questions to mbie, council and cera

Christchurch Residents' Group

Questions arising from a meeting with MBIE on 21, June 2013

The meeting was arranged by Roger Sutton following a presentation given by Hugo Kristinsson for the CERA Community Forum on 6 June 2013

Attendees


Hugo Kristinsson

Adrian Cowie

Sarah Miles

Sarah O'Brien

Emma Magnúsdóttir

CanCern

Leanne Curtis

Brian Parker

MBIE

Malcolm MacMillan

Dave Gittings

CERA

Matthew Walters

Diane Turner

CCC

Patrick Schofield

Nathan O’Connell

Tonkin & Taylor

Mike Jacka

Questions submitted on 15 July 2013

Legislation

1. We believe that the Bill of Rights Act, the Fair Trading Act 1986 and the Consumer Guarantees Act 1993 have been breached with implementations for the Building Guidelines – Do you dispute this? What reasons can you provide to argue that this is not the case?

2. Is it not true that the consenting process can now be ignored and/or circumvented by PMO and contractors?

Consumer Law Reform Bill

3. The Consumer Law Reform Bill proposed changes for the purpose of protecting insurers rather than the consumer. ["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"] - What is the motivation behind these changes?

MBIE agreed to go back and address why these changes are being made and why they seem to favour the insurer at the expense of the policyholder.

Building Act 2004

4. The category of work known as 'Exempt Building Work' detailed in Schedule 1 of the Building Act 2004 has been expanded in Canterbury, yet these same changes have not been implemented throughout New Zealand - why is this?


5. Central Government decided to expand the definition of “low risk work”

(Exempt Building Work) in Canterbury to make sure the Consenting Authority would add most value and help support the rebuild. What are these mechanisms by which this is achieved?

6. The City Council has been given the discretionary ability to exempt work -

when was it given this authority and how did it come into force?

7. As a result of the Canterbury earthquakes, there is a need to tighten up building requirements related to unknown substrates - yet what we are seeing is that the parameters for unconsented work have been diminished. Where is the consumer protection in these changes?

Property Assessments

8. Unqualified assessors have assessed the majority of Christchurch properties and land. How is the Council endeavouring to remedy this situation?

9. People are not receiving guarantees and/or receipts for work which has been

done. Implied guarantees are of little value without documentation. How will the Council ensure the traceability and accountability of work carried out for homeowners?

Licensed building practitioners

10. The scope of this scheme extends to building practitioners, but not to assessors - what we experience in practice is that many assessors are working in the field who have no qualifications at all. What audit process is in place to give residents security in terms of the quality of work carried out and of unconsented work? An audit system is vital - how are CERA and the Council going to implement this?

11. How can MBIE continue to justify these guidelines? Has IANZ not confirmed

that this approach has been a dismal failure. If 90% of consented work fails inspection, what can we expect to be the standard of unconsented work without inspection?

12. An owner or owner's agent/PMO is able to apply for a building consent. Council has introduced a B390 exemption, allowing, for example, a heavy roof to be replaced with a light roof, and the replacement of 20% of piles of a single storey building. However there is no audit system in place. Instead it is left to the "professionals" to make a judgment call in each case. This seems highly irresponsible. How do you justify such an approach?

13. Council has been asked to mediate between what is a repair and what is a

rebuild. Are the decisions in such cases being made public, and if not why not?

MBIE determinations

14. The existing mechanism for addressing some of the issues that arise is a 'determination', a binding decision in law relating to the Building Act or the Building Code. According to MBIE, the rulings in most cases are that the work


is exempt. Why has MBIE stopped publishing the results of these determinations?

Cases of corruption and criminality

15. How will CERA address cases of corruption and criminality involving contractors? Who will check that what is being said will be done, is in fact being done? How will the authorities ensure a sustainable and professional level of repair?

16. The information published in the EQC land reports was outdated and highly

misleading. Despite this, some of the land in Christchurch that is deemed to be unbuildable is subject to insurance cash settlements without the owners knowing the full extent of the actual land damage. This leads to the likelihood of unconsented repairs being carried out to unsafe houses on unsafe land. What is MBIE going to do to address these glaring problems?

17. Why are citizens not being given full access to information about their land

damage?

18. Reinsurers have paid EQC $2,000.00 in 2011 per square metre for property that has been written-off, yet the introduction of minimum guidelines allows repairs to such 'written-off' properties while at the same time diminishing the quality of those repairs and reducing the equity in land and home. We ask for clarification as to how and why this is deemed acceptable?

Bill No. 4

19. Changes to Building Act 2004 - our view is that consumer protection is being systematically eroded. In particular in relation to designers and subcontractors. MBIE states that the Act is, in fact, bringing heightened disclosure, strengthening implied warranties, eliminating defective work and the need for builders to go back and repair mistakes and problems within a year. Liability is being transferred from the main contractor to subcontractors and then to homeowners, who are excluded from the consumer protection provisions in the Building Act in the proposed changes of Bill No 4 – We ask how it is that these proposed changes can be seen as an improvement for the consumer? and What can be done to remedy this situation? Currently there is no consumer protection in the Building Act as amendment no4 which includes some consumer protection has still not been passed as law. Who is responsible for the decision to leave this important change till last? Changes to the Consumer Act fall under MBIE's remit, while the Fair Trading Act is the responsibility of the Commerce Commission.

The Vulnerable in Our Community

20. Malcolm McMillan was to clarify how and where we the concerned citizens of Canterbury, can lodge a complaint in relation to the vulnerability of citizens being exploited by MBIE's implementation of lower standards of building with the introduction of DBH Guides and PMO Guides, and by allowing un-consented structural repairs to foundations without any checks on land bearing capacity or the suitability of current foundations. Please action Malcolm McMillan!


21. Christchurch City Council's 'exempt work' - work must comply with the code -

structural engineers and licensed building practitioners. If not built to the code there is potential risk of harm to the home owner. What are the implied warranties under the Act? and how are these being explained to home owners?

22. MBIE state that a prudent homeowner would be asking for evidence of appropriate guarantees and consents for work carried out. Yet we see a large segment of the community who are vulnerable and who are simply unable to adequately protect themselves or avail themselves of the information and expertise to ensure they are adequately protected. How are these groups to be adequately protected?

23. The Christchurch City Council is aware that there are building practices being followed that are not what they should be, yet there is no mechanism for protection of the homeowner. For example, unqualified people have been conducting structural assessments. There are tens of thousands of houses which have been poorly and inadequately assessed. What do the Council and other relevant bodies propose to do to remedy this situation?

Rationale for the Introduction of the Guidelines

24. What was the rationale behind the introduction of and changes to the guidelines? MBIE declares that the extent of damage here in Christchurch has led to 'uncharted territory'- the authorities need to ensure that the right quality of work is carried out and because there is much of the same type of damage - the guidelines introduce 'efficiency' into the repair programmes. Yet these same changes have not been extended throughout the rest of New Zealand. Why not? MBIE state that they are currently considering rolling out some of those changes wider afield, such as the requirement for the use of reinforcing steel in foundations, and guidelines for liquefaction-prone areas throughout the rest of the country.

25. Insurance contracts were in place at the time of the earthquake - in a recent case before the High Court an insurance company failed to provide an example of a new building that was built with floors 40 mm out of level - CERA has also failed to provide evidence that this tolerance exists within new buildings. Is MBIE able to provide evidence that justifies this increase in tolerance of floor levels in the DBH and PMO Guidelines?

26. The citizens of Christchurch ask what legal right you have to modify the standards? MBIE state that they have not changed the code, but merely the tolerances, and that these tolerances are still deemed to comply with the code. Despite the changes to the code or the tolerances, neither sit neatly with homeowners' insurance full replacement policies - clearly structural integrity is not the only consideration for the homeowner. It seems clear to many Canterbury residents that the PMOs and insurance companies are using the introduction of guideline documents to diminish their own responsibilities under the legal protection of the Building Act and under individual homeowner policies in order to achieve beneficially economic outcomes in their favour and to the detriment of the homeowner. The guidelines and insurance contracts conflict with one another. How is this to be addressed?


27. The guidelines are exactly that -'guidelines only': they have no legal standing and as such a homeowner need not agree to their implementation. Why are the guides being used if they undermine the protection inherent in the building code?

28. From the affected residents' of Canterbury perspective, it would appear that the various agencies/groups involved in the rebuild of Canterbury are not communicating with one other. How is this to be rectified?

29. CERA has identified in Cabinet minutes (Cab Min (11) 41/24) that there are properties that have suffered approximately 90% land damage. How can MBIE allow repairs to houses foundations where land has subsided, and where consequently, the bearing capacity is up to 50% less due to a rise in groundwater? Current foundations are not adequate because of the reduction in land bearing capacity.

30. MBIE seems to be ignoring the requirements of the Building Code in the following areas:

B1.3.3 Account shall be taken of all physical conditions likely to affect the stability of buildings, building elements and site work, B1.3.7 Any site work and associated supports shall take account of the effects of: (a) changes in ground water level, (b) water, weather and vegetation, and (c) ground loss and slumping.

MBIE must clarify how they can ignore these requirements, in particular with relation to TC3 land?

31. ULS/SLS statistics are used to determine TC categories. While it is clear what the maximum is for TC1 and TC2. Why is there no maximum whatsoever for TC3?

32. A report commissioned by the Canterbury Earthquakes Royal Commission was delivered to Council in November 2011. The purpose of the report was to investigate the manner in which issues of earthquake risk have been dealt with in the relevant planning documents of the Canterbury Regional Council (ECan) and the Christchurch City Council. This includes an analysis of the councils’ obligations under the Resource Management Act 1991. ECAN has still not delivered the hazard map for Christchurch, which identifies the various hazards after the earthquakes. The term natural hazard means any atmospheric or earth or water-related occurrence (including earthquake, tsunami, erosion, volcanic and geothermal activity, landslip, subsidence, sedimentation, wind, drought, fire, or flooding) the action of which adversely affects or may adversely affect human life, property, or other aspects of the environment. Many properties that have been repaired or rebuilt may be a subject to a hazard notice on the LIM when this information is finally released.

In light of the fact that the hazard changes in Christchurch are now known and mapped. What is the reason for not releasing this information, as it has a significant impact on our Building Consent Authority and forms an integral part of a Building Consent?


33. The New Zealand Society for Earthquake Engineering Inc. provided its response to the Ministry of Business, Innovation and Employment’s Building Seismic Performance Consultation document in March 2013.

This document identifies issues that MBIE is aware of:

· Too much variation in local practice · Public confusion about risk · Lack of good data · Poor information on individual buildings · Inconsistent market responses · Lack of central guidance

Proposal 1 states that: Local authorities would be required to make a seismic capacity assessment of all non-residential and multi-unit, multi-storey residential buildings in their districts within five years of the legislation taking effect, using a standard methodology developed by central government, and to provide the resulting seismic capacity rating to building owners. Owners could have their buildings' seismic capacity rating changed by commissioning their own engineering assessment. Is it logical to repair or rebuild buildings that are likely to be affected by the above, without taking these serious issues into consideration?

Please provide clarification and answers to these questions before 22 July 2013.

Yours Sincerely, The Christchurch Residents' Group P.S. A response can be sent to [email protected] or [email protected]

Disclaimer: All information in this document is provided ‘as is’, and we accept no liability for its accuracy.

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