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Unacceptable Solutions Episode 7: The Pathway To Rectification

This series began with an examination of the pathway to building safety and compliance that the Australian Buildings Codes Board lost us on. And it should end with a pathway to rectification. For that we need to look overseas to Vancouver and New Zealand. Ironically their crises did not concern fire but rain, but their lessons are nevertheless valuable. 

Let’s start close to home in New Zealand and their leaky building syndrome of the 1990s. In the early 1990s the NZ government shifted to an ‘outcomes based’ compliance model to replace a more prescriptive model. It mirrored the shift in Australian to the performance solutions of the BCA. Changes to timber standards, the introduction of new poorly seasoned materials, and a gap in training and regulatory supervision lead to defective work that allowed water to get trapped in buildings resulting in rot and mould. The consensus is now that approximately 45,000 homes were affected, and the rectification costs were estimated by PWC in 2009 at $11.3 B. 

In the aftermath three initiatives stand out 

• There was a quick response to return to more proscriptive standards and away from self-regulation that gave the market certainty about what to use in both new buildings and the rectification of the leaky homes
• A commission of enquiry lead to cultural change of regulatory action and education for trades and professional alike 
• In 2010 a bailout fund was established with shared responsibility between both levels of government in NZ and the owners of the leaky homes with local government paying 25 % of the repair bill, the central government contributing 25 % and the property owners contributing 50%.

In Vancouver in the 1980s there was a similar crisis this time in 3 – 4 story apartments. It was caused by much the same factors, new and untested materials in a damp climate, deregulation and lax supervision and education. In the end $4 B of rectification work was done to over 900 medium density buildings. After the ubiquitous enquiry the compensatory outcome was interest free loans to owners for repairs funded by a levy on new residential development. The regulatory response was a new authority to oversee rectification and new professional standards and an entirely new and distinct profession called building envelope professionals that architects are required to engage to sign off on envelope cladding treatments. 

Property professionals on the ground in the aftermath of both crisis’s report very similar experiences. Rouges and scoundrels entered the rectification markets quickly and made things worse. Many had to have repair work done twice. Invariably the removal of defective cladding revealed other defects that had to be rectified and the cost overruns were high, initially as much as 50 % of the estimated rectification work. And in both cases the remediation work took more than a decade. IN NZ’s case the work is still going on and some properties have never recovered their value. 

The lessons from these strikingly similar situations are clear – a return to more proscriptive standards, clear and consistent communication about the problem and how it will be fixed, tighter regulation and accountability of all authorities and some contribution to the owners financial burden of rectification. 

This is the pathway we must follow to make our buildings safe, to value and market confidence. This is the only acceptable solution.