Disclosure statements

Have you developed a process for providing a disclosure statement and what has been the reaction from your customers?

Firm: Mokoia Developments 
Principal: Clive and Lloyd McMillan 
Location: North Shore
Staff: 9

It feels like we’re giving away a lot of information to people very early in the consultation process, rather than the contractual process. At that stage, we don’t really know what their intentions are, and we’re required to provide them with a fairly high level of detail.

We’ve always used the Certified Builders Association of New Zealand contracts, and now we’ve put together a system for issuing disclosure forms alongside those. I set up a template that includes our insurance information, GST number and myself and Lloyd’s Licensed Building Practitioner numbers.

I recently presented one to a client and they were blown away by how much information we were required to disclose. Consumer protection measures are blatantly one-sided in favour of the client – they’ve a lot more teeth now with the new legislation that has been passed.

If this continues, I think the landscape will change so much that it will no longer be economical to run a small building business. The amount of red tape and paperwork required will mean businesses will need bigger office structures. As a builder, there is a lot less time available to bang in nails, which is the only time you’re making money.

Firm: Wren Building Ltd
Principal: Simon Wren
Location: Whakatane
Staff: 4

We have used the forms a few times now and all of our clients have been impressed with the information supplied; however, we have found that the new requirements add another step to an already complicated renovation process.

Nevertheless, we have found that the information is well received and it adds another level of understanding between the builder and client. As well as sending it as a separate document, I attached a hard copy to the back of the contract.

“All of our clients have been impressed with the information supplied

 

Overall, I think it’s a positive step for the industry. It will help weed out the cowboys and it means the customer knows a bit more about the company they’re doing business with.

Obviously it’s still in the early stages. It’ll be interesting to see how it all pans out.

Firm: Emandee Homes
Principal: Mike Potter 
Location: Whakatane
Staff: 7

We’ve just been using the standard forms provided by Certified Builders (CB) and it seems like none of our clients particularly care! Because we use the CB contracts as well, the information we’re required to disclose is already in the contract.

As part of our standard process, we go through our contracts with the client with a fine tooth comb; so by the time we hand them the disclosure form, we’ve already given them that information.

I’m not quite sure what these new regulations are trying to achieve; I think there’s some value in the checklist, because it gives customers a better outline of the building process. However, the disclosure statement is just doubling up on what is already in our contracts.

That being said, it’s no skin off our nose. It’s a simple process and we’re just going through it; it doesn’t seem to bother anyone. I guess the benefit is that now everyone is required to disclose the same level of information, regardless of what’s in your contract, your client will have access to it.