Reporting faulty workmanship

Prior to the introduction of Licensed Building Practitioners (LBPs), there was a lot of uncertainty about the legal obligations on a building professional who discovers faulty workmanship undertaken by another trade.

Arguably, the obligations differed based on what part of the building process you were contracted to complete and on the particular role undertaken. For example, there were different requirements for a builder who relies on a faulty substrate, compared to the obligations on a builder who noticed faults which were completely separate to their work, or to those people engaged in an investigative role (such as a remedial specialist or a pre-purchase inspector).

However, following the introduction of section 89 to the Building Act 2004, ignoring faulty work, or choosing to overlook it in certain circumstances, will not be an option. This is because section 89 places a statutory duty on LBPs to notify both the building owner and the council if they identify any building work that does not comply with the relevant building consent.

LBP responsibilities

Since March last year, Restricted Building Work (RBW) can only be done by an LBP. The seven available licences cover design, site supervision, bricklaying and blocklaying, carpentry, external plastering, foundations, and roofing. If the RBW covers more than one of these areas, either the LBP must be licenced in each area, or a number of LPBs will be needed to each complete the part of the work that is within their expertise.

A person who carries out or supervises RBW who is not an LBP commits an offence and can be liable to a fine of up to $20,000. If a person knows that the person they have hired to carry out or supervise RBW is not an LBP, that person can also be liable for a fine not exceeding $20,000.

LPBs are listed on an online register for identification: http://lbp.dbh.govt.nz/publicregister/search.aspx

Once registered, an LBP is required to act competently and becomes accountable to the Building Practitioners Board where that competency is not met.

RBW includes most residential building or renovation work and a lot of the work that requires a building consent. The focus is on ensuring the integrity of the building is maintained, particularly with respect to being structurally sound and weathertight. The intention of the LBP requirements is to help avoid faulty workmanship and defective buildings.

Statutory obligation

In addition to the requirements of competence and as mentioned above, LBPs are under a statutory obligation (under section 89 of the Building Act 2004) to notify the building owner and the local council if they identify work that does not comply with the building consent.

This notification must:

• State that the LBP is of the view that building work carried out under the building consent does not comply with that consent.
• State how the building work does not so comply.
• Be given as soon as practicable after the LBP has formed that view.

Most building consents include a condition that all building work must comply with the New Zealand Building Code. As a result, if building work does not comply with the Building Code, the LBP is also under an obligation to report the non-compliance.

Existing defective work

1. Relating to builder’s work or building consent

Previously, there may have been circumstances where you are asked to complete work that relies on defective work (for example, a membrane applicator asked to apply a membrane to a faulty substrate).

In the past, the obligation to raise the issue of any defective work in those circumstances would have depended on the nature of the defective work in question. If a tradesperson identified existing defects related to his work, he was under an obligation to point out the defect to the owner and head contractor. If the defect meant that the tradesperson’s own work would not comply with the Building Code and good trade practice, he would be under an obligation to not undertake the work until the defect was remedied.

However, if a tradesperson identified existing defects not related to his work, he was only under an obligation to raise the issues with the head contractor and/or the principal. If the defects were accepted by the head contractor and/or the principal, the tradesperson would not be required to remedy the defects or to point the defects out to the local council.

Now, with the introduction of the LBP scheme, all LBPs are under obligation to notify the building owner, as well as the local council, of any faulty work relating to the building consent. In some cases, this may be contrary to the wishes of the head contractor and/or the principal as it may increase the cost of the build. While this could make it a difficult subject to broach, failure to give notification to the local council would be a breach of section 89 of the Building Act, and may result in a complaint to the Building Practitioner’s Board.

2. Not relating to builder’s work or building consent

If you are contracted to complete alterations and notice faults in the existing building that are not related to your work or the building consent – for example, if you are contracted to build a deck and notice that the building is not watertight – your responsibilities are slightly different.

There is no obligation to inform a territorial authority of existing defects in the building, but the owner may appreciate the information if you do raise the issue. Also, by failing to disclose that information to the owner, there is the risk that the owner may bring a negligence claim against a contractor who knew of a fault (and the risk it caused) but chose not to raise the issue.

About Simpson Grierson

This article was prepared by Dave Barr, a Senior Associate at Simpson Grierson. Dave specialises in the Construction Contracts Act and construction-related disputes. If you have any questions relating to this article, or the Construction Contract Act, please contact Dave on ph: (09) 977 5043 or at dave.barr@simpsongrierson.com.The information in this article is intended as a general guide only and is not intended to be legal advice. Detailed advice should be obtained to cover a specific situation.