mbie chc residents 21 06 13

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Christchurch 20 June 2013. Meeting with MBIE and Christchurch Residents groups. Attendees Hugo Kristinsson MBIE representatives Adrian Cowie Malcolm MacMillan, Earthquake Recovery Operations Manager Sarah Miles Peter Sparrow, Manager Building System Performance Sarah O'Brien Steve Garner, Senior Advisor Earthquake Response Emma Magnusdottir John Sullivan on behalf of Community Law. Suggested changes to the Building Act 2004 27/07/10. The ministry expresses concerns over consumer vulnerability. We refer to Building Act review 2: Delivering accountability in the residential construction sector Office of the Minister of Building and Construction by Hon Maurice Williamson 27/07/2010 In these recommendations for changes of the Building Act the following is identified. "Residential consumers are vulnerable they rarely commission building work, and they have limited knowledge of the associated risks and the options for managing these." Many consumers are unaware of legal warranties required under the Act. "Improvement required for Consumers to hold contractors Accountable" Research carried out for the Department of Building and Housing in 2010 found that among a large, representative sample of consumers who had purchased significant building work in 2005 (valued at over $50,000 and for which a building consent was needed): • 31% had a disagreement with their building contractor • 19% had a major dispute Major disputes often had more than one cause, and causes included: • timelines not being met (37% of those with a major dispute) • noncompletion of the project (33% of those with a major dispute) • noncompliant or defective work (56% of those with a major dispute) • poor workmanship (55% of those with a major dispute)

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Meeting with MBIE and Christchurch residents 21 06 13

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Page 1: Mbie chc residents 21 06 13

Christchurch  20  June  2013.  Meeting  with  MBIE  and  Christchurch  Residents  groups.  

Attendees    

Hugo  Kristinsson       MBIE  representatives  

Adrian  Cowie     Malcolm  MacMillan,  Earthquake  Recovery  Operations  Manager  

Sarah  Miles       Peter  Sparrow,  Manager  Building  System  Performance  

Sarah  O'Brien       Steve  Garner,  Senior  Advisor  Earthquake  Response  

Emma  Magnusdottir  

John  Sullivan  on  behalf  of  Community  Law.  

 Suggested  changes  to  the  Building  Act  2004  27/07/10.  The  ministry  expresses  concerns  over  consumer  vulnerability.  We  refer  to    Building  Act  review  2:  Delivering  accountability  in  the  residential  construction  sector  Office  of  the  Minister  of  Building  and  Construction  

by  Hon  Maurice  Williamson  27/07/2010    In  these  recommendations  for  changes  of  the  Building  Act  the  following  is  identified.  "Residential  consumers  are  vulnerable  -­‐they  rarely  commission  building  work,  and  they  have  limited  knowledge  of  the  associated  risks  and  the  options  for  managing  these."  Many  consumers  are  unaware  of  legal  warranties  required  under  the  Act.  

 "Improvement  required  for  Consumers  to  hold  contractors  Accountable"  Research  carried  out  for  the  Department  of  Building  and  Housing  in  2010  found  that  among  a  large,  representative  sample  of  consumers  who  had  purchased  significant  building  work  in  2005  (valued  at  over  $50,000  and  for  which  a  building  consent  was  needed):  

•  31%  had  a  disagreement  with  their  building  contractor  •  19%  had  a  major  dispute  Major  disputes  often  had  more  than  one  cause,  and  causes  included:  •  timelines  not  being  met  (37%  of  those  with  a  major  dispute)  •  non-­‐completion  of  the  project  (33%  of  those  with  a  major  dispute)  •  non-­‐compliant  or  defective  work  (56%  of  those  with  a  major  dispute)  

•  poor  workmanship  (55%  of  those  with  a  major  dispute)  

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 Consultation  on  the  Building  Act  review  proposals  indicated  that  there  are  three  significant  gaps  in  the  services  currently  available  to  assist  consumers  to  resolve  a  

building  dispute:  •  a  central  source  of  advice  on  dispute  resolution  options  •  an  'early  intervention'  service  to  help  parties  to  resolve  any  disagreement                  as  early  as  possible  through  negotiation  or  mediation  •  a  fast  and  cost-­‐effective  adjudication  service  which  people  are  aware  of          and  which  is  clearly  available  for  general  residential  building  disputes.  

 The  post  earthquake  modifications  of  the  Building  Act  contradict  all  these  recommendations  above  and  make  the  problems  identified  colossally  worse.    

No  consideration  is  given  to  the  Consumer  Guarantees  Act  and  the  Fair  Trading  Act  that  are  the  cornerstones  of  our  society.    What  legislation  gives  MBIE  the  right  to  ignore  the  requirements  of  The  Consumer  Guarantees  Act  and  the  Fair  Trading  Act  and  change  building  requirements  after  the  residents  have  suffered  earthquake  damage  to  their  homes?  

 EQC  and  insurance  companies  have  claimed  for  the  residents’  losses  and  by  lowering  the  standards  set  in  the  Building  Act,  thousands  of  vulnerable  residents  are  at  a  grave  risk  of  receiving  substandard  repairs  resulting  in  substantial  transfer  of  equity.    Another  part  of  this  equation  is  the  proposed  Consumer  Law  Reform  Bill  287-­‐2  The  changes  proposed  in  this  bill  appear  to  be  for  the  purpose  of  protecting  insurance  companies  from  the  consumers.  That  contradicts  the  purpose  of  the  Act  and  appears  to  be  against  good  conscience.  We  request  an  immediate  amendment  of  this  proposed  bill  to  correct  this  or  a  cancellation  of  the  bill.    

   

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In  Conclusion    

1. Which  of  the  post  earthquake  changes  of  the  Building  act  address  the  problems  identified  in  the  proposed  improvements  by  Maurice  Williamson  27/07/2010  

2. Which  of  the  post  earthquake  changes  make  the  identified  problems  worse?  3. How  do  the  post  earthquake  changes  address  the  vulnerability  of  residents?  4. What  legislation  gives  MBIE  the  right  to  ignore  the  requirements  of  The  

Consumer  Guarantees  Act  and  the  Fair  Trading  Act  and  lower  the  standard  of  

building  requirements  after  the  residents  have  suffered  earthquake  damage  to  their  homes?  

5. Whose  interest  is  being  protected  by  the  following  proposed  change  of  the  Consumer  Guarantees  Act?    

Clause  26A:  new  section  46L    

In  clause  26A,  after  new  section  46L(3)  (after  line  22  on  page  68),  insert:  

“(4)  However,  in  relation  to  insurance  contracts  only,  for  the  purposes  of  subsection  (1)(b),  a  term  in  an  insurance  contract  may  be  treated  as  being  reasonably  necessary  in  order  to  protect  the  legitimate  interests  of  the  insurer  if  the  term  relates  to  the  underwriting  risk  accepted  by  the  insurer.  

 We  request  a  response  in  writing  before  the  28th  of  June  2013      

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Fair Trading ActThe Fair Trading Act makes it illegal for traders to mislead consumers, give them false information, or use unfair tradingpractices. Information on the Act and what it means for you as a consumer.

The Fair trading Act: the basicsThe Fair Trading Act makes it illegal for traders to mislead consumers, give them false information, or use unfair tradingpractices.

The Act applies to advertising and selling of goods and services by traders.

The Act applies to services, new and second-hand goods, auctions and commercial sales. But it doesn’t cover private sales, forexample, buying something off your neighbour, or at a garage sale.

Your rights under the Fair Trading Act

Misleading behaviourA trader is misleading you if they lead you to think something is true when it isn’t. Examples of misleading behaviour:

An advertisement says a jumper is made from angora wool, when it is only 10% angora, 90% synthetic.

A shop which sells new TVs sells you a TV without telling you it is second-hand.

A job advertisement turns out to be an employment agency looking for new clients.

You tell a mobile phone salesperson that you are looking forward to using wireless internet on the mobile phone, but he doesn’ttell you that the mobile phone doesn’t have that function.

False informationA trader is giving you false information if they give you the wrong information about goods or services, or about your legalrights. Examples of false information:

The price is different than was advertised or on the sticker price.

A product labelled “Made in New Zealand” was actually made somewhere else.

A trader tells you that the store doesn’t give refunds under any circumstances.

You are offered a free gift for buying a certain item but the cost of the item being sold is inflated to cover part or all of the costof the ‘gift’.

Unfair trading practicesA trader is using an unfair trading practice if they use one of these methods:

Offering prizes without any intention of giving out a prize, or the prize is different to what was advertised.

Advertising an item really cheaply to get people into the store, but only having a very small number to sell.

Selling you a business or franchise with false claims about how much you can earn.

Pyramid selling schemes – a selling scheme where most of the money comes from joining more people up to the scheme, ratherthan from sales.

Demanding or accepting money when the trader has no intention of supplying the goods or services, or doesn’t intend to supplythem on time, or doesn’t intend to supply the same goods or services that were order

Solving a problem under the Fair Trading Act

What can I do if I have been misled, or received false information?If you have been mislead you can go back to the trader to try and resolve the problem. If you can show a trader has breached theFair Trading Act and this breach has caused you loss, you can go to the Disputes Tribunal to make a claim.

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For example, you buy a product which claims to cure baldness, after using it for some time, you remain bald as a snooker ball.You talk to your doctor and she tells you that this type of product cannot “cure” baldness. You could claim back the money youpaid in the Disputes Tribunal.

What are my rights if a shop advertises something at the wrong price?Although the shop has probably breached the Fair Trading Act, the only loss or damage you have suffered is a wasted trip to theshop. You can ask them to compensate you for this, but you cannot force the shop to sell you the goods at the advertised price.

What if I want to make a complaint?If you believe a trader has breached the Fair Trading Act you can let the Commerce Commission know. The CommerceCommission does not act on behalf of individuals but is does investigate fair trading issues. The Commerce Commissionenforces the Fair Trading Act and investigates issues according to set criteria. The Commerce Commission can apply for a courtorder to stop the offending and it can prosecute the trader.

Call 0800 94 3600

Product safety under the Fair Trading ActThe Minister of Consumer Affairs can recall an unsafe product under the Fair Trading Act. The Act also covers product safetystandards. It is illegal for traders to sell products that don’t meet theses standards.

Last updated 16 June 2010Related content

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Guarantees for services

Services must be provided with reasonable care and skillThis generally means that any work done for you must be at least as good as the work of a competent person with average skillsand experience in the type of work required.

Services must fit for the purposeAfter you have told the service provider what service you want from them, and they accept the job, they must make sure you getwhat you want.

Example: if you let the hairdresser know that you want your hair dyed a particular colour and they agree to do it, theymust give you hair of that colour.

However, there may be situations where it would not be appropriate to rely on discussions with a supplier.

Example: it may not be reasonable to expect a receptionist in a large service company to know enough about theservices to be able to say the service will do what you want.

You may not be able to rely on this guarantee or the guarantee of reasonable care and skill if you insist on a service which theservice provider informs you will not be fit for your purpose.

Example: you ask the drycleaner to try to remove an old stain from a jacket. The cleaner tells you that the stain can notcome out without taking colour out of the jacket. You insist on the work being carried out.

The dry-cleaner must take reasonable care and skill but may not be responsible if the jacket colour is changed, as youhad been told this could happen. If the dry-cleaner causes another problem such as the buttons melting, the cleaner maybe held responsible for that problem.

Services must be provided within a reasonable timeWhere you and the service provider have not agreed on a time when the job must be finished, the service provider mustcomplete the job within a reasonable time. "Reasonable" time will be judged on the time it takes a competent person who worksin that type of job to complete the task.

Reasonable priceIf a price for the work has not been discussed with the service provider, you do not have to pay a price which is unreasonable inthe circumstances.

Example: you hire a plumber to repair a leaking tap. The price was not discussed because you were in a hurry. You havehad plumbing work done before so you were expecting the bill to be approximately $45. You are very surprised when abill arrives for $120. You find out that plumbers normally charge $55 for this type of job so you only have to pay $55.

See the Publications section for a PDF version of this information in leaflet form, or order a copy online.

Last updated 8 June 2010Close