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Q & A: Managing monolithic cladding

Press Release: Auckland City Council

Thursday, December 4th 2003, 6:47AM

by The Landlord

Q & A: Managing buildings using monolithic cladding

1. Q: What is monolithic cladding?
A: There are three types of monolithic cladding systems on the market; traditional stucco plaster, Proprietary Plaster Systems EIFS and fibre cement. “Monolithic” is a term that refers to cladding with an applied coating so as to appear seamless, often imitating concrete, masonry or plaster.

2. Q: What are the national implications from Auckland City’s decision?
A: At this stage we can’t really say. Most of the country followed us when we introduced practice notes 13, 13a and 13b. Given all local authorities are facing the same issues we could expect similar responses. 3. Q: How many property owners could be affected nationally?
A: We are not party to other TAs cases or data and we do not have a clear sense of how they are responding to this issue in their area

4. Q: Who will be sent to the Building Industry Authority for a determination and why?
A: Where we have undertaken an inspection and have doubt that at completion the building would not be code compliant or that (in the event of a completed building) that it is code compliant, then we will issue a notice to rectify. A notice to rectify is simply the list of actions that we require in order that we no longer are doubtful of the building’s code compliance. Owners will be advised they have two alternatives – either to comply with the notice to rectify – in that case apply for a variation to their consent, or to seek a determination from the BIA.

5. Q: What is the process that the BIA will undertake in these circumstances?
A: See attached sheet

6. Q: Do you think this may cause a log jam at the BIA of people seeking determinations?
A: There is a possibility that the BIA will have to increase their capacity to handle requests for determinations but we are aware that they are already considering ways to expedite the process and to work more closely with TAs

7. Q: Will CCCs on all monolithic cladding projects be brought to a standstill nationally?
A: No - if the buildings comply with the requirements in the practice notes 13, 13a and 13b then there should be no problem.

8. Q: Will one determination by the BIA settle the issues, or several, or will individual determinations be needed on all applications?
A: Determinations are undertaken on a case by case basis.

9. Q: How long have BIA determinations taken in the past?
A: In the past it has take several months for a determination.

10. Q: What will the financial impact be on those waiting for CCCs?
A: We are unable to say, as it will depend on the specific circumstances of owner and the building.

11. Q: Why have you done this retrospectively?
A: Because of the Kelleway and WHRS data, and other research that has recently come to hand. The Building Act also requires all TAs to make decisions using the most recent information available at the time these decisions are made.

12. Q: What does this mean for homeowners seeking a CCC in terms of time and costs?
A: Builders and homeowners may be affected depending on the building and what work is entailed or particularly if they decide to approach the BIA for a determination.

13. Q: Will council be offering homeowners seeking a CCC any form of compensation?
A: The duty of care for the council is to discharge our duty prudently and responsibly – it would therefore seem a strange thing to offer compensation because we discharge our duty in this manner. It would also seem strange for one set of ratepayers to be subsidising another, because Council is doing their job properly given this new information. We need to make sure that the amount of building claims does not get any larger than it already is.

14. Q: Why has the city waited. Could it have acted earlier?
A: No we couldn’t have acted earlier. While we have been monitoring our claims the release of the WHRS information, and the Kelleway judgement were two decisive moments that meant that we could not have acted earlier.

15. Q: What is a ‘high risk’ building?
A: ‘High risk’ buildings are buildings that adopt a "Mediterranean" appearance of plaster and adobe finishes. Typically the style can be identified by its flush plaster finishes, lack of eaves, use of parapets and with balconies both internal and external to the building's principal form.

16. Q: What is the cost of rectifying homes already built but not issued with CCCs?
A: We are not able to say as it depends on the specific building and what needs to be done.

17. Q: Are there any multi-unit, multi million dollar properties affected (and their values)?
A: Unsure at this stage, but we have processed some claims of properties in these categories. Yes, if their building consent was issued prior to December 2002.

18. Q: How do you expect affected building owners and the industry to react?
A: Like us, with concern.

19. Q: Will there be any rolling impact on materials and labour force availability?
A: Already we are seeing people choosing brick beneath plaster cladding which means that there is currently a 4 month delay for bricks.

20. Q: Has the council's risk increased - by an 'effective admission' that the previous policy allowed potentially leaky methods to be used, are no longer permitted?
A: No because we have acted so promptly and decisively. We now have new information, and the Kelleway decision effectively redefined the extent of council involvement. In effect Kelleway increased our risk by creating precedent setting expectations around what and how we should carry out inspections so that we can be satisfied on reasonable grounds regarding code compliance. We remain liable for any work though that we carry out negligently.

21. Q: Has the BIA been advised, and are you confident it can cope?
A: We have been working with the government and the BIA and have been warning for them for sometime now that we would need definitive judgements on what would and wouldn’t be code compliant. We cannot comment on the BIA’s capacity.

22. Q: What's the impact on the CCC log jam at Auckland City?
A: The whole building industry has been under immense pressure for sometime now and Auckland City’s building team is no different. ACE continues to have difficulty in attracting staff either in the consent or inspections area and the gap in technical expertise remains. The shortage of technical staff is a national problem and we need to look at ways that we can increase the pool of expertise as well as recruiting internationally. We are currently using this last approach. We have arranged accreditation with the immigration service and are running a recruitment campaign internationally costing more than $30,000.
« Builders forgo contracts for lack of staffCouncil tipped not to certify potential leaky homes »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.45 7.05 6.85
ANZ 8.64 7.99 7.49 7.35
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 6.89 6.75
ASB Bank 8.64 7.39 6.89 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - ▼7.29 ▼6.85 ▼6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.95 7.65 7.45
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.15 - -
Co-operative Bank - Owner Occ 8.40 7.35 6.89 6.75
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.85 7.39 7.25
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 7.89 7.65
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 6.89 6.75
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.39 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.95 7.45 7.29
SBS Bank Special - 7.45 6.95 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.55 7.55
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 6.75 6.75
Unity 8.64 6.99 6.85 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.45 7.37 6.77

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