Building Contract Administration- Are you going to drop a bundle of cash?

Recently I was assisting owners on their 1M build that had run into problems. Builder was not performing and there were numerous defects with the build. Builder was trying to get to lockup and to extract his next progress payment and there were prior negotiations about both parties walking away ending the contract.

In essence builder was aiming for somewhat discounted lockup progress claim before calling it quits. The owners who were already talking to another builder entertained the idea of paying the builder lockup claim (when achieved) and just getting him off the site but were worried about cost of defect rectification.

Once I became involved I was able to confirm substantial defects however there was a “King Hit”.  Oblivious to the owners, builder has over claimed on progress payments and was claiming and getting paid for the work not yet done. In essence the amount of overpayment was almost the value of the next lockup progress payment.

Without realising, owners had already seriously overpaid the builder  and were now facing serious budget shortfall and not enough money to rectify defects and finish the job.

The owners who had no experience in building and building contract administration were not prudent enough to engage independent expert to assist them with their build.

Oh how they wish they had!

 

 

 

 

 

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Pre Slab Inspection, preparations rushed and incomplete!

We always recommend pre slab inspection for two reasons:

Firstly to make sure that preparations are complete and nothing of significance has been missed and secondly to put builder on notice that you have building expert looking after your investment.

This is what we found on a recent inspection:

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This is what I said in my report:

“On the way to this inspection concrete contractor rung me saying preparations were not complete and that he was short of reinforcing but that would be rectified next morning just before slab pour. He also said that building inspector performing mandatory slab inspection had been but would come back in the morning to check again.

On arrival I found slab preparations substantially incomplete and rushed:

  1. Incomplete formwork
  2. Incomplete row of formwork against ground
  3. Areas of missing reinforcing mesh
  4. Locations of inadequate mesh lap
  5. Incomplete steelwork tying
  6. Incomplete lagging to pipes
  7. Inaccurately placed pods with narrowing of rib beams
  8. Incomplete fixing of formwork set downs
  9. General lack of workmanship and attention to detail
  10. Set out string lines have been removed and now there is no chance of monitoring formwork for unintended movement.
  11. Statutory slab inspection had not passed

 Expert Opinion:

 Slab preparations have been unnecessarily rushed and are incomplete and at the time of inspection slab had not passed mandatory inspection from the building surveyor.

It is not sufficient just to pass mandatory inspection. Slab preparations must exhibit completeness, attention to detail and workmanship that would be expected from a builder skilled in his art or there will be a breach of workmanship warranties.

In my opinion the client cannot be comfortable with preparations to date.

It is not clear how builder’s quality control (if any) can allow present situation to develop

 Recommendations:

  1. Concrete pour should be delayed or cancelled until all preparations have been completed with proper exhibition of workmanship.
  2. Reinspection to ensure completion of detail”

Your investment is far too important to skip pre slab inspection. If foundations of your home are not right how can the rest of your build be?

 

 

 

 

 

 

 

 

 

 

 

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Pre purchase inspection, your investment is at risk!

Buying a property is risky investment and you can get caught out and it could cost you plenty and give you a lot of headache.

My client, a young man invested in a unit but did not get a pre settlement inspection. Soon after timber floors failed and the builder/developer does not want to know about it. Here is what happened:

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I was engaged to do a VCAT report together with estimated cost to fix the defects.

My client has problem with the tenants because of the failed floors and now is looking at substantial costs in prosecuting his claim, some of which if not all will not be recoverable.

This matter is yet to be heard but could have been easily avoided. If there was a competent pre settlement inspection it would have identified construction faults that have caused floor to fail.

The best problems are the ones avoided altogether.

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Pre Purchase Inspection. Renovated home,what really are you buying?

One of the problems with renovated homes is that generally they look nice all dollied up. Its easy to be fooled and untrained eye will miss significant issues. It’s only after professional inspection that will you know if you have missed any wrinkles.

Typical example is this recently renovated home that presented really, well but?

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“This dwelling is renovated however floor levels are visibly uneven.

IT APPEARS THAT THIS DWELLING HAS A TILT FROM LEFT TO RIGHT.

Significant issues:

  1. Floor levels are visibly uneven.
  2. Spa is a drowning risk because of inadequate safety fencing.
  3. Garage has no structural bracing.”

As it happens this dwelling has serious issues with the floor that cannot be easily fixed without significant expense. If you were the potential buyer you would want to know about that.

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Pre Purchase Inspection- More disappointment avoided!

Recently I inspected old weatherboard home that had been fully renovated and it looked in mint condition. A young man buying his first home engaged me to do a pre purchase inspection to protect his investment.

The home presented nicely and the quality of renovation was quite good but it seems they had not paid attention to floors. I found that the floors were seriously out of level. It seems that even though the dwelling had been restumped in the past the levels failed anyway.

“Additional Comments: This renovated timber home is generally in a good condition but the timber floors are seriously out of level. Although renovation is generally good, this dwelling should have been restumped and had floors levelled before renovation work.

Restumping is recommended and as a rough guide, a budget of $15,000 should be allowed for restumping and ancilliary touch ups.”

 I don’t know the outcome but the report has placed the buyer in a strong negotiating position.

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Pre Purchase Inspection, another disappointment avoided!

A lovely lady engaged me to do a pre purchase inspection on a home she intended to buy. She had been through it and it looked all fine but she wanted a second opinion. She also explained that in the past she had to do significant repairs and maintenance to her home and that is what she wanted to avoid this time.

I had inspected the home and this is what I had to say:

“This older home has not aged well and significant movement to walls and floors due to ground movement has resulted in uneven floors, walls out of plumb and generally a condition that cannot be economically fixed. Although the home is sound and safe for occupation it will always remain “not quite right”. Mature trees have probably contributed to house damage as has excessive watering of the garden bed (resulting in efflorescence salts eroding mortar and causing stains). that has probably caused stump foundation softness resulting in internal wall subsidence in the lounge room/kitchen.

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Recommended significant works: (as preventative maintenance)

  1. 1.  Remove mature trees and garden bed in front of the lounge room.
  2. 2.  Renew stormwater drainage.
  3. 3.  Install drainage pit at the front entry in the low spot.
  4. 4.  Demolish and remove cracked and uneven paving and driveways.
  5. 5.  Restump sunken wall in the lounge room.
  6. 6.  Underpin front corner of the bedroom.
  7. 7.  Repair brickwork where cracked or out of vertical.

Refer to general maintenance list in this report.”

Faced with repairs and maintenance that she definitely did not want, she walked away. About two weeks later she called me because she found another property. I reported:

Additional Comments: This dwelling has no significant reportable defects.

Minor defects:

  1. Patchy and partly missing ceiling insulation.
  2. Two slipped roof tiles.
  3. Damaged sliding door head to the rear.
  4. Check that the pergola has been constructed with a Building Permit.”

That was good enough and she purchased a much better home.

There you go, some stories do have happy endings!

 

 

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Dispute Mediation? Bring out your guns or else!

About a year ago I prepared VCAT report for a client in defence of claim by home purchaser against him. The claim was of all sort of defects and on my analysis most of them were trumped up, wishful thinking and unsubstantiated. However I heard nothing so I followed up with a phone call.

He told me that he went to a compulsory mediation where he got rolled. His barrister wasn’t there when he needed him because he was on holidays and sent someone less experienced, uninterested and that actually worked against him.

The other side came well prepared, well rehearsed and played him to perfection. They produced new expert reports on the day of mediation with outrageous new claims pushing to well over 100K.

Mediation took all day. Intimidated, bullied, worn out and tired with no help from his side at 6PM he just wanted it to be over and signed a bitter deal.

He was to pay purchaser 38K (plus his own legal costs 20K) for what? This was my report summary:

Inspection findings:

Inspection findings revealed that this is an old relocated home that was renovated and sold. Whilst weatherboard painting has failed in places there was no evidence of significant rot that would justify replacement. Repainting of affected areas following proper sanding back is all that is reasonably required and the respondent has agreed to do so.

Gutter full of leaves and twigs was found to the front left side of the home where it corresponded with rot in rafter in the position where gutter overflowed.

 Schedule of complaints

ITEM                                            BC dDc. /Work                                    BE Dec.

1 External water tank Not defective/no work required —————————————–
2 External eaves Defective/work required Patent defect/ no work required
3 External painting Defective/work required Builder agreed to repair
4 Internal painting Defective/work required Patent defect/ no work required
5 Bathroom painting Defective /work required Patent defect/ no work required
6 Bay window roof Defective/work required Builder agreed to repair
7 External fascia rot Defective/work required Defective/work required
8 Balcony decking Item no longer an issue ——————————————
9 External weatherboards Defective /work required No substantial rot found
10 Water pressure Item no longer an issue ————————————
11 Floorboards insulation Defect not determined Defect not proven against builder
12 Rusted spouting Defect not proven Defect not proven against builder
13 External doors Defective/work required Patent defect/no work required
14 External window splitting Defective/work required Patent defect/no work required
15 Kitchen rangehood installation Defect not found —————————————–
16 Loose downpipe Defective/work required Item mentioned in 137B report
17 Doors not sealed to weather Defect not determined/no work required Defect not proven against builder
18 Roof Gaps Defective /work required No substantial defect found

Item summary:

  1. Of the 18 items, three items are no longer an issue, items 1, 8  and 10.
  2. No defects found by BC, items:11, 12, 15 and 17.
  3. Builder agreed to rectify items: 3 and 6.
  4. B-E agrees with item 7 however this is a very minor item that can be done during repainting.
  5. B-E disagrees with:

Item 4- because painting was patently obvious at the time of property sale.

5- because painting was patently obvious at the time of property sale.

9-As accredited timber pest inspector B-E declares there is no rot requiring  weatherboard replacement.

13- because painting was patently obvious at the time of property sale.

14- because painting was patently obvious at the time of property sale.

18-because no substantial defect was found.   

  1. 1.     A summary of the opinion or opinions of the expert:
  1. As a qualified and accredited timber pest inspector, I have determined that there is no weatherboard rot present that would justify replacement of weatherboards.
  1. It is understood that the respondent has agreed to repaint weatherboards where required and to repair roof over bay window over the front of the house. There is no reason why this should not be allowed.
  2. Owner has inspected the dwelling prior to purchase and it is in my opinion estopped from revisiting quality of the painting.
  3. In my opinion, the remainder of complaints on the schedule has no merit as they are either frivolous or misconceived. (Complaint about loose downpipe that is clearly visible in Section 137B Report, complaint about roof space gaps and similar).
  4. In my opinion, the owner’s estimate of costs to repair the dwelling is based on a quotation from a commercially interested party and has no objectivity.

So what happened?

Purchaser that knew she was buying old home that was relocated to new position managed to get 38K for defects that she knew were there when the house was purchased.

My client did not think to give me a call and to ask be to attend compulsory mediation where I could explain my findings and critically examine any new defect claims form the other side.

Intimidated, outgunned and outplayed he was rolled. Expensive mistake!

Bring out your guns or else.

 

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How safe is your home?

Recently I inspected a large multi million dollar home in a prestigious suburb. It had many  issues but the following issues stood out

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DSC_6656 copy Finding defects of this type induced me to look further and this is what I found

Media Release

From the Building Commission 1 November 2012

Building surveyor registration cancelled

The Building Appeals Board has upheld a Building Practitioners Board (BPB) decision to cancel the registrations of a Wheelers Hill-based building practitioner as a result of unprofessional and incompetent conduct.

Following a Building Commission investigation the BPB found Mr Johannes De Jong had failed to competently carry out his work as a building surveyor and inspector at dozens of building sites across Melbourne, predominantly between 2005 and 2010, and cancelled his registration.

Mr De Jong appealed the BPB decision, but the Building Appeals Board dismissed his appeal and affirmed the original decision, which included an order for the practitioner to pay costs of $84,000. The costs of the appeal have yet to be decided.

The Building Commissioner, Mr Michael Kefford said the Commission will not tolerate repeat offenders.

“This was not a one-off instance by Mr De Jong,” he said, “but a continuous pattern of failing to carry out the duties which were expected of him as a professional building surveyor.

“Mr De Jong is now unable to perform any building surveyor or inspection work following the cancellation of his registration.

“This should serve as a warning to other practitioners who might think they can get away with cutting corners and flouting the law.”

This was the second time that Mr De Jong had faced a BPB inquiry. In April 2004 he was also found to have acted unprofessionally and incompetently in relation to two unrelated sites—he received a reprimand, a $500 fine, and was ordered to pay a further $275 in costs.

“Mr De Jong’s inability to improve his conduct means a larger penalty and the cancellation of his registration was the only solution,” concluded Mr Kefford.

Some examples of Mr De Jong’s conduct included:

  •   Failing to carry out mandatory inspections to detect non-compliant building work.
  •   Failing to identify defective work.
  •   Issuing an occupancy permit, even after identifying breaches of the Building Act 1993.
  •   Delegating his building surveyor functions to another person, without the statutoryauthority to do so.
  •   Issuing an inaccurate and/or incorrect building permit.
  •   Issuing an inspection report for the wrong house.
  •   Including incorrect information on a building permit.For further information, contact: Cameron Jackson, Building Commission cjackson@buildingcommission.com.au 03 9618 9298 / 0418 271 988

What this essentially meant was that this multi million dollar home was constructed with unreliable statutory inspections. How safe can it be? What else was missed?

My client was properly advised.

Will you take a gamble with your investment and perhaps with your life and the lives of those that you love more than yourself?

Your call.

 

 

 

 

 

 

 

 

 

 

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Expert evidence, building expert prevails, owner builder ordered to pay damages.

Just freshly out of a VCAT hearing where my client has been successful in getting order against owner builder for defective work.

My client had purchased an owner built property and had done everything right but still got a wrong outcome. In saying that he had done everything right he relied not only on owner builder’s section 137b report but also on a pre purchase report.

Soon after purchase, garage deck leak became evident and also many other problems

I was called to prepare a defect report. I was critical of the owner builder, the council and the 137B report.

My client settled separately with the council and the company that prepared 137B report

The matter went to VCAT hearing after unsuccessful mediation.

The builder was poorly prepared and did not have expert support.

My client was well prepared, did his homework and called me to give expert evidence.

My evidence detailed the defects and the cost to rectify and my arguments and the quantum of damage was mostly accepted.

My client was fortunate enough that his case was so strong and the builder’s position so weak that he also managed to get a refund of his expenses for my reports and my  attendance, in the award.

The moral of this story?

If your cause is just and you are well prepared and well supported you will have a great chance of prevailing. Do not allow yourself to be outgunned.

 

 

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Swimming pool safety, is yours five star safe or five skulls drowning risk?

Just yesterday I inspected a nice home (pre purchase inspection) with a pretty swimming pool. It was almost picture perfect but on closer inspection this is what I found:

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IS YOUR SWIMMING POOL FIVE STAR SAFE

If you think I am over the top then imagine you are the owner and the child drowned (heavens forbid), you are sitting in a witness box charged with criminal negligence trying to explain why your swimming pool did not comply with regulations and why the gates were not maintained.

Good luck!

Just for good measure I also have found evidence of skilful skirting replacement in an attempt to hide prior termite attack.

A competent pre purchase inspection is not just about the condition of your (biggest investment) but it could also save your life or the life of someone you love more than yourself.

 

 

 

 

 

 

 

 

 

 

 

 

 

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