Legal perspective: consumer benefit? BC(A)R SI.9
by Bregs Blog admin team
This is a guest post submitted on 14th March 2014 for the blog to put slides delivered at the Engineers Ireland CPD event of January 2014 in context by DEIRDRE NÍ FHLOINN, Consultant, Reddy Charlton, Solicitors. Guest post to follow:
I was recently asked to address a CPD event organised by Engineers Ireland on the subject of the Building Control (Amendment) Regulations 2014 (BCAR 2014), with a particular focus on the consumer perspective.
I considered in that respect whether the Regulations created any new rights for consumers.
When publishing the 2013 Regulations in April 2013, the Minister characterised the Regulations as a rolling set of guarantees
BCAR 2014 has been described by various commentators, and in the media, as being intended to deal with major building failures such as that which occurred at the Priory Hall development in Dublin.
The residents at Priory Hall had two enormous problems. The first was that the building was defective and uninhabitable. The second was that the builder did not rectify those defects, with the result that the residents were left facing the cost of repairing the defects themselves. The new systems introduced by BCAR 2014 may go some way to preventing the first problem from arising on another development, but do not deal with the second problem.
There are no new legal rights or remedies for consumers created by BCAR 2014. Rather, the benefits to consumers are intended to result from improvements in the building process, such as the requirement for an assigned certifier to devise and implement an inspection plan.
The usual contract structure for purchase of a new house or apartment is that the purchaser will into a site transfer agreement with the landowner, and a separate building contract with a builder. If a defect arises, the primary route for recovering the cost of repairing that defect should be the building contract. However, homeowners face a number of hurdles in this respect.
The standard Law Society building contract is signed under hand, with a limitation period for actions of 6 years from the date of the breach, rather than 6 years from the date of discovery of the breach. In addition, there is a restriction on assignment of building contracts without the builders consent. Most purchasers buying a house or apartment less than 6 years old will not insist on receiving an assignment of the building contract in their favour, and thus have no remedy in contract if a defect emerges.
Even assuming that the homeowner does have a contract with the builder, the homeowner will need to prove that there was a breach of that contract and that the defect resulted from that breach. The homeowner may have little in the way of documentation in order to prove this. One significant development from BCAR 2014 is that the volume of documentation available from the Register (or via the Freedom of Information legislation) should improve the position of litigants in this respect.
Without a contract, the second purchaser can only rely on the law of tort, which generally does not allow recovery of the cost of repairing a defective building against a builder. The position in tort as against professionals involved in the building process is different, and does allow recovery of the cost of repairing a defective building where there is a relationship of reliance and proximity between the parties.
The homeowner is in a vastly different position to an employer procuring, say, an office building; the homeowner appoints no architect or client representative to monitor the build or to carry out inspections.
The only party (other than a certifier appointed under BCAR 2014) that is legally entitled to carry out inspections during the construction of a residential development is the Building Control Authority, which has extensive powers of inspection and enforcement under the Building Control Act 1990. Building Control Authorities are protected from civil liability for the cost of rectifying buildings that not comply with the Building Regulations by s. 6 (4) and s .21 of the Building Control Act 1990, and via a line of caselaw from the UK that is reflected in those provisions. The legislation grants powers to BCAs rather than assigning duties to them.
The result is that the party with the most power to intervene in the building process has no financial interest in the outcome, and the party that will ultimately carry the financial risk of a failure to comply with the Building Regulations, the purchaser, has little ability to influence the building process.
A coherent and predictable system of compensation for consumers must take the existing legal environment as its starting point in order to provide a meaningful, accessible financial remedy in the event that defects emerge in dwellings. Defects insurance should support that legal remedy. This is particularly important in light of the recent calls from the ESRI and elsewhere about the number of new dwellings required to meet demand in the coming years.
Deirdre Ni Fhloinn is specialist construction lawyer and consultant at Reddy Charlton Solicitors. This post is a general commentary on certain issues arising from the Building Control (Amendment) Regulations 2014 and should not be relied upon as legal advice.
Link to: “Building Control (Amendment) Regulations 2013 Legal issues – compliance and the consumer perspective Engineers Ireland 17 January 2014” CPD presentation: