kkiwibuild – what’s iwib uild – what’s kiwibuild – what’s iin it for … · 2018. 10....

OFFICIAL PUBLICATION OF THE BUILDING HUB www.buildinghub.co.nz

www.bobforbuilders.co.nz

THE BUSINESS OF BUILDING (FOR BUILDERS)

1E D I T I O N

20 1 8B I - A N N U A L

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Chemicals on-siiiiiiiiiiiittttttttttttttttteNasty buggers ouuuuuuuuut to get you

Word of Moutuutttth MarketingIs it really stiltill the case?

DisputessThey’re inevitanevitable, so what do youu do?

Alan’s RantThe slack industrtry approach to conssumer education

Chemicals on-siteChemicals on-siteNasty buggers out to get you

Word of Mouth MarketingWord of Mouth MarketingIs it really still the case?

DisputesDisputesThey’re inevitable, so what do you do?

Alan’s RantAlan’s RantThe slack industry approach to consumer education

KiwiBuild – what’s in it for you? (and why ((((annnnddddd whwe think you should support it)uld sssssssssupporrrrtttttt iiiit)

yKiwiBuild – what’s KiwiBuild – what’s in it for you?in it for you? (and why we think you should support it)

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ISSUE 1 :18 THE BUSINESS OF BUILDING 1

For Builders Who Want To Be Better www.bobforbuilders.co.nz

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WELCOME TO THE FIRST 2018 EDITION OF BoB

2018 IS GOING TO BE A YEAR THAT…

But what about Australia, 42 degrees in Sydney and

golf ball size hail stones in Melbourne on the same

day, but I hear you muttering "who cares", as you have

more important issues on your mind.

So you survived Christmas and are planning for 2018

with the new government laying down the gauntlet to

the residential construction sector to build build build

houses. More information will be released encouraging

you to get involved and be creative, but the focus will

always be on speed and affordability.

In this edition we have identifi ed the pitfalls that have

to be resolved in the availability of land, materials and

the necessary skills needed to meet this massive infl ux

of building projects. I doubt the housing industry will

be the same as in previous years or ever again with

the expectation of building all those extra houses to

meet the government's 10 years’ targets. Be alert

to those outside our industry who will be watching

and responding to opportunities as they see fi t.

Unfortunately there will always be the cowboys and

charlatans in our industry, so speak up if you see things

that are not right as we need to safeguard the public

and keep our image clean.

Water water everywhere but not a drop to…well in some

areas maybe, but what a variance we have had weather wise

with no real understanding of what might come next.

Alan Muxlow Quantity Surveyor

With this increase in

work, you may fi nd

materials harder to

source, lose staff who respond to other employment

opportunities or have to adapt to new products and

technology to keep up with the play. With the speed

of construction being a critical factor in all future

residential building, prefabrication alternatives will

become a major factor that cannot be overlooked.

All this requires you to have systems and processes

in place to run your business effi ciently and be ready

to cope with challenges. Note I have called these

challenges, not problems or diffi culties, as resolving

issues is a learning process in itself which makes you

better prepared for the future. Other articles in this

edition give you insights into running your business,

roles of different parties, dispute processes and many

more ways to improve or refocus your business.

I hope you have the opportunity to participate in the

government’s focus to improve the social housing

needs of our society and make NZ a better place to

live, a win win situation for everybody.

THE BUSINESS OF BUILDING ISSUE 1 :182

CONTENTS

LBP SKILLS MAINTENANCE RECORD OF

ACTIVITY

hours spent reading BoB 2018 | 1

Tic

k a

s re

ad

LATEST HINTS AND TIPS 5

NEWS 6Noise on a building site *

Building warranty insurance *

Building Hub *

Dodging dangerous chemicals on-site *

Builders building well; could do better *

New online tool launched *

COVER ARTICLE 16Where there’s a will there’s a way: Kiwibuild *

FEATURES 20Strong growth forecast for building industry bucks history *

The myths of ‘word of mouth’ marketing for builders *

Disputes will happen – here’s how to deal with them *

The technology of energy effi ciency *

No one tells you… *

Demolition (and construction) by robots *

ALAN'S RANT 38

The Business of Building is published by Aim High Publishing Limited.

The contents of The Business of Building are copyright and may not be

reproduced in any form without the written consent of the publisher.

The Business of Building and Aim High Publishing Limited disclaim

responsibility for any statements made by advertisers or appearing in

articles. Printed by Image Centre Group.

Websites: www.bobforbuilders.co.nz

www.buildingguide.co.nz

Email: [email protected]

Phone: 09 360 8885

Fax: 09 360 8887

PO Box 44412, Pt Chevalier, Auckland 1246

Publisher: Mark Graham

[email protected]

Editor: Alan Muxlow

[email protected]

Production Manager: Tracey Sumich

[email protected]

Design: [email protected] points claimed:

(1 hour = 1 point)

ISSN 2230-5459



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LATEST HINTS AND TIPSTOP 6 TIPS FOR GOOD TERMS OF TRADEIt is mandatory to have written terms of trade for all building projects valued at $30,000 or more. Even where the value of a project falls under this threshold, we recommend having written terms of trade for ALL building work.

All good Terms of Trade should include the following

6 matters:

1. Who are you contracting with? If parties are not correctly recorded you may not be able to enforce the contract.

2. What is the scope of the building work? Clearly describe the nature of the work required and being provided. Where the building work has a value of over $30,000 you are required to be very specifi c.

3. How will the work be carried out? Describe what will be done, and clearly describe how it will be done.

4. How much will the work cost? This may be an agreed quote or estimate, or simply a method for determining cost. Whatever the arrangement, make sure it’s recorded in your contract.

5. When will you be paid? Be clear about when payment is due in your contract – do not rely on terms of an invoice.

6. Your agreement is signed and dated by all parties. Mandatory where the work is valued at more than $30,000 but good practice for any contract.

The Building Hub has easy to use contracts free on our website for members. It also makes it easier for us to help if you end up in a dispute if you are using our contracts.

WITHHOLDING TAX FOR CONTRACTORSDo you employ contractors? If you do and they are

employed as labour only workers you need to be taking

out withholding tax from their payments (referred to as

schedular payments).

The standard rate is $20%. However, if their hourly rate is quite

low, we recommend your contractors use our online calculator

to determine a more appropriate figure. This requires your

contractors to estimate their annual expenses.

When assuming annual expenses of $14,000, you will need

to be receiving $105,000 a year in schedular payments to be

paying a tax rate of 20%. If you are getting paid $25ph for a

40 hour week for 45 weeks a year (4 weeks holiday, 2 weeks

public holidays, 1 week sick) then your suggested tax rate is

actually lower than the minimum at 9.9% so it would be 10% (the

minimum).

If you are a contractors and work for other building companies,

you need to make sure you understand your expenses when

accepting work and actual hours you will be paid. To get a real

idea of your hourly rate you will need to take the income you will

receive over the course of a year, subtract ALL work expenses and

then divide that by 2080 to equate the value to a person on salary.

THE BUILDING HUB APP Not long to go now and the Building Hub app will be ready!

This is just the fi rst phase with some easy ways to get your paperwork nailed. We keep coming up with cooler ways to stop you having to do admin.

An example; you want to load a worker, if they are licensed, we already have many of their details, so all you have to do is put in their BP number

and the details we have magically appear!

What if a builder's training details etc. travels with them? You employ a builder, all their training details loaded by their previous employer travels

with them so you don't have to fi ll it all in again. Why bother about training details? Because it is important for your health and safety procedures.

It's all connected. That's where we keep seeing opportunities to make this even easier. If there is anything we can fi ll in for you, we are doing it.

Faster, easier, smarter. That's what the app is all about.

CHARGE OUT RATES - GET IT RIGHTJust a reminder to make sure your charge out rates are

where they should be:

If you set your rates too high you could lose work, if you set

them too low you could go out of business. Here are three tips

to remember when re-evaluating your charge out rates.

1. Calculate ALL your expenses

When you calculate your expenses make sure you include EVERYTHING you do and spend on the business. Include the hours you spend quoting, chasing debt, site visits to discuss potential work, and don't forget to include the time you spend fi ling forms for a CCC. This one is often overlooked.

2. Have an accurate number of chargeable hours

Once you take off annual leave, public holidays, sick leave, gaps between jobs, rain days, delays out of your control etc. you will fi nd that there is often only 40 weeks or 200 work days a year. If you work more than 5 days a week this should be at your benefi t and be above the hourly rate you calculate, not part of it. If you work more than 8 hours a day the same thing applies

3. Your risks and liabilities

We all know that being a builder carries substantial risk and liabilities. This is important to remember when you are calculating your charge out rates. Building is a very physically demanding job which leads to munted knees, fi ngers, shoulders etc. This needs to be compensated for in your income. Same with the liabilities.

It is your most important business decision, getting your charge out rate right. It will make the difference between feeling good about what you have achieved and not. And feeling good about what you do is essential to your continued performance on the next job.

TEN STEPS FOR HAZARDOUS SUBSTANCESThe list below may seem daunting: But for many of you there will not be suffi cient quantities or substances to warrant all the actions below.

Focus on keeping a register, assessing the risks of each product,

training all workers on the contents of the Safety Data Sheets,

storing and disposing of containers and waste appropriately,

and supplying the right PPE.

1. Keep an inventory (Register).

2. Use — and share — safety data sheets.

3. Conduct a risk assessment.

4. Inform and train your workers on how to handle

hazardous substances.

5. Prepare for hazardous substances emergencies.

6. Correctly label containers of hazardous substances,

including hazardous waste.

7. Install warning signs in appropriate places for workers

and visitors.

8. Make sure storage areas and containers are safe.

9. Take care with hazardous waste.

10. Provide suitable protective gear and equipment.


NEWS

Many construction and demolition activities are

inherently noisy. However, noise generated during

construction, maintenance and demolition work is

generally of a temporary nature. Provided ongoing

noise does not occur at inconvenient times, the adverse

effects can generally be avoided or mitigated.

NZS 6803:1999 Acoustics – Construction noise allows

for the production of signifi cant noise between the

hours of 7.30am to 6pm during weekdays. The standard

also contains provisions relating to:

• the measurement of noise from construction,

maintenance and demolition work

• the assessment of such noise to determine

whether action is required to control those noise

emissions

• In the event of non-compliance, action can be

taken under the appropriate sections of the

Resource Management Act.

Construction noise: Know the limits

Lmax is the maximum level measured over a time

period, but it is not the same or not as high as an

individual peak level

To help reduce building noise, consider:

• limiting work hours

• selecting quieter equipment or use alternatives

• carrying out work as far away as possible from

neighbours and away from sensitive areas such as

bedroom windows

• regularly servicing equipment – lack of

maintenance can cause higher noise levels

• erecting a solid fence or barrier

• installing an acoustic enclosure for fixed

equipment such as compressors or vacuum

equipment

• modifying equipment – discuss this option with

the manufacturer or installer.

NOISE ON A BUILDING SITEBy Mark Graham

L10 is the noise level exceeded for 10% of the time of the

measurement period. For example, a noise limit of L10

75 dB(A) means that, over a period of 1 hour, the noise

from construction activities can only exceed 75 dB(A)

for a total of 6 minutes or 1 minute over a period of 10

minutes.

L95 is the level exceeded for 95% of the time

and represents the background level without any

construction noise present.

If noisy work is planned, such as jack hammering,

concrete cutting and pouring, discuss this with nearby

residents beforehand. A sign on-site or distribution of

leafl ets explaining the hours and duration of operation

may help prevent complaints.

Reprinted with permission from BRANZ

Mark GrahamPublisher of the Building Guide, Design Guide and BoB for builders.

www.buildingguide.co.nz | www.designguide.co.nz

NZS 6803:1999 sets out recommended upper limits in dB(A) for construction work noise in residential areas:

Weekdays Saturdays Sundays/Public Holidays

L10 L95 Lmax L10 L95 Lmax L10 L95 Lmax

6:30–7:30pm 60 45 70 . . . . . .

7:30–6:00pm 75 60 90 75 60 90 . . .

6:00–8:00pm 70 55 85 . . . . . .

8:00pm–6:30am . . . . . . . . .



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How would you like a warranty that doesn’t seek any monies from you in the event of major problems?

Under the Building Act, builders and developers are liable for defects for up to 10 years. The Stamford warranty ensures that if a claim is payable within years 3-10 of the policy term, we will not seek to recover anything from the builder, even if his defective work caused the problem. This greatly improves your fi nancial security.

Stamford Insurance has a range of Building Warranty Insurance policies to provide 10 years’ protection against major structural defects, including weather tightness issues, for construction projects in New Zealand..

All Types of Projects can be insured:

• Individual homes

• Townhouses, duplex and multi-unit complexes

• Apartment buildings

• Commercial and mixed-use developments

• Renovation, conversion and re-clad projects

Advantages for the Builder:

1. Most other guarantees only cover the homeowner for defects which are the builder’s fault - the Stamford Warranty goes further by covering you too.

2. The Stamford Warranty is superior for your customers and far better for you as the builder/developer.

3. The Stamford Warranty covers all defects with no proof of liability required.

SO WHO ARE STAMFORD INSURANCE?They are insurance professionals and Coverholders at Lloyd’s of London.

Lloyd’s is the the world’s leading specialist Insurer and carries an ‘A’ rating from all the major rating agencies – that means Stamford’s policies are underwritten by a market-leading insurer with an undoubted reputation stretching back over 300 years.

WHAT DOES THE POLICY COVER?The Stamford 10 Year Warranty provides the widest cover in NZ.

Finally… a Building Warranty available to ALL builders that does what it says

It covers All Defects in the fi rst 2 years and then Major Structural Defects including Failure of the waterproof envelope for a further 8 years due to:

• Defective design or specifi cation

• Failure of products and materials

• Defective workmanship

And it also covers:

• Loss of Deposit or Failure of the Builder to Complete the build (if required)

• Cost of renting Alternative Accommodation whilst repairs are carried out

• Professional Fees in the event of a claim

Key Benefi ts:

• Provides a fi rst response policy directly to the Owner or the Body Corporate

• Improves the value of the property, market perception and your reputation

• Helps achieve sales faster

• Protects the Developer against defects claims from the date of PC

• Protects the Builder against major defects claims in years 3-10

• The insurers deal with the problem and fi nd the solution – no need for litigation

• Independent management of all claims by loss adjusters

• Transferrable to a New Owner on Sale at any time within 10 years

• Projects of any value can be covered

• No Trade Association involvement or high ongoing annual fees

So if you’re still using a guarantee that doesn’t provide you with all of this, the Stamford Building Warranty is for you.

Stamford Insurance – delivering security and peace of mind

For more information or to make contact go towww.stamfordinsurance.co.nz

NOT INSURED INSURED WITH LLOYDS

NOTIFICATION & INVESTIGATION

Owners must carry out their own investigation, perhaps

employing professional surveyors at their own expense to

determine the cause of the loss.

Insured notifi es a claim and insurers appoint independent

loss adjusters (at their own expense) to investigate the claim

and determine remedial action.

CLAIM & LITIGATION

Owner makes a claim against the party responsible (if they are

still in business). This may involve lengthy negotiation, even

litigation to achieve a result. All the time, the building may continue

to deteriorate. Owners will usually reach a negotiated or legal

settlement for less than the full cost of the works.

If it is a valid claim, the insurers will pay for 100% of the loss,

subject to a small excess. They have every incentive to remedy

the defects quickly as their costs will only increase if there is

any delay in carrying out repairs.

REMEDIATIONThe owner must then execute the works, employing their own

professional team and contractors with all the risks that that involves.

Insurers appoint professional project managers and

builders to undertake repairs.

ALTERNATIVE ACCOMMODATION

Owners must make their own arrangements.The policy pays for up to 26 weeks of comparable

alternative accommodation.

AFTER COMPLETION The owner still has a property without any warranty in place. The building is still covered by Lloyd’s for the balance of the 10 years.

If you were to design the perfect Building Warranty, it would be a genuine, first

response insurance policy which protects your clients against the problems associated

with building defects without having to prove liability – and one which also protects you!



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AS OF 1 JANUARY 2015, IT IS MANDATORY TO HAVE WRITTEN BUILDING CONTRACTS FOR PROJECTS WORTH $30,000 OR MORE.The Building Act 2004 (“the Act”)

has been amended to require building

contracts to contain certain minimum

content. You can be fi ned $2,000 if

you don’t comply with some of the

requirements of the Act over and

above doing a project over $30,000

without one at all.

The Building Hub, with Rainey Collins

Lawyers, has developed simple and

easy to use contracts for its members

that include all information required

by the Act. These contracts are free

to use as long as you are a current

fi nancial member of The Building Hub

(If you are not, you will be in breach

of the Building Hub’s copyright and

the terms under which the contracts

can be used).

You should always read and

familiarise yourself with any contract.

If you are in any doubt, you should

seek legal advice. If you do not have

a current lawyer we suggest calling

Rainey Collins (partners of The

Building Hub) on 04 473 6850.

WHY HAVE A CONTRACT?

If the building work you are

undertaking will cost $30,000 or

more, it is mandatory to have a

building contract. If you do not have

a contract in place and the building

work is worth more than $30,000,

the Act sets out the terms of your

contract. The terms set out by the Act

are more advantageous to the client

than the terms under our contracts

(which are more advantageous to the

builder). We recommend a contract

even for smaller jobs – it just makes

everything clear so there is no

misunderstanding.

Contracts are important for clearly

defi ning who is responsible for what,

when things are going to happen,

how things are going to happen, and

at what cost. Contracts also explain

what is to happen when there is a

dispute between the builder and the

client. According to a BRANZ survey,

75% of new builds had call-backs due

to defects, and one in six had disputes

over the fi nal cost. When you include

renovations, the disputes climb to one

in every four builds.

This alone should be a driving

factor for building contractors to

use Building Hub contracts for

everything.

INVOICING THE CLIENT DURING THE JOB

If you are going to be invoicing the

client during the job, you need to

understand how to use Payment

Claims and Payment Schedules.

A Payment Claim is essentially

the invoice. We have a Payment

Claim form that you can use which

is accessible via the Building Hub

resources.

The contracts provide for Payment

Claims to be determined either

on a percentage basis or by work

completed to the date of the Payment

Claim. You need to identify in the

Specifi c Terms of Contract how

you intend to determine payment

claims. If you do not select an option,

the Contract provides a default

position – that Payment Claims will be

determined based on work completed

to the date of the Payment Claim.

You need to identify in the Specifi c

Terms of Contract how many Payment

Claims you expect to make. For

example, if you expect the building

work to begin on 1 February and

be completed by 1 June and you

intended to submit a Payment Claim

on the fi rst of each month, you would

note in the specifi c terms of contract

that you expected to make four

Payment Claims.

The Payment Claim forms give you

space to describe the work you are

claiming payment for as well as any

variations which have been agreed to

and recorded in writing.

When you submit a Payment Claim

to a client, you need to also provide a

blank Payment Schedule for the client

to complete and submit to you if they

dispute the payment claim.

If a client asks for an explanation

of Payment Claims, you could say

something like this…

“A payment claim is basically an

invoice which describes what we are

claiming for at that time. As this is a

large job, you need to make progress

payments as we move through it.

This is done by us providing you with

payment claims on a regular basis,

and you paying them.

If you disagree with, or dispute, a

payment claim, you can respond

with a payment schedule (which we

will supply to you along with each

payment claim). When submitting a

payment schedule, you need to state

what it is you are not happy with,

what portion of the payment claim

you agree to pay and when, and

how you calculated the difference

between what was claimed and what

you are proposing to pay.

If you are satisfi ed with the work

claimed by the payment claim, all you

need to do is pay the claim by the

due date.”

If you have a residential building

project that is likely to cost close

to, or over $30,000 (inc) then you

MUST have a building contract with

the person or business who will be

undertaking the building work. At the

Building Hub we strongly recommend

having a contract for ALL building

work irrespective of the value. The

contract will set out the work to be

done, when and how that work will

be paid and what will happen if either

party default on the contract.



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Symptoms of silicosis include:

• shortness of breath following

physical exertion

• severe cough

• fatigue

• loss of appetite

• chest pains

• fever

• cyanosis (bluish skin)

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Silicosis and symptoms

Silicosis is a very unpleasant disease caused by

excessive inhalation of fi ne dust. It is more familiar

to miners than to builders, but it presents a real

threat on the building site. Smoking makes it

worse, and there is no cure: in acute form silicosis

sufferers may die within a year, after their lungs

have ceased working.

Silica is a component of concrete, brick, stone, sand

and clay. Linea Board packaging comes with plenty of

warnings and advice on correct use; handled properly,

the product itself is not harmful, so it’s up to the user

to take appropriate precautions. Cutting, breaking,

drilling, hammering, grinding and chipping can all

cause fi ne silica particles, so you need to take steps

on-site to protect yourself.

Whether you are an employee or employer, you need to know about

dangerous substances. Three particular nasties are silica, asbestos, and

methamphetamine or P.

DODGING DANGEROUS CHEMICALS ON-SITEBy Mark Graham

Unfortunately, there are occasions when insuffi cient

safety equipment is used (or provided) and this is

especially dangerous when working inside due to bad

weather as dust doesn’t dissipate. Employers have a

legal duty to protect their workers.

Asbestos cancers and symptoms

Asbestos cancers are caused by the inhalation or

ingestion of asbestos, a fi re-damping substance

that was formerly used in a number of products

in construction, including fi brolite cladding and

roofi ng, vinyl fl ooring and insulation, and textured

ceilings. Lino fl ooring had asbestos backing into

the 1980s and in some cases into the 1990s.

Left alone, these components can be reasonably safe,

but when disturbed, such as during a renovation, they

can become dangerous. Sanding back an asbestos

fl oor is particularly dangerous, as is removing a

textured ceiling.

When asbestos fi bres enter the body, they can cause

genetic changes in healthy cells, resulting in cancers

such as mesothelioma (for which there is no cure). In

the United States, the Environmental Working Group

estimates that between 5,000 and 10,000 asbestos-

related lung cancer fatalities have occurred each year

over the past two decades.



apart, and be sure to wear appropriate protective gear

when working in potentially dangerous situations. And

if you suspect dangerous products may be present,

have them tested.

The Worksafe New Zealand website offers a wealth

of information on safety on-site: http://construction.

worksafe.govt.nz/



Symptoms of mesothelioma

include:

• pain in the lower back or at the

side of the chest

• shortness of breath

• fl uid in the area around the lung

• cough

• fever

• excessive sweating

• fatigue

• weight loss (without trying)

Acute exposure to meth lab chemicals

can cause:

• shortness of breath

• cough

• chest pain

• dizziness

• lack of coordination

• chemical irritation, or burns to the skin, eyes,

nose and mouth

• death in cases where there is exposure to

a particularly toxic chemical or the person

exposed is particularly vulnerable

Do yourself a favour and get checked out if you have

any of these.

Potential health risks from P labs

The dangers presented by the drug P –

methamphetamine, or meth – cannot be overstated,

and the threat is so much greater because of its

it and charges more for decontamination. But as

she admitted, ‘Currently, like any company offering

cleaning services, these companies are subject to the

Fair Trading Act, which makes it illegal for traders to

mislead consumers, give them false information or use

unfair trading practices.’

It therefore pays to think before you start pulling things

enduring presence in houses that have been used

as clandestine manufacturing labs. The greater the

exposure, the higher the health risk. Entering a house

used as a P lab before it’s been decontaminated can

be very dangerous. And even after decontamination,

the demolition and renovation work can raise dust

containing potentially lethal quantities of chemicals.

Chemicals may enter the body via inhalation,

ingestion (for instance, eating dust that has settled

on your sandwich), or absorption through the skin.

Exposure may be acute (short-term) or chronic

(accumulative over a long term).

Chronic exposure to meth lab chemicals or by-products

may cause both long- and short-term health issues. Long-

term exposure to volatile organic compounds may result

in liver and kidney damage, neurological problems, and

increased risk of cancer. Even at low levels, prolonged

exposure can result in serious health risks.

In an interview on Radio New Zealand in 2015,

then MBIE consumer issues team leader Joanne

Kearney admitted there was no regulation of the

meth contamination testing and clean-up industry.

Consumers may be at risk of losing out if the testing

agency either fails to detect a problem, or aggravates


Other key takeouts are:

• 35% of home owners choose

their builders from the quality

of their showhome first,

around the same from a referral from friends/family/

designer, and advertising was used by 15% (though

‘other’ was at 20%, whatever that was).

• Quality/Reputation of the builder was the most

important criteria, with Fixed Price/Price Certainty

the second.

• 13% of home owners had a dispute over cost (more

evidence of poor communication?) with the more

expensive homes have fewer issues.

• 80% (Canterbury) to 85.6% (Auckland) had

callbacks to fix defects, and customer satisfaction

with getting defects repaired, while improved, still

sits at barely satisfactory.

You can get your own copy here:

http://bit.ly/bldrsatis2016

Home owners rating their builder good or excellent

(4 or 5) was 67%, up 3% on the previous survey.

Overall Quality, fi nish and value were the top levels

of satisfaction.

That’s the good news.

Builders are still slack at returning to fi x defects once

the house is fi nished, with 30% of home owners being

unhappy with their contractor’s performance.

The other area showing most dissatisfaction was

communication.

Given the second most important job sourcing activity

was referrals, these two elements placing last in terms

of satisfaction can only mean builders are doing

themselves out of new jobs – let’s face it, it you don’t tell

your client what’s going on, and then don’t come back

to fi x problems, how likely are they to refer you on to

friends and family?

Key take outs from the latest BRANZ New House Owners’ Satisfaction

Survey (2016) have some good news for the industry – we’re getting

better. A bit.

• Housing, alterations and small buildings contract (NZS

3902:2004) – a plain English standard building contract.

• Thermal insulation – housing and small buildings (NZS

4218:2009) – helps establish the levels of thermal insulation

for houses and small buildings.

• Interconnected smoke alarms for houses (NZS 4514:2009) –

provides information about the placement and audibility of

smoke alarms.

• Safety barriers and fences around swimming pools, spas and

hot tubs (NZS 8500:2006) – describes barriers for residential

pools including ways to assess their strength.

• Handbook on timber-framed buildings (selected extracts

from NZS 3604:2011) – figures and tables to help design and

construct timber-framed buildings up to three storeys high.

Building CodeHub helps you to access what you need to design

and construct buildings that comply with the Building Code.

Go here: codehub.building.govt.nz

Building-related Standards on the Standards New Zealand

website has the Standards and further information. Go here:

standards.govt.nz/sponsored-standards/building-standards

MBIE recently launched a new building system search

engine, Building CodeHub, which helps people locate the

latest building rules and guidance information for designing

and constructing buildings. In addition, fi ve commonly

used building Standards and a handbook are now free to

download from the Standards New Zealand website.

By making it easier for people to access building-related

documents, MBIE hopes to see improved compliance with

the Building Code, and more importantly, safer homes and

buildings.

MBIE will continue to make the building system more

accessible and is considering ways to improve access to

more design and construction building standards.

The fi ve Standards and handbook are:

• Design for access and mobility: Buildings and

associated facilities (NZS 4121:2001) – provides

solutions for making buildings and facilities accessible to

and usable by people with disabilities.

Building CodeHub Launched – we recommend you bookmark

it in your web browser and use it!

NEW ONLINE TOOL LAUNCHED

BUILDERS BUILDING WELL; COULD DO BETTERBy Mark Graham



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This impacted on the poor more than anyone else as

the rich and middle-class bought down and those with

less to spend, and fi rst-home buyers, were forced out

as prices took off due to a shortage of supply. Once the

housing market exploded, short-term investors (almost

all New Zealanders according to research) climbed in and

prices accelerated further.

And now here we are, post-election, with the Labour-led

coalition looking to implement their signature ‘Kiwibuild’

proposal to resolve a shortfall estimated at around

77,000 homes, by building 100,000 homes over and

above normal building activity in the coming ten years.

It’s a big ask.

Our belief, however, is that “Where there’s a will there’s

a way” and we hope that becomes the attitude that will

be applied to support the future endeavours for this

government to resolve the housing crisis, although we

acknowledge it won’t happen overnight. And even if we

don’t hit those numbers, KiwiBuild will do two things:

1. It will end up at least making a significant impact

on the shortfall – much more than the ‘Special

Housing Areas’ ever were going to, and…

2. It will support a building industry that would

otherwise likely go into another ‘bust’ period.

But let’s set the scene

Affordable Housing and Social Housing are not the same

thing.

Affordable Housing is available for private ownership, but

at a price that people can realistically afford – usually set

at around 3x annual household income. That would make

a new house affordable at $300,000 as the average

household income is $100,000 per year. Unfortunately,

in Auckland and Queenstown, the average house value is

about $1,000,000.

The primary driver of this is the cost of land. If a section

is worth a lot, there’s no point building a small, cheap

house, so you get an expensive house built on an

expensive block of land, and people on lower-incomes

can’t afford to buy them.

Social Housing is owned by the State and made available

to people who can’t otherwise

afford market rents. Sometimes

they’re sold to the tenant

through different schemes,

including rent-to-buy. It’s very

likely that your own parents

bought their fi rst house in this

way.

Introduced by the Labour government post-World War 2,

the original State House programme created jobs,

provided badly needed, good-quality housing at a

moderate rent and even the opportunity to purchase

these houses at the initial building stage.

The original developments were located in designated

areas with limited individuality in design. Two basic

concepts were developed: single-storey individual

housing and two-storey apartment blocks.

Funding for maintenance for aging buildings has always

been an issue, not helped by repairs needed because

of certain tenants’ attitudes to their accommodation,

but more so in recent years as the National government

didn’t see government having a role in providing housing

for poor people.

Now the traditional state house model is changing. The

state-owned houses are mixed in with privately owned

properties, making it impossible to tell which is a social

house and which is in private ownership. And that's

deliberate – to remove the stigma traditionally attached

to social housing.

Also, what we’re building is changing. There’s less

demand for traditional 3/4 bedroom houses as the

makeup of households changes. There’s more of a need

for 1/2 bedroom homes, and 5 + bedroom homes – less

in between. And, of course, there’s a move to higher

density, with townhouses and apartments becoming

more common. This will accelerate in all our cities.

There’s an unquestionable need for more houses and

it’s clear inadequate housing impacts on children’s

health (and ours), which results in a drain on our health

services and more – education outcomes, poverty and

crime – it all starts with inadequate housing. KiwiBuild

will have a huge and positive impact on New Zealand,

not to mention make sure you have a job for years to

come!

The Housing Crisis became one the major election topics well before the election. National lost the ball during the GFC when an already shortfall of housing turned into a crisis as the building industry collapsed post-2008. National’s faith that the ‘Market’ would eventually fix everything proved to be misplaced.

COVER ARTICLEWHERE THERE’S A WILL THERE’S A WAY Alan Muxlow and Mark Graham look at Labour’s

KiwiBuild programme and how it’s going to affect

the industry.



So what are the promises?

The Government will make these forecasts a reality by:

• delivering 100,000 affordable homes through

KiwiBuild

• building more state houses, rather than selling off

the ones we have

• ensuring there is enough skilled labour, through

immigration settings and training initiatives

• freeing up land supply

• enabling infrastructure financing

• enabling higher productivity in the building

industry.

“The Government’s housing package will deliver

more affordable homes, more state houses, improve

the quality of rentals and security of tenure, and tilt

the balance in favour of homebuyers, rather than

speculators,” said Phil Twyford, the new Minister

of Housing.

Twyford outlined how there would be three ways the

Government would implement KiwiBuild:

1. Stepping into already-under way schemes like

Hobsonville Point and securing a large number of

planned new residences there;

2. Buying off-the-plan units in planned

developments like new high-rise Auckland CBD

apartment blocks;

3. Creating its own development sites and bringing

in group house builders, particularly on Crown-

owned land.

Apartment/terraced housing developers and fi rst-

home buyers struggle to get bank funding but he said

KiwiBuild could be a huge assistance, taking off-the-plan

units before construction started.

The Government will under-write or buy

off-the-plan dwellings in new private

developments, e.g. Hobsonville Point, by

purchasing 30 to 40 per cent of the terraced

homes and apartments that fi t the KiwiBuild

criteria. Buying off-the-plans is thereby

guaranteeing high-quality affordable homes

and we would then on-sell them to fi rst

home buyers. That would de-risk many

developments, and solve the problem

fi nancing has been for fi rst home

buyers and for developers.

The rationale for KiwiBuild is that

the market on its own has really

struggled to deliver affordable

homes. KiwiBuild aims to deliver

medium-density townhouses and

terraced housing for $500,000

and under and stand-alone

homes, mostly on the fringes

such as Auckland's north west

and the south, for $600,000.

Phil Twyford in his 1st

December speech stated:

We are going to put the state

back into state housing.

Our Government rejects the view that state housing

is a redundant idea from the 1930s and that

modernisation means selling off the houses and

getting charities and the private sector to do this

work instead.

Given the state of the housing market right now,

it should be clear to anyone that state housing –

decent, secure, income-related rental housing for the

people that need it most – is needed more than ever.

Our Government will not milk Housing NZ for profits.

We will reinvest any surpluses back into the building

of new homes and upgrading existing ones.

We will stop the mass sell-off of state housing.

I want Housing NZ to be a world class public housing

landlord.

Government has also recognised they alone do not have


This inevitably fl ows into the building market – Rodney

Dickens, from SRA Consulting, has shown a clear

correlation between the housing marketing and building

activity. So after years of ramping up resource to meet

growing demand, there is a good chance that demand

will fall away.

What KiwiBuild will do will replace the falling demand

with a major works programme that will need enormous

numbers of builders and tradespeople. Your job, should

you wish to keep it, is looking pretty secure for the next

ten to fi fteen years, at least, regardless of the number of

robots entering the market.

More than this, however, is that this huge social

housing programme rolling out will mean poor people

moving into quality housing and out of cars. It should

mean better targeting housing, too, instead of single

occupants in three bedroom houses on large sections,

or families with fi ve kids crammed into the same sized

dwelling, poorly maintained dwellings where diseases of

poverty, like rheumatic fever, appearing in New Zealand

is a terrible indictment on our society. This should not

be the case in our country and maybe this is a chance to

eradicate this blight.

all the answers and so have formed a panel of experts to

do a housing crisis stocktake. At the time of writing, this

report had not yet been released.

What are the major challenges?

Land has always been a problem.

Firstly, metropolitan limits around cities have been

identifi ed as a major problem. Land values outside the

limit is a tenth the value of land inside, and the limit

ensures there’s only so much available. Critics of this

view point out that despite the limit, there’s plenty of

land available inside the boundary and we’re still not

building enough.

There are some investors who are ‘land-banking’

– holding onto large tracts of land without

developing. And there’s some logic to this – there

are rates to pay, but they’re relatively minimal,

and the value of the land in the past few years

has been increasing in a spectacular fashion, and

the owners haven’t had to do anything to enjoy a

huge increase in their personal wealth so why go

through the pain and stress of developing? The

Government has threatened to impose penalties

for no development to overcome a shortfall

in some areas, but it would likely not be very

popular – at least, not for the land owners (but

they aren’t likely Labour voters, anyway).

Materials are already a problem in some areas,

particularly keeping up with demand for timber

and concrete. Unfortunately, as we all know, as

demand grows, price does too.

Skilled labour shortage is probably the biggest factor

of the three. The government has already made the fi rst

step for new learners a lot easier by offering free tuition

for the fi rst year of study, but we have a shortfall now

and will do despite ramping up apprenticeships.

Responses

1. Prefabrication, including importing component

parts (many villas in New Zealand were built

this way)

2. More consistent house designs

3. Ramping up Group Home Builders

4. Special immigration categories for tradespeople

5. New higher density housing typologies

What next?

A ramped-up state house building programme is going

to mean an ongoing demand for trades and most people

in related industries.

As we near the peak of the current housing cycle (see

the interview with Rodney Dickens in this issue) there

is every possibility that there will be a downturn, or

at the very least, a plateauing in the housing market.



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Building activity should have a corresponding fall,

too, as this sector is closely tied to the health of the

housing market. Last time this happened, post the

GFC in 2008, the building sector saw a 60 % drop in

demand and a huge exodus of skilled staff. That didn’t

leave us in good shape for the boom that started fi ve

years ago – and we’re still playing catch up.

So, less demand and more expensive borrowing

means house prices drop or stagnate. And that follows

a pattern we’ve had in New Zealand for decades,

where house prices generally follow seven years'

growth and three years' plateau.

We’re entering that seventh year of

growth in New Zealand now and, we’ve

seen some wobbles over the past year.

We’ve had Brexit, Trump, our own

election, and tightening Loan Value Ratio

rules put in place by the Reserve Bank

(meaning you need a higher deposit to

buy, especially if you’re an investor).

All that is now compounded by a general

tightening of lending criteria from the Aussie-owned

trading banks (caused by exposure to the Australian

apartment market which seems to be tanking) which is

impacting on house buyers and developers alike.

“In past years the banks have just shovelled out

money into a runaway housing sector right up to the

point where the bubble bursts,” says Dickens. “This

time, they seem to have learnt from the GFC and are

actually tightening up before there’s a big correction.”

Motu Consulting released research earlier this year

that confi rmed a pattern of fi rst Auckland and

then regional New Zealand centres following on

from Australian cities’ housing market. Sydney and

Melbourne markets,

notwithstanding

oversupplied apartments,

are still going strong, so

New Zealand may yet

have a bit of life in the run yet.

So what’s that got to do with Building, then?

Dickens has done extensive research that shows a

strong correlation between house prices and building

activity. House prices go up, activity follows six-12

months later. Likewise, house prices go down, building

follows suit.

So normally a slowing housing market would mean

a downturn in the building sector, but that may not

happen this time around.

“Labour has changed the game,”

says Dickens. Labour’s ‘KiwiBuild’

programme, an ambitious goal of

building 100,000 new homes across

the country over the next ten years,

with 40% in Auckland, will likely keep

the building industry pumping, even if

Labour’s ambitious targets are missed.

Simon Wilson from the Spinoff reported

on a recent construction industry conference:

“…Labour wants to build a lot more houses, use government investment to smooth out the boom and bust cycles of construction, scale up the building programme to provide more reliability, upskill the local workforce.”

So there’s political will to invest strongly in the

building sector. But what is going to change is the

different kinds of housing we build.

We desperately need more affordable housing.

But because the cost of land is so high in areas

where demand lies, it’s simply uneconomic to build

a relatively cheap house, so we continue to build

Both of the two main drivers of the housing sector - net migration and Interest rates – are going to come under pressure in coming years, says Rodney Dickens, director of SRA consulting. As the housing market slows and potentially even drops, that should see house price inflation drop away and houses become more affordable.

STRONG GROWTH FORECAST FOR BUILDING INDUSTRY BUCKS HISTORY By Mark Graham

Labour has

changed

the game…



Employment’s report to the new Minister of Housing,

Phil Twyford, there’s a lot of homes to build – and

that’s on top of the 22,000 per year we need just to

stand still.

And when we need many of those houses to be less

than half the current median price in Auckland, a

number of commentators, including Dickens, think the

key is to build on the outskirts of the city.

“Keeping a Metropolitan Urban Limit, even in its new

form of ‘Rural Urban Boundary’, creates an artifi cial

line around which land on one side is almost twenty

times higher than on the other – and high land prices

means you have to build expensive houses to make

money.

“If we open this land up to developers to create new

suburbs, it means we can build smaller, cheaper

houses on cheap land – and houses become

affordable again.”

This begs the question of infrastructure development

and the cost of travelling to places of work kilometres

away. And the council argues that the Future

Urban Areas – those earmarked for timed release

to developers – encourages planned infrastructure

building in a controlled, and therefore effi cient,

manner, rather than spotty patches that makes public

transport and utilities expensive to provide.

In fact, city planners actually want both types of

buildings – intensifi cation within the old Metropolitan

Limit and old-style ‘Vim Valley’ style homes in the new

areas on the outskirts of the city, with more planned

for within the old urban limit than outside. Either way,

building looks set for a prolonged period of ongoing

demand and activity.

Rodney Dickens is Director of SRA consulting, www.sra.co.nz, an independent economic consulting firm with a specialisation in the housing and building sectors.



McMansions, even though what we need is one and

two bedroom houses, and family homes that people

on lower incomes can buy. Larger Polynesian families

need fi ve bedroom homes, but because many are in

lower socio-economic groups, they can’t afford 300

square metre, three living-roomed, fi ve bathroomed

fully tiled monsters.

There is less of a problem in regional centres as

demand is not high (with a couple of exceptions like

Tauranga and Queenstown). Internal migration is away

from small towns to larger cities and immigrants are

drawn to the larger centres because this is where the

jobs are. And don’t think New Zealand is exceptional.

This is being seen all around the world, as are house

price increases throughout much of the Western

world.

But not in all cities. Those with much less constraint

on what can be built and where, like Houston, Tokyo

and Montreal, are seeing an abundance of housing

being built and that keeps prices low, hence Labour’s

policies.

Pre-fab housing, large suburban developments with

cookie-cutter homes, terrace housing, duplexes and

triplexes, town-houses and apartments are all the

future for our main centres. BRANZ estimates 60%

of new dwellings in Auckland will be medium density.

Builders will need to be skilled in this type of building,

which is different to stand alone houses.

Ironically, this type of housing is actually more

expensive to build, but if we build smaller and we build

at scale, so we can achieve economies, the cost should

come down.

So while boomers subdividing their large inner-city

suburban sections and building a new house on the

rear section, or putting up three or four townhouses

on their subdivided property may be a trend, it’s one

unlikely to contribute too much to solving the housing

shortage. A subdivided property that’s worth $1.5m is

still worth almost $1m afterwards – so building a cheap

house doesn’t make sense. We will get more housing,

but it won’t be affordable.

When you have a shortage of 65,000 homes, as

estimated in the Ministry of Building, Innovation and


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A lot of builders think all their jobs come from

‘Word of Mouth’ marketing. It begs the question, if

recommendations get builders jobs, how do dodgy

builders manage to stay in business?

The answer, of course, is that jobs come to builders

from a myriad different sources, even if it begins with a

recommendation.

Advertising is one – whether such traditional channels

as Yellow or newspapers, or newer media such as

Google Adwords or pop up ads on apps on your

phone. Signs on a building site, radio ads, or TV if you

can afford it.

And pretty much everyone these days checks you

out on the internet – they look

for your website, they look for

recommendations – even when

they’ve been referred on from a

friend.

So how do people fi nd a builder?

Referrals

The fi rst thing people do is ask friends for a

recommendation. Friends and family – who’ve they

used, who would they recommend. Not always the

best way – hence the staying power of dodgy builders.

The smart clients check those recommendations

out – starting with the internet and looking at the

builders’ websites, moving on to review sites like www.

builderreviews.co.nz, and then asking to view fi nished

jobs. Still doesn’t always prevent bad experiences, but

it will minimise the risk.

The single most important thing here is to do great

work. Quality, care and respect. If you don’t show these,

"Being memorable equals getting picked." - Jeffrey Pfeffer, Professor of Organizational Behavior at the Graduate School of Business, Stanford University and author of 14 books on successful businesses and businesspeople.

THE MYTHS OF ‘WORD OF MOUTH’ MARKETING FOR BUILDERSBy Mark Graham

www.builtin.co.nz



why would you expect anyone to recommend you?

The second thing here is to be fair, honest and easy

to work with. I know a really great architect who does

amazing work, but he’s got such a reputation for being

diffi cult that most of the work he does is for himself.

There’s no value in that, except in being memorable for

all the wrong reasons.

Showhomes

Many people head to Showhomes to see what building

companies can provide. Of course, these are going to

be the very best of their work with every imaginable

extra included, because they’re looking for a sale, but

it’s a very valuable tool for the larger companies.

But many people don’t necessarily have friends who

are builders or haven’t used one recently, and many

don’t want a cookie-cut solution for their new home, so

those avenues can often go nowhere.

So what’s the next option?

Traditional advertising

Firstly, people are exposed to advertising. It’s

estimated that you will get hit with up to 5,000

advertisements every day. Yes – that’s fi ve thousand.

And for those of you who think it doesn’t work – well,

why else would companies spend so much money to

get you to buy their product? And look at yourself –

what toothpaste do you use, what car do you drive,

what sports shoes do you wear? All advertised!

If you’re a large company then you can afford TV,

or radio, or newspapers to get your name in front of

people likely to be thinking about building. They’re

expensive because they reach a lot of people (almost

all who are not in the market for your services). The

ads are all about showing what a great job you do,

what happy customers you have, and how much they

can trust your company to do a great job.

The right magazines, like the Building Guide, can be

very good, too. It’s all about hitting the right people

when they’re in need of your service and specialist

publications like the Building Guide are perfect for this.

Brand advertising sets people up with a predisposition

to prefer that brand. It’s a long-term strategy that

takes a long time to pay off, but is very effective when

done well. Recent research shows that companies

that focus on immediate response-type advertising,

as most internet ads are, see diminishing returns over

years as their brand image gets frittered away. Think

Coke, or car brands.

Yes, they may have special offers on occasion, or new

models, but the tone of their messaging is consistent,

and they’re targeting a specifi c psychographic (what

people think), as well as specifi c demographics (how

much money they have, or their profession), and they

do it year after year – because it drives memorability

and desire and that drives sales. When you come to

buy something, you’ve already got a list of brands

you’re considering before you do research, because

you’ve been exposed to their advertising.

But if the client doesn’t want to use one of the big

group home companies to build their home, what do

they do next? And more importantly, how do they fi nd

you?

Search engines and optimisation

That brings us to the second step. That step is the

internet and likely a Google search (there are other

search engines, but almost no one uses them). This

is why it’s imperative these days to have a website.

It’s the fi rst place people go, even when they’ve been

referred on by someone. They want to see what work

you’ve done, what the tone of the business is like – will

that tone likely fi t them like the car they drive (see –

branding is everywhere).

If there’s not a specifi c builder someone’s searching

for, then it becomes a generic search, like ‘Auckland

Builder’, or ‘Nelson Builder’, or even ‘recommended

builders’ etc….

This is great if you’re ranked in the top 20 ‘organic’

results (not paid advertising), but if you’re ranked

past 30 you’re toast – almost no one goes past three

pages. Making your website ‘Search Engine Optimised’

will help your ranking but it’s a slow process, very

competitive and expensive. Companies pay specialists

thousands of dollars each month to ensure they’re

ranked highly, which is why it’s often (again) the big

companies at the top.

Google adwords

Again, if you don’t have the budget for SEO, then

you can pay for Google Adwords, so you appear

in the ‘advertising’ sections that appear alongside

the organic results. Unfortunately, this works on an

‘auction’-type scheme. You nominate how much you

want to pay per click. The more popular search strings

mean you pay a commensurately higher amount. There

are clever things you can do, like bidding to be at

number 2 or 3, but when your daily budget runs out,

you’re off the list unless you put more money in, or

your next day’s budget kicks in. So it’s cheap to be a

Horowhenua builder, but not an Auckland builder.

The other downside here is that you’re paying for

people clicking on your link who may not be interested,


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and you may be paying for bots – bits of software

searching links for search engines and marketing

companies, or hackers looking for email addresses to

add to scam lists. There are estimates that up to 50%

of click-thrus are bots – and you pay for every single

one of them.

It’s generally best to pay an expert to work the

system as best as they can for you. This can make the

difference between paying lots for no result, or paying

a bit less and getting good results.

Directories

Once upon a time, in a past life we’ve all forgotten,

there was the Yellow Pages. Its migration to the

internet didn’t go that well. They didn’t adapt their

offering to the new medium and the platform they

created didn’t work overly well. There’s still the

power of the ‘Yellow’ brand, however, but they have

competition from directories that are equally broad in

the number of categories they cover, with a resulting

dilution in effectiveness, and specialists like the

Building Guide website.

The likelihood of someone going to Yellow to do a

search for a builder is somewhat diminished when

you can start straight away with Google and bypass it

altogether. Yellow is now changing the business it’s in

by offering some of the services mentioned above to

their clients.

Specialist directories still have a place. If people are

visiting sites they know to contain useful information

about a topic they’re researching, then it makes sense

they’d use the same site to look for services and

products – and trust them to deliver good results.

Remarketing and retargeting

By placing a ‘cookie’ on a website visitor’s computer,

websites can recognise when they come back and

reload things like passwords and preferences.

It also means that companies can now learn what other

websites people visit. When you sign in to Google and

Facebook, the same thing happens. You may not be

aware, but if you don’t log out of Facebook each time,

it tracks your website movements, even when shut

down. This is why you now get banner ads showing

you that mountain bike you were just looking at – just

in case they can get you to reconsider…

The future

Ultimately, marketers are going to know exactly

what you want, often before you know yourself. This

is coming and the only thing you can do about it is

to block ads on your browser and refuse to accept

cookies. Even then, they have ways of fi nding stuff out.

The trade-off is the convenience of using the internet.

It may be creepy, but it’s the future so you may as well

take advantage of it.

Conclusion

So back to word of mouth marketing.

Word of mouth happens when someone has a problem

that needs solving and they share that problem with

someone:

“We’re looking to build – do you know a builder?”

Can the person they’re talking to help them solve their

problem? And are you the person they’ll recommend?

So – try to be that person they recommend:

“I had a great experience.”

“They were excellent to work with – clear

communications and no surprises.”

“Their work was excellent.”

“When we fi nished, they gave us champagne and a

photo album of the build – we didn’t expect that!”

What are you going to do that will leave a lasting,

positive memory of that project that will mean you’ll be

the fi rst person recommended when someone is asked

that question?

And what else are you doing to make sure that

everything you do reinforces that good feeling

– your advertising, your website, your staff, your

communications to your clients?

And at the end of the day, be remembered. For the

right reasons.







Each year thousands of construction projects are

undertaken. The industry is vast, subcontracting is the

prevalent means of undertaking most construction

work, a considerable amount of industry knowledge is

empirically acquired, expectations are always high and

seldom well communicated, costs are high compared

to most other transactions, and contractors often

undertake projects of great complexity and risk.

Despite the best of intentions, it is not diffi cult to

understand why disputes are a common and natural

consequence of such an environment.

It is important therefore that you are aware of the

processes available to you to resolve any disputes

arising under your construction contract. We set out

below a brief summary of your options. You should

ensure you are familiar with these before you enter into

any construction contract and make sure your contract

provides for arbitration as the ultimate and fi nal

dispute resolution process (see section on arbitration

to follow).

Negotiation

Negotiation is the primary method of dispute

resolution used by parties in confl ict to resolve

disputes. Negotiation is an informal, infi nitely fl exible

process whereby parties, or their representatives,

bargain with each other for individual or collective

advantage for the purpose of reaching an agreement

on courses of action and/or for crafting an outcome

that best meets their mutual interests.

Negotiation is the least formal and least expensive

process for resolving disputes, but its effi cacy

is dependent on the parties’ ability to enter into

meaningful and constructive dialogue in good faith

without the assistance of a third party.

Negotiation should always be the fi rst process utilised

by a disputant to attempt to resolve disputes, but for

obvious reasons, many parties are simply unable to

disentangle and remove themselves suffi ciently from

their sense of grievance and the emotional stress and

the detail and other drivers of the dispute to negotiate

effectively without the

assistance of a third party.

Where direct negotiation fails

to resolve a dispute, parties

will need to engage in a formal

dispute resolution process such

as adjudication, mediation, or arbitration. An entity

which can assist you is the Building Disputes Tribunal,

which is recognised and respected as the leading

independent nationwide provider of specialist dispute

resolution services to the building and construction

industry in New Zealand.

Adjudication

Statutory adjudication under the Construction

Contracts Act (Act) is the most commonly used

dispute resolution process in New Zealand for

resolving building and construction disputes, offering

a unique, fast, and relatively straightforward statutory

process for resolving disputes that arise under

construction contracts. Adjudication is quick and cost

effective. Most disputes are resolved in less than six

weeks from the time the process is initiated. The Act

applies with very few exceptions to every construction

contract that relates to the carrying out of construction

work in New Zealand including contracts for design

work, engineering and quantity surveying. Any party

who has a dispute or difference with any other party to

that contract can refer that dispute to adjudication.

A claimant (the party referring a dispute to

adjudication) may secure the appointment of an

adjudicator with the Building Disputes Tribunal within

24 hours of making an application. A claimant does

not require the agreement of the respondent to apply

to the Tribunal for the appointment of an adjudicator.

The respondent cannot delay, avoid, or avert the

adjudication process and will be bound by the

outcome whether or not the respondent participates in

the process.

Any party to a construction contract has a right

to refer a dispute arising under that contract to

adjudication. Accordingly, it is not necessary to

include a reference to adjudication in the underlying

construction contract.

The Building Disputes Tribunal offers a fi xed fee

adjudication service for disputes of limited complexity

and for a monetary value less than $50,000.00. This

Construction projects are a highly complex undertaking – even residential projects. Complaints and disputes arise as a matter of course, so we went to John and Catherine Green at the Disputes Resolution Tribunal for advice on the path to settling issues…

DISPUTES WILL HAPPEN – HERE’S HOW TO DEAL WITH THEMBy Mark Graham

THE BUSINESS OF BUILDING ISSUE 1 :1826 THE BUSINESS OF BUILDING ISSUE 1 :1826… c o n t i n u e d o v e r l e a f

provides the parties with certainty as to the cost of

having their dispute determined.

The default position under the Act is that the parties

will bear their own costs and share the adjudicator’s

costs in equal proportions, although the Act does

provide for an award of costs against a party where

that party’s allegations or objections are without

substantial merit, or that party has acted in bad faith.

Arbitration

Historically, prior to the enactment of the Construction

Contracts Act in 2003, arbitration was the favoured

means of resolving building and construction disputes.

Arbitration is a formal dispute resolution process

whereby two or more parties agree to submit all or

certain disputes between them to an independent

person called an arbitrator, for a binding decision. The

process is governed by the Arbitration Act 1996. An

arbitrator’s decision, called an award, is binding on the

parties and is enforceable as a judgment in the High

Court.

The objective of arbitration is to provide a fl exible

and effi cient means of resolving disputes quickly,

cost effectively, privately and confi dentially without

necessarily adhering to the formalised, technical

procedures of litigation.

Whilst arbitration is closely related to litigation,

there are several key differences which make it an

important and attractive alternative to state litigation.

In particular, arbitration gives the parties the power

to choose their own decision maker, place and time of

hearing, and as far as they can agree, to control the

arbitration procedures which may be varied to suit the

nature and complexity of the dispute.

The key differences between adjudication and

arbitration are fi rst, that no agreement is required to

refer disputes to adjudication because it is a statutory

dispute resolution process whereas arbitration is

consensual, and second, that adjudication is binding

in the interim (the dispute may still be litigated or

arbitrated when arbitration is provided for in the

construction contract), however, an arbitrator’s award

is binding and enforceable subject only to limited

grounds of appeal. That said, in the vast majority of

cases an adjudicator’s decision (a determination) will

be accepted by the parties with no further recourse to

litigation (or arbitration).

The Building Disputes Tribunal offers fully administered

arbitration processes, including a suite of arbitration

rules for expedited arbitrations to be conducted

within 45, 60, or 90 days. The Tribunal also offers a

fi xed fee service for disputes of limited complexity

and for a monetary value less than $50,000.00. This

provides the parties with certainty as to both the time

and cost which will be incurred in having their dispute

determined.

If parties wish to access these services, it is

recommended that the Tribunal’s model arbitration

clause be included in the parties’ construction contract

(although parties may also agree after a dispute has

arisen to refer that dispute to the Tribunal):

“Any dispute or difference arising out of or in

connection with this contract, or the subject matter

of this contract, including any question about its

existence, validity or termination, shall be referred to

and fi nally resolved by arbitration in accordance with

the Arbitration Rules of the Building Disputes Tribunal.”

Mediation

Mediation is a consensual, confi dential and relatively

informal negotiation process in which parties to a

dispute use the services of a skilled and independent

mediator to assist them to defi ne the issues in dispute,

to develop and explore settlement options, to assess

the implications of settlement options and to negotiate

a mutually acceptable settlement of that dispute which

meets their interests and needs.

The objective of mediation is to enable and empower

the parties to negotiate and resolve the dispute

promptly, cost effectively and confi dentially rather

than to have a decision imposed upon them by a judge,

arbitrator or adjudicator. Mediation enables the parties

to negotiate fl exible and creative solutions which need

not conform to strict legal rights or general community

standards.

Parties can agree to mediate at any time and it is not

necessary to have a clause requiring mediation in your

construction contract. However, it is worth noting

that the Building Disputes Tribunal is able to appoint

mediators experienced specifi cally in construction

disputes and you may therefore wish to include the

Tribunal’s model mediation clause in your construction

contract to ensure that any mediation service is

provided by that Tribunal. The relevant model clause is

below:

"In the event of any dispute or difference arising out

of or in connection with this contract, or the subject

matter of this contract, including any question about

its existence, validity or termination, the parties shall

refer that dispute to mediation in accordance with the

mediation rules of the Building Disputes Tribunal."

It should be noted that the Building Disputes Tribunal’s



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arbitration rules provide for a mandatory stay of the

arbitration proceedings in cases where the parties

agree to mediate after the arbitration has commenced.

Litigation

Litigation is the resolution of disputes between parties

via the court system. However, parties to construction

disputes do not generally use litigation because such

disputes typically involve a large number of issues,

considerable technical detail and vast quantities of

documents which often leads to lengthy delays and

can make litigation expensive.

While the Disputes Tribunal does offer a simple legal

process that can be applied to construction disputes

on the basis that it is used to recover a disputed debt

up to $20,000, the technical nature of most disputes

often requires the appointment of an independent

expert by the Referee and can result in multiple

hearing dates over an extended period before a

decision can be made.



Given the accessibility of information about ‘technology

based sustainability’, the fi rst step is to educate yourself

on how a home can become a smart living environment.

Designing the future

For many years, a signifi cant proportion of the building

industry has left environmental concerns to those with

green ideals and a preference for organic food. However

rising awareness of energy costs and diminishing

resources have prompted a collective rethink on the

value of sustainability.

How we consume fuel, power and water have become

major issues. Both governments and businesses are

reacting to diminishing energy resources and the effects

of climate change. Architects, designers, builders and

suppliers are now placing more focus on sustainable

energy use. Most are seeking to specify smarter

products, streamlined design systems and refi ned

construction processes that meet the rising demand for

energy effi ciency.

As a client looking to create an energy-effi cient,

sustainable home it is in your best interests to research

the wave of sustainable technology now available.

Sustainability as a long-term investment

During years of rampant consumerism, product

longevity was largely overlooked. Replacement was a

convenient if wasteful solution in case of failure or wear-

out. However, the usable life of materials and systems

is crucial to sustainable design. The longer an item is

serviceable, the less need there will be to expend further

energy replacing it.

After 20 years of design experience

I have come to regard 'function and

beauty' as essential pre-requisites of

any creative endeavour.

However, these elements are of little

value if the materials used and workmanship applied

are lacking. Buildings must be ‘designed for the future

and crafted to last’, factors that require both forward

thinking and ethical commitment, each more critical

than ever in a rapidly adapting world.

When constructing new homes, we must consider the

long-term vision of investing in technologies that offer

substantial rewards over the life cycle of the investment.

This means recognising the value of spending a greater

proportion of the initial budget on quality (materials,

products and processes) and less on achieving basic

volume. ‘Less is more’ may initially sound counter-

intuitive but when considered in terms of living quality

and return on investment, the benefi ts soon outweigh

short-term savings.

Choosing carefully — selecting products and systems

When we look at the annual running costs of a home,

a comparison can be made to those considered when

buying a car. Fuel effi ciency is usually paramount, along

with the potential expenditure on fuel over the vehicle’s

likely life cycle. It’s only a small step to extend this

analogy to home design.

Designing an energy-effi cient home involves balancing

the effect of passive systems such as using solar heating,

with more active, technology-based solutions. The effect

of the whole must suit your needs within the home and

Through greater understanding of smart technologies, your home can be designed to function at lower annual running costs while providing a more sustainable and comfortable living environment.

THE TECHNOLOGY OF ENERGY EFFICIENCYBy David Ponting



be within your budget. It must also be relevant to New

Zealand’s environmental context.

As keeper of the vision for your new house, it’s crucial

that you drive this process. It is up to you to ensure

the sustainability advantages that can be achieved are

locked into the brief, and their ongoing importance

clearly communicated to your design team and the

various tradespeople involved in the construction

process.

Through your own research, you are sure to uncover

other products that may be relevant, so it’s important

to keep an open mind in the early stages. The following

covers a range of smart technology solutions through

to technical products that deliver energy effi cient home

solutions:

1. Double-glazing systems

Windows allow significant thermal loss (or gains) and also

cause condensation. Double glazing systems incorporate

an insulating cavity between the panes that greatly

reducing these issues.

2. Glazing technology

Specialised glass can improve building comfort and

performance. For example: glass with ‘lowe’ coating

enables short-wave solar energy to enter a building while

preventing warm air from escaping.

3. Ground source energy

A ground source heat pump transfers heat to or from the

earth, extracting latent energy that exists below ground.

This lessens the seasonal power requirements of heating

and cooling systems.

4. Heat pumps

These enable mechanical extraction of latent heat energy

from external air using temperature differentials. This can

achieve cost-efficient heating or cooling depending on

the season.

5. Heat recovery ventilation (HRV)

This is a mechanical system that redistributes hot or cold

air between home zones, improving climate control and

reducing the energy requirements of heating and cooling.

6. In-slab heating

Underfloor radiant hot water pipes set within a concrete

slab provide heating to the floor. This is a consistent

and efficient heating method that takes advantage of

structural thermal mass.

7. Long-life lighting

Low energy, long lasting light sources save on power

usage and replacement costs. LED lights are a good

example.

8. Solar power

Solar power systems use energy from the sun for domestic

electricity supply and water heating. These are commonly

recognised as roof-mounted cylinders, piping systems

or photovoltaic panels. Tesla have recently introduced

glass roof tiles that double as photovoltaic cells at a price

comparable to a normal roof.

9. Thermal insulation

Thermal insulation reduces unwanted heat loss or gain. It

also achieves major reductions in the energy required to

mechanically heat or cool interior spaces.

10. Thermally broken window joinery

Non-conductive ‘thermal breaks’ integrated within

aluminium joinery counter the direct thermal bridging

that occurs between a window’s interior and exterior

components.

11. Thermostatic and time control systems

Time control mechanisms provide the ability to schedule

operation of environmental control systems. Your heaters,

pool pumps and other appliances can be turned off to

minimise energy usage during periods where buildings

are unoccupied; curtains can be set to automatically close

when the sun goes down in winter.

12. Wind turbine power

Residential scale windmills let you generate your own

electrical power by harnessing wind energy.

Self-education is vital

There are many websites providing impartial

information and others by companies promoting the

products and services they offer. It is important to

spend the time researching before you start building.

Following are some industry-based information

resources:

www.buildingguide.co.nz

www.ecodesignadvisor.org.nz

www.iisbe.org

www.nzgbc.org.nz

The value of forward thinking

We cannot afford to create new buildings that become

obsolete within a matter of decades.

A forward-thinking design process is essential to

achieving a successful long-term result.

Architecturally, almost anything is possible. A vast

array of products and technologies await your quest

to create the perfect home. Given open discussion

with your design team, the brief will further tighten

to express your needs and expectations. Site-specifi c

analysis around topography, climatic issues and use

of proven technology will ensure your home provides

energy effi cient, low cost comfort all year round.

David PontingDesigner and Director of Ponting Fitzgerald (www.pfa.nz). Article originally appeared in the 2013 edition of the Design Guide (www.designguide.co.nz).


• You need to eat.

• It’s noisier in the mornings.

• Architects don’t know how much it costs to build –

Quantity Surveyors do.

• How much time is spent on Health & Safety compliance.

• How to compete against cowboys who cut corners. We

don’t and we’re not the cheapest as a result.

• A lot of clients will take the cheapest without realising

that it’s because their builders are going to cut corners.

• The ‘5-minute job’ many clients think exists, is not a

thing. It’s never 5 minutes. And it’s never cheap.

• Young guys setting themselves up in business often

forget to price things like quoting and compliance and

business costs into their jobs.

• It takes me around 120 hours to quote a standard

job. That’s three weeks full time work just to price

something up.

• Coming out of the ground is hard, dirty work. That’s

pretty much the hardest part.

• Demolition work is hard, dirty work, too. That’s the

other hard part.

NO ONE TELLS YOU… BEING A BUILDER Mark Graham speaks to Brendon Murphy

• Food is important!

• The client always wants to move stuff. Often after it’s

installed. And then they wonder why the build goes

over budget.

• Clients always change their mind.

• There is no such thing as a straight forward job.

• Steel cap boots are important!

• At the end of each day, you’re tired. Really tired. But

you know you’ve done a day’s work. You can see your

progress.

• Clients often pay late. They don’t understand that

you’re paying for materials all the time, and subbies and

more. Cashfl ow for builders can be a real danger.

• It’s not always 7-4, fi ve days a week. Especially leading

up to Christmas.

• Everyone wants to be in by Christmas, even when

they’re heading off to their bach.

• Workplace romances are something you read about.

• Insurance is essential and expensive.

• Everyone wants to be a builder in the summer. And no

one wants to be a builder in the winter.

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Some other things to bear in mind when quoting...

Alternative methods and materials should be sought after. Remember you can always quote or tender against the competition, but an alternative solution focused on giving a better solution to the customer is yours alone.

Be proud of your past project achievements and tell prospective clients about them. The more credible you are, the more likely clients will want to do business with you.

There is always someone who may ‘need’ the job more than you do and they may submit a rockbottom price for the job. Don’t be tempted to simply match their price. Remember, the best price must stand the test:

Is the measure correct?

Are the rates for work correct?

Is the specifi cation correct?

Have special circumstances been allowed for?

Is the arithmetic correct?

Remember: A ‘no’ to any of these questions will only cost you money.

While clients may state they intend to select the lowest quote, when presented with a range of quotes, many clients will actually select based on the best solution. This may be the most expensive or the cheapest quote, but will depend on how well individual contractors have demonstrated the value that the customer will get for the price they have quoted.

Well respected contractors are often in demand and may be able to easily command premium rates. Many customers are willing to pay more for the assurance of getting a quality fi nish fi rst time - credibility, reliability and quality work may be their prime considerations with price a distant consideration.

Get a superb finish on your decorating projects with quality Resene paint, colour, wallpaper, curtains, decorating accessories. Come in and see the team at your local Resene ColorShop and enjoy the Resene difference today.

Call 0800 RESENE (737 363) or visit www.resene.co.nz for your nearest Resene ColorShop. Over 60 Resene ColorShops nationwide.

Resene paint quote checklist:

You must know the costs of doing the work. ssenisub ruoy gninnur fo stsoc eht rof wolla tsum uoY

(overheads) as well as some profi t for yourself.

,noitadommocca ,gnillevart ,)gnidloffacs( thgieh rof ecnawolla reporP permits, working hours to suit your client, expected weather conditions (painting when it is hot or cold). These all cost money.

It is easy to leave out a page of workings. Always double check everything before submitting your quote.

Is the proposed scope of work enough to properly carry out. Is the preparation properly specifi ed.

Remember: You are the expert and your advice is valuable if there is a better way for the client to achieve the result they desire.

Use a system so you can easily check your quantities. Make sure everything requiring painting is allowed for.

quality

paint

colour

advice

wallpaper

curtains

THE BUSINESS OF BUILDING ISSUE 1 :1832 THE BUSINESS OF BUILDING ISSUE 1 :1832

1. Only about 10% of your time will

be spent actually sketching and

conceptualising buildings.

2. The amount of paperwork is huge.

3. Knowing how buildings are actually

built is a really valuable thing.

4. Having good relationships with your

clients is really important as to whether

a project will be successful, and is

defi nitely critical as to whether the

project will be enjoyable or not.

5. Just how many options there are for

different parts of a house – cladding,

roofi ng, framing, insulation, fl ooring…

even different types of timber

fl ooring… even different types of

hardwood fl ooring vs different types

of engineered timber fl ooring – the

number of products is enormous and

every day there are new products

coming out and people trying to get

you to use those products.

6. So much of what you do is a

compromise and/or a collaboration. It’s

rare that you get to do everything you

want to, but…

7. …working with a good client who can visualise what you’re

trying to achieve can be incredibly rewarding.

8. How many constraints there are when you come to design

something – budget, building envelope (how high you can

go, how big it can be, etc.), budget, design preferences,

budget…

9. How incredibly satisfying it is when you walk in through the

door of a completed project.

10. Learn project management: As an architecture student, one

of the fi rst things you fi nd out (and last things you learn

to fi gure in) is that everything will likely take three to fi ve

times longer than you expected. This is also unfortunately

common in practice and generally Architects need to be

better managers. I believe this is because architecture is

both a qualitative and quantitative process which helps to

negate the ‘fi nish’ line. Not ever did I feel a design project

NO ONE TELLS YOU…BEING AN ARCHITECT was ‘perfect’ and likewise Architects on every project wish

they had done something (or many things) differently.

“Parkinson’s Law dictates that a task will swell in (perceived)

importance and complexity in relation to the time allotted

for its completion.”- Tim Ferriss, The Four Hour Work week.

Understanding the perceived importance of a given task will

effectively allow you to direct your focus on the right things,

at the right time, allowing you to make smart decisions on

where to spend your effort, time, money, resources and so

on for maximum gain. For more guidance on study hacks

With input from Paul Somerford, Director Brown Day Group (www.brownday.co.nz) and additional insights from Michael Riscica of Young Architect (youngarchitect.com) and Randy Deutsch, Clinical Associate Professor, Associate Director for Graduate Studies at the University of Illinois.

and optimising the use of your time check out Cal Newport’s

blog and 99U.

11. If you want to see your designs built, then you will spend

time designing your buildings in such a way that they are

buildable. Make the ability to put buildings together on equal

terms with the ability to design. Otherwise, you’ll be a paper

or digital architect. But not an architect who builds.

12. You can open an offi ce without any clients. One of the gifts

of being an emerging professional is that you don’t know

enough – haven’t been around enough – to be scared away

from doing unwise things.

Like opening an offi ce with no clients.

But call it naïve or fearless, I opened my fi rm without any

clients. And by the end of day one I had three.

How? By putting myself out there. Before launch, I





hired a graphic designer and designed professional

looking letterhead and an announcement, and sent the

announcement out to everyone I knew.

I got out of my offi ce and, wouldn’t you know, while putting

gas in my car, I heard a voice – a former client who, having

received one of my announcements, asked if I would be

interested in doing some work for him?

It’s all about putting yourself out there. You’ll fi nd if you put

yourself out there, people will meet you halfway.

14. The inglorious moments of working long and hard, being

challenged by contractors, plans examiners, and diffi cult

clients, will far outnumber the moments when you look cool

for being an Architect.

15. Many architects don’t start seeing decent money until

after they become somewhat experienced, licensed, and

accomplished. This generally takes 5-10 years out of college.

16. YOU NEED MATH. Or you need to be able to work at it until

you’re okay or you have good people around you who are.

13. Being an architect is the best job in the

world. Think of it like this; You are given

so many days on this planet, how do you

want to go about spending them? I can

think of no greater way to live on our

planet than to have a position where you

can act on it, change it, grow it, improve it.

17. Architecture is about people.

You’re designing buildings for

people to use. People are

paying you. People will

build them for you.


Because for all their strengths, today’s robots face

some issues…

• Building sites are pristine environments.

Building sites are all different, so for true automation, they’d

have to fi gure out where they are and what they’re supposed

to be doing. Robots were originally developed for use in

factories. Mostly they operate in highly controlled, clean,

clutter-free environments, most often without humans in

close proximity. A building site is another matter altogether.

First of all, each site is laid out differently, so a robot would

have to be intelligent enough to recognise where it is on the

site and then move to the right location. Secondly, building

sites are often chaotic, disorganised spaces with materials,

tools, debris, and wires spread about. Many areas of the

Imagine a robot that can not only tear a building down, but also recycle it. Imagine a building 3D printed using a glue-type cement, built by a robot working 24/7 with no lunch breaks, no toilet breaks and no arm breaks.

DEMOLITION (AND CONSTRUCTION) BY ROBOTS

Speculation is rife of a pending replacement of humans

doing things by robots doing them instead. There’s no

doubt robots are on their way, and they may yet prove

to be more Cyberdine Terminator than C3PO. But as

robots become more developed and more common,

robot engineers are bumping up against limitations…

Robots do have a few advantages over human

workers:

• They’re precise.

• They don’t need sleep or food breaks.

• They don’t sleep in, they don’t drink or do drugs, there are

no mistakes, no time-off, no slacking, no injuries, no health

and safety concerns, and they don’t fi ght with co-workers

(or have affairs with them).

• They could work in spaces that are unsafe for humans,

including small, airless rooms or on the sides of large

buildings with no fear.

• They don’t get paid.

Several companies are working on bricklaying robots,

including Construction Robotics in the US, with a unit

called semi-autonomous mason (SAM), and Fastbrick

Robotics in Australia. They lay bricks straight (or not, if

that’s what’s programmed); they’re accurate, fast and

tireless. But they’re not quite here, yet.

Or self-replicating building ‘cells’ that grow into a building

following a set ‘DNA’. It’s coming (though maybe not

quite yet)!

By Mark Graham

… c o n t i n u e d o v e r l e a f


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THE BUSINESS OF BUILDING ISSUE 1 :1836 THE BUSINESS OF F BUILBUILDINGDINGDINGINGNGG ISSUISSUIS E 1EE 1 E 1E 11E :18:1:18181888188: 8

There is no "master architect" or "project manager" in

anthills. Each ant repeatedly adds material, following a

very clear set of rules, and the anthill emerges from the

collective efforts of the entire swarm of ants.

If we look at human cells, the information or blueprint

to construct the cell is embedded within the structure

of the cell, in the DNA. This enables the cells to make

copies of themselves. It may be possible to develop

building components that have some built-in geometry

that allows them to link together to form buildings in a

number of different ways, and perhaps allow humans

to program them to link together two or three different

ways, thereby allowing a variety of structures from

the same module. In this approach, the robot does not

build the structure, but is the structure, as the building

is built of thousands of identical mini-robots.

DEMOLITION (ONE OF THE DIRTIEST AND HARDEST

PARTS OF BUILDING)

By mechanising the hard and dirty work of demolition

(and even recycling), large building projects would

go much faster, and they would also likely become

cheaper and safer too.

This robotics proposal comes from Swedish student

designer Omer Haciomeroglu, who says that his

concept – named ERO - is a smart recycling robot like

the Disney/Pixar WALL-E.

He states that ERO could ‘effi ciently disassemble

concrete structures without any waste, dust or

separation, and enable reclaimed building materials to

be reused for new prefabricated concrete buildings.’

In other words, it could be a dream come true for the

construction sector.

In concept, it uses high-powered water jets to crack

the concrete, and the cement and water are then

sucked up and separated. The water is recycled back

into the system, while clean aggregate is packed

and sent to concrete precast stations for reuse. The

reinforcing steel can then be cleaned and cut on the

spot for reuse, as well.

A fl eet of ERO robots working together would be able

to scan the area and plan their demolition/recycling.

The robots could literally ‘erase a building.’

Robots are coming, of that there’s no doubt, but

humans are going to be needed for a while yet,

especially with the current construction boom

going on.



site will have unpaved soft soil, into which a robot will sink

if it steps off the beaten path. There will be dust, rain, ice,

and storms. There will be humans walking around. Getting a

robot to work in these conditions is very diffi cult.

• Buildings nowadays are complex entities, and construction

entails many different trades coming together to work in

perfect sync with each other. The robots that we’re seeing

now each perform one specialised task. It is impossible for a

bricklaying robot to perform delicate tasks such as installing

electrical cabling. Human dexterity, intelligence and

situational awareness, developed over hundreds of millions

of years, is currently far superior. Services like power cables,

data and information cables of many kinds (voice, security,

fi re alarm, BMS) have to be woven through the fabric of the

building. So, a robo-mason must also be able to lay conduits

for electrical wires, plumbing pipes, and must be able to

perform waterproofi ng tasks. That’s way beyond what can

be done right now.

SO HOW LONG BEFORE BUILDINGS ARE MADE BY

ROBOTS?

Robots need to become a lot smarter – a 'general

intelligence' and awareness, and that implies an

awareness of ‘self’, too (self-aware robots – nothing

to worry about here). This could be 20 years. At the

moment, the robots are really just better tools.

WHAT ABOUT BUILDINGS THAT CAN MAKE

THEMSELVES?

New technology often means doing things in new ways

that hadn’t previously been considered. Rather than

have someone (or thing) build a house, what if the

house built itself? Or rather than one big robot, what

if lots of small robots, each doing a specifi c thing over

and over, and coordinated with its ‘co-workers’, ‘grew’

a house?

These concepts are not new to science-fi ction readers.



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I wanted to help other home owners going through

that process – we found that the more we learnt the

better the build went.

As it happens, every report I've read since that looks

for ways to improve productivity and effi ciency in the

building industry has identifi ed client education as

being a critical factor. The traditional view that clients

having a little bit of knowledge is a dangerous thing

is consistently shown to be the reverse.

The latest BRANZ report: New House

Owners’ Satisfaction Survey 2016 clearly

shows a higher degree of satisfaction

with the outcome of their building project

from people who have built before,

compared to fi rst time housebuilders.

It stands to reason, if a client understands

at least a portion of all the elements that

go into building a house there will be

greater tolerance for the complications that always

arise in a building project.

Twelve years on, I continue to be disappointed at

an industry attitude that sees client education as a

"nice-to-have" rather than an essential for the industry

to improve outcomes and productivity. With the

exception of New Zealand Certifi ed Builders, none

ALAN’S RANT

of the major industry

associations support

the Building Guide or

undertake any consumer

education programmes beyond promoting their own

membership base.

Facebook posts and blogs are not suffi cient in

our view to adequately address client ignorance

around building.

Now the country is about to undertake a major state

housing building programme. The client in this case

will be the New Zealand government and, indirectly,

New Zealand citizens. Our greatest

concern, especially given the fi asco

of the leaky home crisis and the more

recent Christchurch rebuild issues

that we identifi ed in our last edition of

BoB, will be in ensuring that the new

programme will have a robust quality

assurance component in place.

While the thought of built-in

obsolescence to ensure the building

industry has ongoing work has some attraction,

we'd prefer that we ‘built it right’ the fi rst time so we

don't have to come back and rebuild them over and

over again.

To this end it would be nice to think that the industry

organisations, who are seen as the natural leaders

of the industry, work with MBIE and the KiwiBuild

programme to focus on quality outputs rather than

just ensuring work for their members.

I started publishing the Building Guide almost twelve years

ago because I came out of a major renovation and extension to

our house having learnt a huge amount, not least was how little

I knew about building.

THE PRICE OF NOT EDUCATING HOME OWNERSGuest writer – Mark Graham, BoB publisher

…the more

we learnt the

better the

build…



PRESCRIBED CHECKLIST

About this checklist

A building contractor is required to provide you with this checklist and other prescribed information under the Building Act 2004 before you sign a contract for the building work if -

(a) you request this checklist and the prescribed disclosure information; or

(b) the building work is going to cost $30,000 or more (including GST).

The building contractor is the person or company you have asked to do building work for you.

The building contractor may not be an actual builder. The building contractor could be a plumber, an electrician, or any other tradesperson who is doing some building work for you and whom you are dealing with directly.

Steps (See notes below)

Completed (Tick when completed)

1 Become informed

2 Agree on project structure and management

3 Hire competent building contractors

4 Agree on price and payments

5 Have a written contract

6 Take control

7 Resolving disputes

Notes

Step 1 – Become informedAll building work must comply with the provisions of the Building Act 2004. You can find a copy of the Building Act 2004 on the New Zealand Legislation website: www.legislation.govt.nz

Building work is any work done in relation to the construction or alteration of a building. This includes any work done on your home or other structure, such as a garage, retaining walls, and fences. It also includes work like painting, decorating, and landscaping if it is part of the construction or alteration of a building.

However, if the only work you are getting done is redecorating and there is no construction or alteration work involved, it is not building work. If landscaping work does not include any structures (eg, pergolas or retaining walls), it is also not building work.

All building work requires a building consent unless it is exempt under the Building Act 2004.

Generally, only simple or low-risk work is exempt from the requirement to have a building consent. Certain gas and electrical work is also exempt. For more information, go to www.mbie.govt.nz

Building work that is significant or of higher risk (such as structural alterations) requires a building consent and must be carried out or supervised by a licensed building practitioner. For more information on these requirements, go to www.mbie.govt.nz

Step 2 – Agree on project structure and managementBuilding projects do not run themselves. Decide how you want to manage the building project.

A few different roles are needed on a building project. You need someone to -

• manage timelines and costs:

• manage subcontractors:

• liaise with the local council:

• make decisions about the design of the work.

You can do some of this yourself, but if you are not knowledgeable about the building work process, you should get help from an architect, an independent project manager, a building company, or a licensed building practitioner who is licensed to co-ordinate the building work involved.

You should be really clear about the scope and size of the project and get detailed plans up front.

Be clear with your building contractor about who is doing the building work and who is responsible for making design and change decisions during the project.

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Step 3 - Hire competent building contractorsEnsure that your building contractor has the skills and resources to carry out the project.

You should -

• ask around about the building contractor and get references for other work that the building contractor has done:

• find out if the building contractor is a licensed building practitioner or has other appropriate qualifications. For more information about licensed building practitioners, go to www.mbie.govt.nz

• determine whether the building contractor has sufficient insurance to cover the work while it is being carried out:

• ask about the building contractor’s employees and what subcontractors the building contractor will use on the project:

• if the building contractor is a company, look up its company records on the Companies Office’s Internet site. If your search raises concerns, ask the building contractor to explain.

Step 4– Agree on price and paymentsThe contract should clearly state what payments are required and when. Where possible, a fixed price is preferable. The lowest price is not always the best price.

You should -

• get detailed quotes (not estimates) for the building work:

• when comparing quotes, ensure that the scope of the building work and the materials and fixtures that you are comparing are the same across quotes so that you are “comparing apples with apples”:

• make sure you have the funds to pay for the project before the work begins and that you understand the payment terms agreed with the building contractor:

• think carefully before agreeing to pay more than the cost of the work that has been completed and the costs of any materials that have been supplied at the time you make the payment.

Step 5 - Have a written contractYou should have a written contract. The contract should include items such as -

• a description of the building work:

• the start and completion dates for the building work:

• how variations to the building work will be agreed:

• the payment process, including dates or stages for payment and how payments will be invoiced, made and receipted:

• the dispute resolution processes to be followed.

You should obtain legal advice to ensure that you understand your rights and obligations and that the contract complies with all legal requirements.

Note: The Building Act 2004 requires that there must be a written contract for residential building work with a value of $30,000 or more (including GST), and the Building (Residential Consumer Rights and Remedies) Regulations 2014 prescribe matters that must be included in every contract for residential building work with a value of $30,000 or more. You can find a copy of the Building Act 2004 and the Building (Residential Consumer Rights and Remedies) Regulations 2014 on the New Zealand Legislation website: www.legislation.govt.nz

Step 6 - Take controlAll residential building work is covered by implied warranties prescribed by the Building Act 2004 that address matters such as workmanship and building work being fit for purpose. For more information, go to www.mbie.govt.nz

You should -

• make sure there is a clear line of communication with the building contractor through the site foreman, the project manager, or any other person who has authority to speak on behalf of the building contractor. (This person should be identified as the “key contact person” in the prescribed disclosure information that the building contractor has provided along with this checklist):

• when you are making decisions along the way, be clear as to whether those decisions will affect your contract and costs. If you do decide to make a change, keep track of the effect of that change.

Step 7 - Resolving disputesIt is in both your interests and the building contractor’s interests to keep the building project running smoothly and to deal with any disputes as they arise.

If you have concerns about the building project, raise them with the building contractor (or the key contact person) as soon as possible.

Raise your concerns in good faith and use the dispute resolution processes agreed to in your contract. For information on your options, go to www.mbie.govt.nz

If you have received an invoice that you have concerns about, clearly outline your concerns to the building contractor in writing.

If you fail to make a payment when it is due, the building contractor might start dispute resolution proceedings before you have a chance to explain why you have not paid. (Simply withholding payment when there is a dispute will often make the situation worse.)

Further informationFor more information, go to www.mbie.govt.nz or call the Ministry of Business, Innovation, and Employment on 0800 242 243.



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