Why did Phil Hogan think SI.9 would cost less than €3000 ?
There was much controversy when former Minister Phil Hogan said that SI9 could be done for €1,000-3,000 earlier this year. At the same time RIAI President Robin Mandal told members that the new regulations would bring an uplift of 30-50% on professional fees. (see link here). Over the last eight months there has been further concerns about a race to the bottom, because there is still no template available for the site inspections needed. It is proving very difficult for professionals to compete on fees because the diligent operators, writing their own inspection plans, are being undercut by those who see opportunities in ‘light touch’ certificates. What some have called the ‘yellow packers with binoculars’ who might engage in drive-by inspections and churn out next-day Certificates.
The only basis for the estimated €1,000-3,000 cost is “industry sources”, so if it didn’t come from the professional bodies, perhaps it came from other players in the construction or insurance industry?
The Department (DECLG) noted projected building regulation costs for the new regulations (housing only) in an early Regulatory Impact Assessment (RIA) for SI.80 in 2012. No estimate was provided for other project types, industrial, ofice, commercial, agricultural etc. The statement from the 2012 RIA is as follows: “..industry sources suggest this requirement could add say between €1,000 to €3,000 per housing unit to the overall building costs” (see links below).
There was no subsequent Regulatory Impact Assessment completed for SI.9 which replaced earlier versions of SI.80. Despite this the former Minister of the Environment Phil Hogan has stuck rigidly to these figures.
“I am concerned about the potential for costs to be exploitative initially. The same thing happened in respect of the building energy regulations introduced several years ago… People were charged between €3,000 and €4,000 for certification inspections that cost €150 in the market. The professions have tended to jump on the bandwagon to exploit the customer for what they can get…”
(former Minister Phil Hogan 12 March 2014- read full text here).
We noted the the cost of SI.9 for a typical house is a multiple of this figure (€21,000) and the the cost for a self-builder may well be over 10 times the Department’s figures (€42,000)- read post below). We believe we may have discovered the “industry source” for the Department’s cost range.
The “Industry source”?
This could be it- from National Consumer Association webpage (2008- see link Here) where costs for additional Homebond inspections are mentioned. Quote:
“..Homebond carries out three inspections of a substantial number of dwellings registered with their insurance scheme, and the cost of these inspections is covered within the registration fee for each dwelling…
…one must conclude that a comprehensive inspection system involving a further two inspections per dwelling, could be established at a modest cost…“
Could the €1,000- 3,000 cost be for a Building Control system based on Homebond/ Latent Defect Inspectors, and not on professional Certifiers? For current costs see the Homebond website here:
So perhaps the former Minister wasn’t talking about professional services when discussing costs of SI.9. Perhaps he envisaged Homebond stepping up their two/three visit per site inspection regime as part of a “one-stop-shop”: 6 private inspections with Certification and defects insurance provided?
No extra fees for professionals at all? Perhaps this is what will happen when LDI (Latent Defects Insurance) becomes available.
Other posts of interest: