Murray letter to Senators: BC(A)R SI.9 (SI.105) | Look Back 12

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Look Back 12 | 11 August 2015

This is a look back at a letter sent to Senators by a Past President of the Royal Institute of the Architects of Ireland (RIAI), Padraig Murray, in advance of a Senate Debate on Building Control on 10th April 2014.

In his conscise letter Murray outlines, in what now looks like a very prescient fashion, major issues associated with continuation of our defective system of self-regulation on the construction industry, professionals and consumer:

“This Code will not prevent a Speculative Developer creating another Priory Hall.

It will be possible for a Developer to establish a limited company; retain registered professional staff to comply with S.I. 9; sell the development and put the company into liquidation before any latent defects become manifest.  In those circumstances, the only person available to compensate new owners is the certifier who may be a person of straw.  Sending the certifier to jail will be no consolation to those who are faced with large rectification bills.

This scenario can only be avoided if every building is subjected to both professional inspection during the course of the works and Local Authority inspection at critical stages.

In short, S.I. 9 greatly complicates the building procurement process for all and at the same time, reduces the level of protection available for those who use buildings provided by Contract Building Sector without providing any real protection against economic loss for those who occupy or purchase a defective building provided by the Speculative Development Sector.

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Murray letter to Senators: BC(A)R SI.9 (SI.105)

 

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Previous president of the representative body for architects (RIAI) Pádraig Murray FRIAI sent the following letter to a selected number of Independent and Opposition Senators in advance of A Senate debate on SI.9 (SI.105) on 10th April 2014. You can listen to the audio clip of the Seanad debate here.

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Dear Senator Daly,

I note that you will introduce a motion to annul S.I.105 of 2014 on the 10th April.

It would be more appropriate to annul or adjourn S.I.9 of 2014.

  • S.I.9 will force unnecessary changes to the standard RIAI Building Contracts including changes to the very successful end of contract procedures described therein.
  • The S.I. 9 Certificate of Compliance on Completion will supersede the Final Certificate required by the most used Building Contract Forms in Ireland those published by the RIAI in agreement with the Construction Industry. As a result the very successful end of contract procedures required by those forms will be replaced by the inadequate and over-bureaucratic procedures made mandatory by S.I. 9.
  • S.I.9 for no good reason will greatly increase the exposure of an architect signing the proposed certificate.
  • The existing Final Certificate already imposes significant responsibilities on the architect.  This legislation creates further and unfair risks including criminalisation.
  • S.I.9 will not prevent another Priory Hall nor will it provide compensation for those who may suffer in a similar disaster.
  • No provision is made to compensate those purchasing a defective apartment or house and there is nothing to prevent a Developer disposing of same before latent defects become manifest.

Please read the attached memorandum for further explanation of the above statements.

Yours sincerely

Padraig Murray, FRIAI

Cc:       All members of the Seanad

Seanad Debate : Thursday 10th April 2014

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S.I. 9 MEMORANDUM

Unnecessary change for the building industry as a whole.

This legislation will impact significantly on two sectors of the building industry in Ireland which provide the buildings we use referred to in this Memorandum as:

The Contract Building Sector.

The Speculative Development Sector.

What is the difference between them?

The Contract Building Sector provides our institutional buildings, universities, schools, hospitals, clinics, our commercial buildings for use by our public companies and enterprises, offices, shops, factories, our religious buildings our sports arenas and so on, together with a small proportion of our housing, mainly one-off housing and public sector housing.  The buildings are procured with professional advice at all stages and are built by competent independent building contractors.

The Speculative Development Sector provides a significant proportion of our housing needs both in housing estates and in multi-story apartments and a small proportion of buildings for commercial use often in renovated existing structures.  Significantly, many (some say all) of the building disasters since the Second World War, for example Priory Hall, the Pyrite housing, the Stardust fire, have occurred in buildings provided by this sector. These buildings are often procured using a minimum of professional advice and are built by a Developer.

What is the difference in the way their two sectors have procured their buildings?

The Contract Building Sector procured it’s building prior to S.I.9 as follows.

The architect and other consultants design the buildings to meet the requirements of the Planning Acts.

The architect and other consultants develop the planning drawings to comply with the Building Regulations and to obtain tenders.

The building owner enters into a contract with an established building contractor and the architect administers that contract and inspects the site.  Supplementary information may be furnished from time to time during the contract.

When the building is ready for occupation, a Certificate of Practical Completion is issued by the architect, but a sum of money is retained, the “Retention Fund”, for the duration of the “Defects Liability Period”, normally one year from Practical Completion.  At that point the building is thoroughly examined, all defects, especially those that become manifest after the building is occupied, are rectified, using the retention fund, only then is the Final Certificate issued.

The Speculative Building Sector have procured their buildings as follows:

The buildings are usually but not always designed by an architect to meet the requirements of the Planning Acts.

The building owner often goes straight to site using the planning drawings for construction purposes and depends on the knowledge, experience and common sense of his building operatives to meet the requirements of the Building Regulations.

On completion, the building is sold.  There is no defects liability period, there is no retention fund, and there is no opportunity for defects to manifest themselves before the building changes hands.

These are the buildings that give trouble later.  All of the major building disasters since the Second World War came from this category of building.  The fact that relatively few disasters occurred is a tribute to the knowledge and good common sense of our building operatives. However these buildings when free of disaster are frequently plagued by defects of the kind rectified after a year in the Contract Building Sector.

The new Building Regulation S.I. 9 imposes a new bureaucratic and untried system on the whole industry for all types of building. This system is described in a Code of Practice that runs to 27 pages of bureaucratic requirements.  In my opinion, two items stood out.

There is no requirement that the Building Control Authority must inspect either the voluminous information to be lodged or the work on site.

The Certificate of Compliance must be validated and registered by the Building Control Authority BEFORE the building is “opened, used or occupied”.

There is no provision for a retention fund, there is no provision for a defects list and remedial works twelve months after practical completion, the sensible successful system developed over a period of almost 200 years that has served us well is abandoned in the case of the vast majority of buildings for a system that is uncommonly close to the discredited one used by speculative builders.  This is a retrograde step.

Increased exposure for architect signing new Certificate

In the Contract Building Sector architects have always signed a Final Certificate at the end of the Defects Liability Period.  That certificate is conclusive evidence that the works have been properly carried out and completed in accordance with the terms of a contract (the terms of contract automatically provide that the Building Regulations have been complied with).  The certificate specifically excludes fraud, dishonesty, fraudulent concealment, defects or omissions that a reasonable inspection would not have disclosed. In addition the architect may rely on the advice of the consultants.

The new certificate has none of those reasonable exclusions however it has a number of additional hazards for the architect some of which are listed below.

S.I. certificates hold the certifier to be solely responsible for all the works.

Legal opinion appears to be that S.I. 9 “ancillary” certificates, furnished by consultants and contractors, are not to be relied on.

S.I. 9 certificates do not exclude fraud, dishonesty etc. referred to above.

S.I. 9 certificates must be issued without provision for a defects liability period, a retention fund or continuing architect authority to deal with post completion problems.

S.I. 9 certificates are subject to the possibility of bureaucratic delay on the part of the local authority with the risk of financial sanctions being imposed on the developer for which the certifier will be held responsible.

S.I. 9 certificates are more likely to lead to third party (tort) actions.

Most serious of all a defective S.I. 9 certificate will criminalise the architect.

S.I. 9 will not prevent another disaster nor does it provide financial assistance for those who may suffer financial loss 

It should be possible to ensure that the Speculative Building Sector complies with the Building Regulations without subjecting the whole industry to the bureaucratic Code of Practice recently published by the Department of the Environment, Heritage and Local Government.

S.I. 9 creates a Code of Practice that must be adhered to by all.  The Code will simply tie up architects offices in red tape requiring that things be done in the faceless bureaucratic way described.

The new system of a Certificate of Compliance on Completion will replace the much superior system of a Final Certificate issued not less than 12 months after completion now current for buildings where the standard RIAI contract forms have been used.

However this Code will not prevent a Speculative Developer creating another priory hall

It will be possible for a Developer to establish a limited company; retain registered professional staff to comply with S.I. 9; sell the development and put the company into liquidation before any latent defects become manifest.  In those circumstances, the only person available to compensate new owners is the certifier who may be a person of straw.  Sending the certifier to jail will be no consolation to those who are faced with large rectification bills.

This scenario can only be avoided if every building is subjected to both professional inspection during the course of the works and Local Authority inspection at critical stages.

In short, S.I. 9 greatly complicates the building procurement process for all and at the same time, reduces the level of protection available for those who use buildings provided by Contract Building Sector without providing any real protection against economic loss for those who occupy or purchase a defective building provided by the Speculative Development Sector.

Other posts in “Look-Back” series

Simon Carswell: Politicians, Construction industry lobbying and banking | look back 10

Legal perspective: consumer benefit? BC(A)R SI.9 | look back 9

Minister Hogan defends BC(A)R SI.9 | look back 8

Christmas Past – What did you hope for from Santa in 2013? Look back 7

Ghost estates and public housing: BC(A)R SI.9 | look back 6 

Government Reports + Professional Opinion Ignored in SI.9 | look back 5

SCSI | “Highly unlikely Priory Hall would happen in Britain”- Look Back 4

BRAB and BC(A)R SI.9- Look Back 3 

Inadequate Regulatory Impact Assessment for S.I.9- Look Back 2

World Bank Rankings, Ireland & SI.9 – Look Back 1

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