Managing new consumer protection measures

What are your thoughts on the new consumer protection measures and how will you deal with them?

Firm: Network Builders
Principal: Matson Broederlow
Location: Albany, Auckland
Staff: 15 staff

I think the requirements of the new consumer protection measures are becoming more and more commonplace, so it was only a matter of time before it became law.

Consumers are nervous, with so many builders going bankrupt and defects occuring, so it’s not surprising that the government is putting protection measures in place. As a business, we started going down this road a while ago, when we decided to get Lloyd’s comprehensive insurance, which covers pretty much everything that could go wrong. It’s a selling point for our customers, because they know that Lloyd’s carries out inspections as the work is being done, and that no matter what, for the following ten years, we have the insurance to back any necessary repairs or defects.

The new measures also require people to outline their payment process, which we’ve always done. We only get clients to pay for work that’s completed, but we invoice them fortnightly, or even weekly sometimes.

It’s all about minimising risk for everyone involved. My process makes me feel 100% secure going through these regulation changes, and it makes our clients feel 100% secure about working with us.

Firm: David Reid Homes
Principal: Paul Richards
Location: Nelson
Staff: 3 builders, 2 sales & marketing

I only started the business in 2002, so paperwork has always been part of the process. However, we’ve just re-launched a franchise, David Reid Homes, and anticipate a much larger workload, so there will be a lot more admin work to be done.

We already use contracts for most work – unless it’s someone we’ve worked with for a while – so it won’t be a big deal to draw up contracts for those situations once the regulations come into play; I put them together myself anyway.

We also already provide most of the other stuff outlined in the new consumer protection measures, such as payment processes, a copy of our insurance policy and both a David Reid Homes and Registered Master Builders guarantee.

The only aspect that’s been discussed, which I don’t agree with, is having to provide a financial statement, or health check, of your business. There’s just as much, if not more, risk to the builder when it comes to ability to pay, so if this becomes the case, then maybe clients should provide a bank statement that proves they can pay for the build. If my clients are worried, I always offer to put their deposit into a trust and only withdraw as required.

Firm: Coman Construction
Principal: Ben Coman (contracts manager)
Location: Nelson & top of South Island
Staff: 35 staff, 6 apprentices

Coman Construction has grown significantly since my father started it as a one-man band in 1987 and, with our expansion, we’ve taken most of the consumer protection measure requirements into account.

This is partially because we work with either an engineer or an architect on most projects, and they manage the contract. This means they act as a middleman for any negotiation-type situations and are responsible for making sure we have all the required documentation and guarantees, such as public liability, motor vehicle and sometimes contract works insurance. We find it much easier to have someone else facilitating the contract side of things.

However, on the few projects that we do manage without an engineer or architect, we use NZS 3915, which stipulates a number of requirements.

One guarantee that we have been asked for, on occasion, is a contractor’s bond, which demonstrates our financial capacity to undertake the work. While it’s definitely not every time, it’s becoming increasingly common and sometimes we’ll ask for a principal’s bond in response.

Now have your say…

How are you handling/finding the LBP requirement to fill out Records of Work documentation for restricted building work (RBW)?

Answer this question to enter our quarterly prize draw

Email your answer with your full name, contact phone number, company name, number of full-time staff and the city or town in which you’re based to editor@pmundersconstruction.co.nz. All responses must be submitted by 25 October. The answers to this question will be published in Under Construction December.