Winners and Losers: Building Regulations (Amendment) Regulation 2014 (SI.9 of 2014)
by bregs blog admin team
There has been a lot of fractious debate and arguments particularly in the professions regarding SI.9. The Minister has signed the regulation in the face of repeated calls for postponement from key stakeholders involved in the creation of the regulation. The Department also disregarded consumer representations from the likes of pyrite owners and Priory Hall residents, the two poster children in the campaign to introduce the regulations. Now as the dust is settling and before our Minister heads for Europe let’s look at the people left behind, the winners and losers of Building Regulations (Amendment) Regulation 2014 (SI.9 of 2014).
1. Consumer: There is an extra cost per house of possibly up to €15,000 for professional fees (RIAI estimated 156- 200 hours minimum per house for certifier roles) excluding additional duties from contractors with little or no consumer benefit. This excludes the cost of “defensive” specifications which industry estimates at an additional 5% on top of construction cost also. The construction industry is still unregulated and relies on a reinforced system of self-regulation. Like pyrite affected owners consumers will still be left to seek redress in the high court after faults discovered. No improvement in technical standards, no improvement in consumer protection. Definite losers here.
2. Professionals: Engineers, surveyors and Architects (not Architectural Technicians) can enjoy greater paperwork and fees from most projects. At a price as regulations carry “untenable liability” for professionals who want to undertake these roles and write guarantees for others work. There may be risks of not being able to obtain professional insurance later on. There have been a number of very detailed and alarming senior council opinions on various drafts of SI.9 (previously SI.80)- see Matheson Solicitors summary advice letter of 12th December below. So more fees and more liability with increased insurance costs. On balance neutral.
3. Legal profession: Not really mentioned to date but there was a recent conference of newly founded Construction Bar Association in November 2013 discussing opportunities that the upcoming legislation would be offering. The “extraordinarily loose and vague” language in the regulations may need to be clarified in court, so expect more high court cases involving building surveyors, engineers, architects and consumers in the next few years. See MrDenis McDonald SC legal advice of 4th December below. Increased volume of construction high-court cases makes the legal profession definite winners.
4. Contractors: Still no mandatory register for contractors so status quo here. As SI9 now requires all work to be certified by the principal of a building firm self-builders will no longer be able to manage qualifying projects on site from March 1st onwards. Based on industry estimates contractors will now have an extra 1,200 houses on their books. For a typical €200k house the contractor’s management fees and charges could be in the region of 12% of the construction cost or €24k. No mandatory register and nearly €240m in additional turnover with €28m profit- top of winners section here.
5. Self-builder/farmers/ consumers: A silent majority self-builders account for over 60% of all homes completed in any year. As self-builders now need to employ a contractor as well as additional certifiers under SI9 they have to fork out up to €40,000 per typical house for the privilege. Over 22% extra on top of the construction cost. Every farmer who planned to build a house on his/her land for their children will be affected. Farmers building most agricultural buildings, even those only for storage of machinery, will find most works qualify under SI.9. Despite numerous Ministerial assurances to the contrary, self-building is “problematic” due to a lack of willing certifiers. Recent Law Society guidance recommends professionals not to certify self-build projects. IAOSB estimate 30% of all self-builds will be abandoned in an average year. Self-builders are no question the biggest losers.
6. Political cost: hard to estimate. Consumers in general may gradually see no improvement with more scandals like Priory Hall and Pyrite hitting the papers in years to come. More insurance companies will contest claims, more consumers left hanging out to dry trudging through the high court with no guarantee of success. However a large cohort, self builders, will feel the sharp end of SI9 this year and every year following. That’s thousands of votes, plus partners & families every year. Looks like business as usual wins the day again.
The above opinion piece was originally submitted by Maoilíosa Mel Reynolds on 27th January 2014- updated on 21st April 2014.