following a long period of consultation with industry stakeholders, the Department of the Environment, Community and Local Government (the “Department”) published the Building Control (Amendment) Regulations 2014 (SI No 9 of 2014) (the “Regulations”) together with a statutory Code of Practice (the “Code”). The Code aims to provide additional guidance on application of the Regulations. Compliance with the Code will, prima facie, be taken as compliance with the Regulations.
The Regulations are to be read in conjunction with existing building control legislation. The primary purpose of the existing legal framework pursuant to the Building Control Acts 1990 to 2007, the Building Regulations and Building Control Regulations, is to provide for the health, safety and welfare of people in the context of construction and design.
If a valid Commencement Notice is received on or after 1 March 2014 the new building control regime (as introduced by the Regulations) will apply.
Previous Building Control Regime
Prior to 1 March 2014 there was an obligation to obtain Opinions on Compliance with Building Regulations (and Planning Permission) in respect of all works for new buildings or material alterations/extensions/change of use – typically where a fire certificate is required. These have been required to demonstrate good and marketable title for conveyancing and due diligence purposes. However a key feature to note here is that these are Opinions, rather than Certificates. Typically other than Fire Safety Certificates and Disability Access Certificates, Ireland did not have an approval regime – akin to self-certification. These requirements will remain applicable.
Key Individuals: Who’s Who?
There are various new roles identified in the Regulations. The Owner has primary and legal responsibility for the Building. The Builder is appointed to build and supervise the works. The Design Certifier is responsible for designing works, compiling plans and specifications and inspects where appropriate. The Assigned Certifier is a new professional role responsible for jointly certifying compliance with the Regulations and implementing the inspection plan. Ancillary Certifiers include other consultants and specialist designers/sub-contractors. The Building Control Authority maintains the register, procures the validation as well as carrying out risk inspections.
There are four new types of mandatory certificates (in prescribed form) to be completed. It is intended that the new mandatory certification will ensure greater transparency and accountability.
Commencement Notice and 7 Day Notice
The form of Commencement Notice/7 Day Notice have been updated. Significant changes have also been made to documentation to be submitted with apply where the works comprise:
• design and construction of a new dwelling,
• extension to a dwelling involving a total floor area greater than 40 square metres,
• works to which Part III of the Building Control Regulations 1997 to 2014 applies.
In such cases, the Commencement Notice and the 7 Day notice must now be accompanied by:
• Outline Plans and Documentation – to outline how the proposed works or building complies with requirements of the Building Regulations.
• Certificate of Compliance (Design) – A certificate (in prescribed form) to be completed by design professionals (the “Design Certifier”), confirming that:
•it has been commissioned by the Owner to design, in conjunction with others, the building or works and inspect as appropriate;
•it is competent to carry out the design and coordinate design of others; and
•plans and other documents have been prepared by it and other design professionals (exercising reasonable skill, care and diligence) to demonstrate compliance with the Building Regulations.
• Notice of Assignment of person to inspect and certify works – signed by Owner.
• Certificate of Compliance (Undertaking by Assigned Certifier) – a certificate (in prescribed form) is to be signed by the Assigned Certifier, such as a chartered engineer, registered architect or chartered surveyor. They undertake to use reasonable skill, care and diligence. They should be appointed early to plan inspection and contribute meaningfully to design management. The Assigned Certifier may require specialists for ancillary certificates.
• Preliminary Inspection Plan (including the Inspection Notification Framework).
• Notice of Assignment of Builder – signed by the Owner expertise to carry out works.
• Certificate of Compliance (Undertaking by Builder) – a certificate (in prescribed form) to be completed by the Builder confirming that it has been commissioned by the Owner to build and supervise the works and that it is competent to do so. Builders must also undertake to:
•construct the works in accordance with plans and other documents detailed in the Commencement Notice/7 Day Notice;
•cooperate with inspections carried out pursuant to the inspection plan; and
•certify the works comply with the Building Regulations.
Builders should also be mindful of obtaining necessary ancillary certificates. Currently there is no mandatory registration system for Builders (although on the horizon). A voluntary register has been set up. The aim is to reduce unqualified individuals passing themselves as having requisite expertise.
There is an onus on Owners to establish that Designers, Builders and Assigned Certifiers are competent. They should have regard to the task they are required to perform taking account of the size and/or complexity of the project or works. Certifiers must possess sufficient training, experience and knowledge appropriate to the nature of work to be undertaken and registration will assist here.
Certificate of Compliance on Completion
Now, before works or buildings (to which the Regulations apply) can be opened, occupied or used, a validly completed Certificate of Compliance on Completion is required to be validated and registered on the statutory register maintained by the relevant building control authority.
This mandatory Certificate of Compliance on Completion must be signed by the Builder and the Assigned Certifier. It should be accompanied by such plans and other documents outlining how the completed works or building differ from earlier submission and how it complies with the Building Regulations; and the Inspection Plan as implemented. Again this illustrates the continued focus on compliance from design stage to works completion.
Validation and Registration
The Regulations include mandatory and discretionary timelines within which the building control authority must respond as to validity or invalidity of a Certificate of Compliance on Completion. There is automatic inclusion on the Register where no queries are raised within 21 days.
Building Control Management System
The Regulations introduce electronic filing through a Building Control Management System as the preferred means of building control administration. It will also facilitate building control resources to be applied with more effective focus. It should prove easier access to building control information and increased traceability. It will operate via www.localgov.ie and building control authority websites. By May 2014 over 2,000 registered construction professionals had set up accounts.
Failure to comply with the Regulations is an offence which may result in the imposition of fines and/or imprisonment, together with potential liability in contract and/or tort. All involved in the process will need to be mindful on how to best manage their liability.
Increased responsibilities under the Regulations are likely to necessitate additional insurances in certain circumstances, such as professional indemnity (PI) insurance. The CWMF (Capital Works Management Framework) for public sector construction contracts has issued Guidance in this area and suggested levels. A new development is the maintenance of PI insurance by contractors, particularly on all public works from 1 January 2015. This represents a greater layer of insurance protection for Owners, Designers, Builders and end users in relation to the design and construction of building and while it may have outlay implications this is offset by the protection across the chain of responsibility.
The details and nuances of Regulations will need time to bed down, be further refined and should be supplemented by training to get the best results. Increased efficiency in document management will hopefully allow building control authority resources to better focused on the management of the process and greater transparency for end users. The new roles and increased responsibilities for all industry stakeholders, including in the public sector, aim to provide greater quality assurance. All involved in the process will need to seek advice on how their obligations and liabilities are best managed. Contracts will need to be updated to reflect the changes and best address the requirements of the Regulations going forward. All of this should contribute to an improved culture of building control practices and greater protection and value for the future.
Jarleth Heneghan is a Partner in William Fry’s Projects and Construction Department and leading construction and projects solicitor. He advises on contentious and non-contentious matters for clients on construction procurement, PPP and infrastructure. He is experienced in litigation and arbitration and other alternative means of dispute resolution and rescue financing. Jarleth is a chartered surveyor (FRICS, FSCSI) and is a Fellow of the Chartered Institute of Arbitrators (FCIArb), MCIOB.
Cassandra Byrne is a Senior Associate in William Fry’s Projects and Construction Department. She advises on construction projects and PPP matters. She also advises on projects public procurement, engineering and construction litigation and forms of ADR including domestic and international arbitration, mediation, conciliation and related rescue financing. Cassandra is a Fellow of the Chartered Institute of Arbitrators (FCIArb). She publishes extensively on construction.
Failing to Protect the Consumer
The new building control regulations aim to improve the culture of building control in Ireland with a focus on care and safety. However, Eoin O’Cofaigh argues that these regulations are flawed and that they fail the consumer. He proposes a system which he believes would provide consumers with the protection needed.
The building regulations were introduced in 1991 after the ‘Stardust disaster’, which did much to raise building standards. But construction regulation in Ireland is reactive, and in 1992 and repeatedly afterwards, architects – among others – called for better enforcement of the regulations. Despite Ministerial promises, this never effectively happened. The €30.75 per house Commencement Notice fee charged in 1991 today stands at … €30. It took the pyrites and Priory Hall disasters to introduce the next round of changes. An Irish solution to an Irish problem:- “When there’s a problem with enforcing a law: change the law.”
The 2014 regulations took effect from 1 March. They respond primarily to disasters in the speculative residential sector and have the laudable goal of improved consumer protection. However, they affect not only residential, but all projects requiring a fire safety certificate. This includes almost every new-build project, many non-residential extensions, and internal fit-outs or alterations of schools, shopping centres and other buildings.
Furthermore, the regulations are not adapted to different forms of construction project procurement. One single “Assigned Certifier” certifies compliance with building regulations for the entire construction. The regulations do not allow for parallel main contractors, or shell-and-core and subsequent fit-out contracts, for example.
What’s wrong with the Building Control (Amendment) Regulations?
The Building Control (Amendment) Regulations 2014 impact on every significant building and interior fit-out project and not just on the speculative residential sector where the problems started. By restricting the persons who the building owner may appoint as Design Certifier and as Assigned Certifier to registered architects and surveyors, and chartered engineers, most of whom work outside construction, the regulations confer de facto control over the majority of building design in Ireland on these groups.
Certificates are required in return confirming that everything designed and built complies in every detail with the building regulations, and places the certifier between the house buyer and the builder. However, the regulations exclude experienced architectural technologists from earning a livelihood in this field any longer.
By requiring a competent builder to be appointed, the centuries old tradition of ‘self-build’ in rural areas is stopped, a tradition still flourishing elsewhere, including the UK. Nothing is done for a new house buyer except the setting up of a paper trail to follow in the event of building failure. They distance the local authority building control inspectors from the practicalities of the entire process. They fail to implement all relevant recommendations of the Pyrite Panel report. They expose FDI intellectual property to internet theft. Furthermore, they introduce two key gateways to every project: a Commencement Certificate and a Completion Certificate, which the local authority can reject as invalid, putting the opening of new projects at risk.
The New Regulations and Pyrites
The Pyrite Panel, set up to examine the ‘pyrite problem’ and to recommend how to avoid that problem in the future, reported in June 2012. While the Priory Hall and pyrite scandals differ, they both impacted most on dwellings built for sale, and were the genesis for the 2014 regulations. The regulations fail to implement relevant recommendations in the Pyrite Panel Report, while those same recommendations will be as important in preventing future Priory Halls as they are to addressing the problem of pyrites.
Recommendation 18, a ‘Mandatory certification system’ recommends that “the system of independent inspections, carried out by the building control officers, should be strengthened to complement the mandatory certification process for buildings”. No provision is made in the regulations for strengthening the system of independent inspections by building control officers to complement the mandatory certification process. For the Pyrite Panel, these recommendations complemented each other; and for Priory Hall residents, independent inspections by building control officers might have made all the difference. These recommendations are complementary because an architect cannot enforce good building on a greedy developer, or on an incompetent contractor, perhaps not selected by the architect in the first place. The entire construction contract system gives the architect power only where the architect administers the contract. In developer-led projects, the architect has no financial power. To make the architect responsible will create a “blame trail” but will not improve standards where good building is most needed. To get building regulations compliance, there must be the reasonable likelihood of statutory-backed inspection backed by the building control authority.
Recommendation 21: General Insurance issues, recommended (b) “a requirement for project-related insurance whereby cover for each specific project is available and adequate and is related to the project only”. The regulations should have been written to implement this recommendation, by requiring evidence of project-related insurance at the time of commencing the works. Even if mandatory latent defects insurance is unnecessary on every project, it should be implemented in projects involving dwellings for sale. By not implementing this recommendation, the regulations ensure litigation and distress for home-owners will continue to feature where buildings go wrong.
What should be done?
The Building Control (Amendment) Regulations 2014 (S.I. 9 of 2014) should be scrapped. In its present form it impacts unnecessarily on all sectors of construction, imposes unnecessary cost and hugely complex paperwork, and achieves nothing except monopoly conferral on a small number of construction sector actors in return for unacceptable levels of liability. A system of independent third-party inspection, by experienced architects and engineers paid for by the developer but licensed by and answerable to the local authority, would achieve better results. It would level the field for the self-builders; allow experienced technologists to participate; guarantee local authority-backed inspection of 100% of building sites; solve the intellectual property issues; and cost about €2m per year, being paid for by the developer and through increased Commencement Notice fees. To see such a system, take the boat to Holyhead.
The principles behind a better system
•In 2012, submissions by non-construction sector stakeholders (NCA) and the Pyrites Panel said that an inspection system independent of the designer and the contractor is needed.
•There is wide consensus across consumer organizations, supported by World Bank and European Consortium of Building Control studies, that self-certification as in S.I. 9 will not work, particularly for speculative residential development. It does not work in any other sector of the Irish economy.
•The unintended consequences for non-residential projects, especially complex projects and FDI projects, are such that the system unnecessarily increases costs and uncertainty.
•The State should not primarily be liable for the cost of building control nor should it be liable for defects in construction.
•Simple measures to improve and sustain design and construction are what is required, particularly in speculative residential development, backed by compulsory latent defects insurance to guarantee redress in the case of the small number of residual defects, or in the case of financial failure of a development or construction company.
I propose to replace the regulations with a new statutory instrument along the following lines:
•Set up a register of “Approved Inspectors”, answerable to the building control authority. This register would be open to architects, architectural technologists, appropriately qualified engineers and building surveyors with adequate experience. Admission should be competency-based with knowledge of building regulations and building construction. Inspectors would carry appropriate professional indemnity insurance.
•The system would initially apply in the speculative residential sector and to the one-off house. The Inspector audits the design and inspects the construction works for compliance with building regulations. Inspection of designs would include Parts B and M for one-off houses. Pending review, fire safety and disability access certificates would still be required for apartments.
•The Design Team would prepare designs and inspect the works as done at present. The contractor builds in compliance with the building regulations as is routine. The Inspector reports to the local authority at the start and completion of construction, confirming that he has inspected the design and construction and found nothing wrong.
•If the Inspector finds non-compliant design, he refuses a design certificate until he has been given amended design drawings. Given that the architect will have to explain any delays to his client, the architect will have to make sure the designs are right in the first place. This raisesdesign standards. If the Inspector finds non-compliant construction, he tells the contractor and the architect, and has the ultimate sanction of a “Cease Works Notice”. He will refuse a completion certificate until the matter is put right.
•The Inspector inspects all designs and sites. On top of this, the building control authority profiles risk, and inspects a small number of designs and building works as indicated by its risk analysis to ensure that the system is working. If the Inspector is negligent, he can be struck off the register and be sued. Latent Defects Insurance, paid for by the developer with a one-off up-front payment, picks up any defects which get past.
Approved inspectors, independent company auditors, and the UK
A developer wants to build a building. The Approved Inspector operates independently of the contract administrator (Architect or Engineer) and has statutory authority. The Inspector inspects the design and the construction and signs off on them. The designs are lodged at the Building Control Authority. The Inspector is paid for by the developer, and is answerable to the Building Control Authority. The architect, engineer and builder have the complex task of designing and building the building; the Inspector’s task is to focus exclusively on building regulations compliance.
This Approved Inspector system resembles the “Approved Inspector option” in the building control system in England and Wales. The system is also the same as that in Northern Ireland except that there, the Approved Inspector, answerable to the local authority, substitutes for the N.I. building inspector in local authority employment.
Why is this system better than that in S.I. 9?
(i) Better for the State
The system will deliver better design and construction, not just better paperwork. The cost to the State is minimal since the developer pays the Approved Inspector. The only cost to the State is to maintain the register and monitor the operation of the system. This can be funded by raising the Commencement Notice fee.
The learning experience for a young architect of having their designs audited by an experienced architect or engineer will be immensely fruitful and drive better design standards. Contractors will also learn by having an experienced Inspector arrive on site, who will be concerned with nothing except building regulations compliance, with local authority backing. This system gives the State an additional layer of protection since the Inspector with annually renewed professional indemnity insurance stands between the building defect and the exchequer.
The system can solve problems around experienced technologists whose livelihoods are undermined by S.I. 9. The system also solves the self-builder issue. He receives a straightforward independent inspection system which he pays for. If his designs are good enough, they pass. If not, he must prepare an adequate design. If his building is good enough when the Inspector arrives, he can continue with his plans. If not, he must rectify the defects just as anybody else would.
The system solves the FDI issue by allowing the technologically advanced (example:- Intel) FDI project proceed under self-certification. It does not requires any change to construction contracts, which have still not been sorted, and hence it will not cause construction sector delays.
(ii) Better for the Consumer
Per the submission of the National Consumer Authority, this system will give better results than a system of self-certification. The consumer is protected from loss with a no-fault system of redress and no litigation is needed. The person who buys or rents a new home gets independent third-party audit by experienced professionals, answerable to the local authority.
(iii) Better for the Construction Sector
It will drive higher standards in the construction sector through dedicated experienced inspectors who with larger and recurring workloads will feed back into better design and better building. Through feedback to the local authorities of the inspectors’ experience across many designs and sites, systemic problems will be spotted earlier.
A system as outlined above can be set up quickly. It involves no major change in existing contractual and legal structures. It needs no primary legislation: the Building Control Act already provides for the designation of such persons to act in this capacity. Such a system will have the support of the consumer organisations and the public.
Eoin O’Cofaigh has 30 years’ experience of architectural practice in Ireland. He was President of the RIAI in 1998-1999 and of the Architects’ Council of Europe in 2000. He contributes the section on “Building Control” in the publication “Construction Projects: Law and Practice”. After 12 years’ absence, he was re-elected to the RIAI Council last January.
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