Oireachtas Joint and Select Committees
Wednesday, 5 April 2017
Joint Oireachtas Committee on Housing, Planning, Community and Local Government
Review of Building Regulations, Building Controls and Consumer Protection: Discussion
At the request of the broadcasting and recording services, delegates and those in the Visitors Gallery are requested to ensure that for the duration of the meeting their mobile phones are turned off completely or switched to aeroplane, safe or flight mode, depending on their device. It is not sufficient for members to put their phones on silent mode as this will maintain a level of interference with the broadcasting system.
I welcome, Ms Deirdre Ní Fhloinn and Mr. Eamon O'Boyle and from the Construction Industry Federation, Mr. Mel O'Reilly, Mr. Brian McKeon and Mr. Hubert Fitzpatrick. We begin today with the review of building regulations, building control and consumer protection.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
Mr. Hubert Fitzpatrick:
This topic is one of the most pressing and important to the building industry that we represent. It is timely that we are meeting today to discuss regulations, controls and ultimately protecting the consumer. I am joined by Mr. Mel O'Reilly of MDY Construction, who chairs the CIF building regulations committee, and Mr. Brian McKeown of MKN Property Group, who is vice chairman of that committee. Mr. Shane Dempsey has joined us in the Visitors Gallery.
Today, the building industry is steadily increasing the level of new buildings and housing supply to meet the demands of the population after nearly a decade of inactivity. The committee and our industry have a key role in ensuring the building regulation, control and consumer protection regime deliver quality construction and sustainable growth across the industry. CIF represents about 1,350 construction companies across the economy and at the outset, I reaffirm CIF's commitment to the Building Control (Amendment) Regulations, BCAR, and other regulations targeted at delivering quality construction. CIF played a positive role in the formulation of the Building Control (Amendment) Regulations 2014 because our members and the wider industry will ultimately benefit when these regulations are applied to all those operating within the industry.
The CSO calculates that there are 46,000 construction-related companies and about 46,000 self-employed people operating in the sector. Even though we represent only a fraction of these companies, it is in our interest to ensure that there is a robust building regulation and controls system in place to ensure that only reputable builders can operate in the industry. By 2014, we had seen numerous high-profile cases arising from building control issues during an unprecedented period of building activity.
The CIF believed that these highlighted the real need for a more robust building control regime. We engaged extensively with the Department and other stakeholders, including the RIAI, SCSI, Engineers Ireland and ACEI, when the Building Control (Amendment) Regulations 2014 were being formulated.
BCAR has introduced greater transparency, traceability and accountability across all companies in the construction industry. A key issue CIF identified was the ineffective system of certification that applied prior to the economic collapse. These opinions were often based on inspections of buildings after construction and with caveats to the opinions expressed offering little to no consumer protection. Thankfully, this system has now changed. BCAR now requires that competent builders and professionals work together to an inspection plan, with certification of compliance on completion for all stages of the construction process. This has introduced significant discipline into every stage of the process from detailed design to ordering of materials to inspections and certification of relevant works as they progress and come to completion. In addition, commencement notices must now be accompanied by outline plans and documentation; a certificate of compliance design; a certificate of compliance - undertaken by an assigned certifier who must be a registered architect, a registered building surveyor, or a chartered engineer; and a certificate of compliance undertaken by the builder confirming his competence and the competence of his team. The builder must also undertake to construct the works in accordance with the plans and specifications supplied; co-operate with the inspections carried out; and certify the works comply with the building regulations. Before works or a building can be opened, occupied or used, a valid certificate of compliance on completion must be included on the statutory register maintained by the relevant building control authority. The builder and the assigned certifier must sign this document and it must be accompanied by the inspection plan as implemented by the assigned certifier. It is, therefore, safe to say there is a much more rigorous certification process at each stage of construction for new construction in the State.
To further embed these practices throughout the entire construction industry, the CIF, in conjunction with the Department, developed the register of builders Construction Industry Register Ireland, CIRI. CIRI has a high threshold for quality that will essentially exclude inexperienced or ad hocbuilders securing registration. This will mean consumers can seek out builders on the register to carry out works. CIRI reinforces the building regulations and drives standards by showing the consumer which builders are up to the required standards. I ask the committee for its support for the introduction of CIRI on a statutory footing. CIRI has an independent board including a chairman and ten members to assess the eligibility of applicants for registration. The chairman of this board is appointed with the consent of the Minister for Housing Planning Community and Local Government. Departments and agencies appoint five other board members - two are registered professionals while the remaining three are representatives of building contractors, house builders and specialist contractors. CIRI registration will be contingent on compliance with building regulations, track record, financial standing, current level of expertise and competence on a category basis, etc.
To further ensure standards are adopted across all the industry, the Government should legislate in order that self-builders cannot opt out of BCAR requirements for one-off houses. Considering that up to 50% of building activity since 2014 has been one-off, we cannot understand the decision to create an opt-out provision for BCAR at that time. The opt-out provision means that these builders do not need to appoint designers, competent builders and assigned certifiers, nor is there any requirement for development of an inspection plan. This is unacceptable. I will not be popular for stating this, but all one-off builders should be subject to the standards set out in BCAR. There must be a level playing field in respect of regulation if the consumer is to be truly protected.
The CIF fully supports the implementation of the Building Control (Amendment) Regulations 2014 as an effective tool to protect consumers and ensure compliance with the building regulations. Further legislation is now required to put CIRI on a statutory basis. This will provide the mechanism for assessment of builders’ competence and experience for registration, and also provide a means to penalise registered builders where breach of obligations under building control arises. This can include removal from the register. I reaffirm our commitment to standards in the industry and will work with the wider breadth of stakeholders to ensure our building regulations stimulate sustainable quality construction for the consumer.
Ms Deirdre NÃ Fhloinn:
I am grateful to the committee for this opportunity to speak about my research, and I have made a written submission to the committee.
I am specialist construction lawyer in my third year of a PhD at Trinity College Dublin. The title of my thesis is "Consumer remedies for defective dwellings: devising a model for effective redress", for which I have been awarded a scholarship by the Irish Research Council, supported by the Housing Agency and Dublin City Council. I was in practice as a solicitor for 14 years before starting a PhD at Reddy Charlton Solicitors here in Dublin and as in-house counsel at London Underground, in each case specialising in construction law.
I would like to provide a synopsis of my submission for the benefit of the members, following which I am happy to take questions. Numerous housing defects have come to light in Ireland in recent years, which have highlighted the lack of effective, accessible legal remedies under domestic law. Speaking as someone who has examined the legal context for these housing failures in detail over the past four years, I have grave concerns that Ireland will embark upon a major programme of building homes without considering lessons learned, and without improving legal remedies for home owners. My submission, and the preliminary recommendations emerging from my research are grouped under the themes of reform, remedies, and regulation and I will briefly address each. I will use the term "home" to include both houses and apartments.
Irish law is stacked against home owners who discover defects. We are all familiar with the stories of warranty policies that failed to provide the cover that home buyers expected, and with the problem of widespread insolvencies in the construction industry which left many home buyers who no-one to pursue for defects.
The Building Control (Amendment) Regulations 2014, which were mentioned in detail by Mr. Fitzpatrick, with their requirements for periodic inspections and certification by those involved in construction, have undoubtedly contributed to a cultural change in compliance with regulations, but they did not address the underlying problems of Irish law and practice that left people without legal remedies. Irish law is unclear in a number of important respects with regard to remedies for building defects. The relationship between sellers and buyers of new houses in Ireland is contained in two contracts: a contract for sale of the land or a lease in the case of an apartments, and a building agreement, usually in the form of the building agreement agreed between the Law Society and the CIF in 1987.
That agreement is entered into with the first purchaser of a home, who is the only person who may sue under that contract. It is drafted on the basis that it will be signed under seal, for which the period for bringing proceedings is 12 years from the date of breach of contract. The agreement contains a warranty in favour of the buyer but if the home is sold during that 12-year period, the agreement does not transfer with the house, and the benefit of the warranty is lost.
I mention in my submission the statutory duty in English law for builders to carry out their work in a workmanlike manner with proper materials in order that the house is fit to live in when completed; this duty is owed to the first and subsequent purchasers. I also refer to the law of New South Wales, which implies warranties into contracts for building work, which also pass to subsequent purchasers. The Sale of Goods and Supply of Services Act of 1980 implies a term that a provider of services, which would include a builder, will supply the service with due skill, care and diligence, using materials that are sound and reasonably fit for purpose. This is an important protection, but the term also remains with the building agreement and, therefore, the first purchaser of a home if the home is sold during the 12-year period.
In Ireland, a second purchaser may be able to rely on a defects insurance policy, which should transfer with the property, but which will be subject to various exclusions and limitations. Defects policies have an essential role to play, but will often provide substantially less protection than the first buyer would have had by law.
Another problem is that an action may also be statute-barred before an owner has had the opportunity to identify and investigate a defect in their home. The Law Reform Commission recommended a change in law to deal with this in a 2011 report in order that time for bringing proceedings would start once the owner knew or ought to have known of the defect, but this has not been implemented. Even where the standard building agreement is used, solicitors acting for builders may include unfair terms in the agreement. In the past these terms have included limiting the buyer to one snag list, imposing short timescales for snagging, and allowing the builder to change materials, specifications and even dimensions of a site or building after the contract is signed. The High Court banned the use of a number of sample terms in 2001, but this was still a problem as recently as 2016.
Legislation could be introduced to provide for minimum mandatory terms that would apply in all contracts for residential building work and that would pass automatically to subsequent purchasers.
These problems are not new. The Law Reform Commission described them in 1977 and again in 1982 in a report that included the defective premises Bill. The Bill includes a statutory duty on a person undertaking or executing work in favour of the person who commissioned the work and any person who acquires an interest in it – for instance, the second purchaser in my original example - to ensure the work was undertaken in a good and workmanlike manner with suitable and proper materials. The Bill never passed into law.
The Law Society of Ireland building agreement also contains an arbitration clause. Recent research suggests that many consumers have little understanding of the effect of an arbitration clause. In parts of Australia, arbitration clauses may not be included in building agreements with consumers. Arbitration can be a daunting, costly and time-consuming process for a home owner. The same can be said of bringing proceedings through the courts.
Cost-effective and accessible remedies are an essential part of housing quality. Even if compliance with building regulations has improved dramatically following the 2014 regulations, some percentage of new homes will have defects. Remedies are essential when defects emerge.
A review should be carried out of the operation to date of the Building Control (Amendment) Regulations 2014, as well as the resourcing and enforcement activities of building control authorities. The Food Safety Authority of Ireland provides a model for a transparent regulatory system. Under that system, the authority publishes annual reports and significant amounts of information on enforcement activities. This is not done by building control authorities in Ireland in general. Little information is available in respect of their activities.
I suggest that an Irish building authority be established to administer building control on a nationwide basis. A single national building inspectorate service was part of the programme for Government in 2011. The infrastructure is in place with the building control management system, which is a national system for lodgement of certificates and other documents required under the building control regulations. The authority could monitor local inspection and enforcement of building control, serve as a hub of knowledge gathered from throughout the country from building control activity and have a regulatory role in licensing those involved in construction.
I will conclude with a quotation from the Law Reform Commission report of 1982. It was made in response to the suggestion made at the time that increased protection for consumers would increase the cost of houses. The Commission stated, "Economies achieved at the expense of defective building work were not in the interests of purchasers or lessees of houses." Now that we have evidence of tens of millions of euro being been spent by the State and home owners to deal with housing failures, I suggest that the cost of ensuring quality housing and effective, accessible remedies for defects must be seen as an essential part of the cost of building homes.
Mr. Eamon O'Boyle:
I thank the committee for inviting me to contribute in respect of its review of building regulations, building controls and consumer protection. In particular I have been asked to address the issues around fire safety within buildings and how they are detected, problems with past buildings and the procedures currently in place. I hope I can assist the committee in its important work.
I am a chartered engineer. I specialise in fire safety engineering. I am managing director of a consulting engineering practice, Eamon O'Boyle and Associates, established in 2002. Prior to establishing Eamon O'Boyle and Associates, I was the assistant chief fire officer in Dublin Fire Brigade and had responsibility for the administration and implementation of regulatory fire safety throughout the greater Dublin area. I propose to address the issues I have been asked to address as follows: to discuss issues around fire safety; to discuss how deficiencies have been detected; to outline problems with past buildings; and to outline procedures now in place.
I will address issues around fire safety first. Buildings are designed with in-built fire safety measures based on robust construction and properly designed services, for example, electrical services. The fire design for buildings, other than houses, is approved by a building control authority by way of a fire safety certificate. The major issue that has arisen is the failure to implement aspects of the design. In buildings where there are interdependencies, for example, apartments, hospitals or office buildings, a fire in one area can affect another area not directly involved in the fire.
I have provided the committee with some photographs and sketches. I will refer to these now. They illustrate the typical deficiencies observed. A key feature in these sketches is poor fire stopping. By fire stopping, I mean the methods used to seal around openings in fire walls for the passage of pipes, wires or ducts. Fire stopping also refers to the closing off of cavities to prevent the spread or smoke from one part of a building to another. Image 1 on the screen is a photograph of pipes that go through a wall. The photograph shows how easy it would be for fire or smoke to go from one part of a building to another. The second photograph shows how this can happen as well. Work has not been completed properly in the building in that photograph. The third sketch shows the mechanism by which smoke can move from one part of a building to another. The image on display shows an apartment at a lower level where there is a fire and how the fire can spread to an independent apartment located overhead. It illustrates how the ingress of smoke occurs if fire stopping is not executed properly between the floors and around windows.
It is evident from these images that fire stopping is critical to fire safety within a building. Another aspect of fire safety that needs to be addressed relates to active fire safety systems. These are features designed to operate in the event of a fire or power failure. Examples include fire detection and alarm systems, emergency lighting and sprinklers.
Fire safety management is another factor. This concerns: ongoing maintenance of active systems; good housekeeping, for example, the removal of combustibles; ensuring the availability of fire exits; and the development of procedures relating to actions to be taken in the event of fire. Passive fire protection is another factor. This is developed to slow the spread of fire through use of fire-resistant walls, floors, and doors, among other examples. An integral part of a passive fire safety system is referred to as fire stopping, an element to which I have referred already.
Active systems and fire safety management systems require ongoing monitoring to ensure appropriate maintenance and to guarantee appropriate actions are taken in the event of a fire. On the other hand, passive systems are provided at construction stage and must be installed correctly to ensure effectiveness. Fire stopping is generally concealed behind plasterboard or in door frames. It is hidden before the building is used and deficiencies only become apparent during a fire survey, generally referred to as a fire risk assessment. The absence of passive fire systems can also become apparent when a fire occurs - the most serious situation. This is the key focus of this presentation.
Generally speaking, these deficiencies are detected by two methods. The first becomes apparent during the outbreak of fire when heat or smoke travels from one part of a building and emerges in another. This is shown in the diagram to which I referred earlier. The other becomes apparent during what we term a fire risk assessment, which is usually undertaken by a fire engineer as part of a survey of the building.
Problems with past buildings relate to buildings constructed prior to the introduction of the BCAR system referred to by previous speakers. In order to address these, we need to describe the regulatory system that applied previously as well as the extent to which it still applies. Under the Building Control Act 1990, building regulations in respect of fire safety were introduced in June 1992. At the same time, building control regulations were introduced. These made it mandatory to make an application for a fire safety certificate. A fire safety certificate application is assessed by a building control authority and is either granted, granted with conditions or refused. The certificate states that if a building is constructed in accordance with the application, it will comply with the building regulations. The application contains details of how compliance with the fire safety requirements of the building regulations is to be achieved.
Many of the high-profile cases that have appeared in the media and that have been witnessed by my company have had fire safety certificates granted, but the design, as described in the application, has not been complied with. This is particularly true in the case of passive fire safety systems. In my experience, some applicants are satisfied to have a fire safety certificate but do not understand the importance of compliance. In many cases, the fire safety certificate is viewed as an administrative requirement and not as an important design safety document. While many high-profile apartment buildings have received media attention, it is worth noting that office blocks, hospitals and other buildings may have been constructed with similar defects during the busy building period.
I will outline the procedures now in place. Since the introduction of the Building Control (Amendment) Regulations 2014, it is mandatory to appoint professionals to undertake inspections and provide certification that building regulations have been complied with.
While the BCAR system is still in its infancy, I am of the view that it will provide a mechanism where at the very least buildings are inspected at all stages during construction. I also believe that it will provide a level of consumer protection and that it must remain under continuous review.
It is worthwhile examining the system that operates in the United Kingdom where codes and technical guidance are similar to those which apply in Ireland. During the design phase in the United Kingdom developers or builders have the option of going to a local authority to have their designs approved or to use independent inspectors. This contrasts with the Irish system where only the Building Control Authority, BCA, can approve a design or fire officers of the BCA in the case of fire safety. Staff shortages may prolong decision periods which leads to frustration within the construction programme. The builder or developer generally provides 24 hours notice to enable the local authority to inspect at these key stages. Once all inspections are complete, the BCA provides a completion certificate for the building prior to occupation. In contrast, in Ireland, that job has been effectively outsourced to the private sector by way of the BCAR which is used by qualified professionals.
In summary, there are significant fire safety legacy issues associated with some of the building stock nationally. It is possible to address these issues in a proportionate way by undertaking a national programme of fire risk assessments. Priority should be given to buildings in which people reside or sleep and other buildings should be assessed on a risk basis. This approach will take time but it is necessary as there is strong evidence that there are deficiencies and it is essential they are identified and remedial action taken in a planned and methodical manner based on risk and within an agreed timeframe.
I thank the witnesses for their presentations. By way of background, the reason for this hearing and the hearing next week is that several of us in respect of our constituencies but also through discussions in the committee are concerned that we need to better understand the new regulations and the important issues raised by cases that have gained a high media profile. The purpose of these hearings is for the committee to issue a report to examine these issues and, if required, we will make proposals to Government for changes to legislation.
Most of us have had some dealings with the issues raised today. The witnesses are the experts, which is why we invited them here.
Do the witnesses think there has been enough time since the regulations changed in 2014 to assess whether they are adequate to fix the problems that existed prior to that date? I am particularly interested in the content of the regulations but also in compliance because while there is a move to more inspection, and this is not to question the professional integrity of any those carrying out inspections, it is my sense that when it is outsourced someone is brought in who is not independent because he or she is being paid for that inspection and certification. Is that the best regime we could have?
While we know of the high profile cases, many of us know of constituents who hear that the neighbours have accidentally come across firestopping that was not done. One does not just see that, one has to be renovating one's house to discover it. They wonder should they check this themselves and, if so, what they will find and what will be their liability for rectifying those problems. How widespread is the non-compliance although there are fire safety or other certificates? If there is to be a national fire risk assessment programme even just to consider buildings that might pose a high risk because of the time they were built, that could be a big programme. How would that roll out?
The committee is having a separate discussion and the Government is undertaking two pieces of research to find ways to bring down the cost of producing private sector units, in respect of building, compliance, land, financing and tax related costs. Ms Ní Fhloinn mentioned this. Many of us are keen to find a way to reduce the overall cost of producing units without in any way compromising standards and compliance with standards. We would be interested in witnesses’ thoughts on whether there is a way to bring down the cost while also increasing standards and compliance.
The area we are most concerned about is what happens the homeowner who discovers the defect. In cases I have been directly involved with, the clear impression is that unless the inspectors were able to find some way of negotiating outside the formal mechanisms with a developer who is still trading with a local authority, which may have had some involvement in the development, the cost for the homeowner can be very substantial. Even for relatively small levels of firestopping it can be thousands of euro. Consumer protection is the one aspect that is failing absolutely. I would like to hear the witnesses' views in as much detail as they can give on what needs to be put in place, such as changes to defects insurance or other mechanisms. If I buy a CD today and it is broken I will bring it back to the record store tomorrow and get a replacement. Most people think it is the same for most things they buy. A house is the single biggest purchase most people make in their lives yet they find when major defects are discovered, unless they are willing to take a civil action against somebody to fight it in the courts, they could be left with the full liability and risk. The committee will want to come forward with suggestions on that.
The purpose of this report is to offer solutions, not to lay blame, criticism or to play politics. It is to set out solutions in the context of the forthcoming building control Bill, the heads, or a draft of which, the Minister says we should have before the end of this session. I am interested in hearing, in as much detail as the witnesses can give, what they think needs to change in the primary legislation or in regulations on standards, compliance, consumer protections and remedies, or in terms of implementation and policy areas that might not require legislation or a change of emphasis by State agencies.
I welcome the witnesses. I have met several of them before. I think Mr. Fitzpatrick was once my local county manager or assistant county manager. I welcome their comments, particularly what Ms Ní Fhloinn. If I buy a property that is built by a member of Mr. Fitzpatrick’s association I presume that what I am getting is as permitted. Instead of outsourcing the responsibility to Tom, Dick or Harry, whoever that might be, whether the local authority or the fire expert, all the liability should rest on the association or the professional who signs it for the association.
Part of that is how the membership is policed. Has the witness ever kicked any member or any builder out of the Construction Industry Federation? People would go to a member of that association in the belief that they would meet certain standards. How does the witness exclude members from his association? Has that ever been done?
It has been suggested that part of the solution is that builders should provide a significant fund available to meet scenarios where people avoid their responsibility or go bankrupt. A builder can be here one day and gone the next. The Construction Industry Federation should have a significant part to play in assuring and funding the things that have to be done.
To return to the role of local authorities, I may be misquoting the witness but he said at the beginning that there was a lack of supervision during the boom. Is that a fair summary of what was said? It was implied that there was a lack of supervision during the construction period and that local authorities were not doing their job. If that is what the witness said I would agree with that. They were not doing their job. Huge fees were charged for planning permission and yet, in terms of numbers, there was a total lack of professional people within the local authority to do the work that needed to be done. Much of the infrastructure that was built above and below the ground was very poor. As Eamon O'Boyle said, much of it is unknown but it is out there. We do not know where it is. The witness was suggesting a series of audits based on the perceived high risk of fire hazards, for example, in certain types of construction. I would like to think that whatever report this committee comes up with would put the onus back on the Construction Industry Federation, and particularly the builders. Where does the Construction Industry Federation stand on those matters, what is it doing about it, and what has been done up to now to protect consumers? Most people who buy a house are in hock for the rest of their lives. They buy innocently and in good faith, buying houses from planning permission. In many cases that is exactly what they get, but in many cases they do not.
Mr. Hubert Fitzpatrick:
I will start and my two colleagues can join in, because quite a range of issues have been raised. Deputy Ó Broin asked if we have enough time to assess whether these regulations are adequate. Certainly the culture within the industry has changed significantly since the beginning of the regulations, from design of the buildings to inspection plans to appointment of competent persons. I am aware that there is a huge amount of resources employed to ensure compliance with the building regulations under the new regime. We welcome that and fully support it. We must ensure that we have buildings that are built to the proper regulations and standards and that can be stood over.
On the issue of consumer protection and what needs to be in place, we recognised four to five years ago that there were shortcomings attached to the previous certification process that was in place. By and large the only certification required was post-completion. It was based on visual inspection, in many places, of domestic buildings, and opinions on compliance were expressed at that juncture. That was not satisfactory. We fully supported the introduction of the new building control amendment regulations. There is one piece missing at the moment. We recognised that we require a register of competent builders, and that only builders with competence should be allowed to build structures in particular categories for where they had relevant experience. At the time we set about developing what was called the construction industry register Ireland in conjunction with the Department of the Environment, Community and Local Government, and that was included as one of the Government actions to be put on a statutory footing during the current Government. We would hope that that register would be put on a statutory footing, that it would be mandatory for all builders to be on that register and that it would be an offence for them to build anything for which they are not registered. The advantage of a register of that nature is that builders would have to ensure that they undergo continuous professional development to ensure that they are kept up to date with the changing regulations and standards that are introduced by the Department of Housing, Planning, Community and Local Government. We would like to see that approved.
In terms of consumer protection, it is fair to say that the insurance policies that are now in place differ greatly from the warranty schemes that would have applied in the past. The insurance policies now available includes first-party insurance cover, so that in the event of the claim the policy holder does not have to go through the builder any more but can go straight to the insurance company to remedy any defect which might be identified. The policy in these situations attaches to the house or unit, and that would subsequently transfer to subsequent purchasers of that unit, so that if someone buys a house or an apartment the policy will be in their name, and if they sell that unit two or three years down the road the policy will transfer to subsequent owners of that unit so that they will have the benefit of that policy for its term, which is generally ten years. The policy today covers defective workmanship, design and materials. The previous materials were purely structural policies. The policies offer much greater protection than before. They offer protection from fire safety, dealing appropriately with radon, mechanical equipment and drainage. Some of those policies can be for up to €200,000, plus €50,000 in respect of various plant and equipment. Any purchaser of a new residential unit will insist on having that insurance policy because they will not be able to secure funding from their bank or building society for a mortgage. Any of our members that are building new units for sale on the open market will insist on having that insurance policy in place, because if they do not they will not sell it. In effect it is mandatory in the market place because funders will not advance mortgages without that cover.
With regards the issues that Deputy O'Dowd raised, the buildings must be constructed in accordance with the permission. When one is selling a building on has to ensure that there are certificates of compliance with planning issued at that particular stage. In addition, under the new building control amendment regulations, BCAR, requirements the builder must give a certificate of compliance on completion that the building meets the building regulations. The assigned certifier must also certify that the building has been built in accordance with the building regulations. The building control authority has the ultimate power to refuse to register that building on the register, and no sale of a unit can or will take place unless that unit has been registered with the building control authority. The measures are much stronger than they have been heretofore because there was no statutory requirement for any of these certificates in the past. The insurance policy that is currently available in respect of all residential units does provide an adequate fund to ensure that various defects can be remedied and that people can gain direct access to the insurance company, which is a major change from what happened before.
With regards the role of the local authorities, certainly we would love to see the building control authorities resourced more effectively so that they have the adequate resources to carry out more inspections. The industry is not fearful of inspections. It supports more inspections. The more inspections, the better. Certainly the culture within the industry is much changed in terms of ensuring that products purchased for use in the buildings comply with the construction projects regulations and that all elements of the workmanship comply with the building regulations, and that there is an appropriate chain of responsibility established within the overall building process. We want the construction industry register Ireland, CIRI, in place on a mandatory basis. The current regime provides that a registered member should be capable of being removed from the register if he has breached the requirements of the building regulations. Those penalties would be determined by the independently appointed registration board, who have teeth and make decisions on an independent basis.
I have covered a range of issues and my colleagues Mr. O'Reilly or Mr. McKeon might like to elaborate on some of those key points.
Mr. Mel O'Reilly:
Deputy Ó Broin asked if sufficient time has elapsed to assess whether or not the new building control amendment regulations regime has changed things. It has changed things on the ground but if we are to find any way of assessing that objectively then some more time would be needed. Very few buildings have been completed and occupied over that period to give any kind of representative sample. From a working building contractor on the ground - we build under contract rather than for sale - we can see that the whole regime has changed enormously by what is done at the start with design drawings etc., by the inspections of the ancillary certifiers as well as the assigned certifiers and by what we ourselves do in relation to inspections and the compilation of construction records. There is a cultural change afoot in the industry and it is gaining momentum as time goes by. There are, however, two issues; some more time would need to go by before it is fully right through the industry and - not to beat the drum again - we need some sort of statutory basis for the CIRI. Measures are required to ensure only those who are building properly are allowed to continue to build. This is essential.
Mr. Brian McKeon:
I will follow on from that, as someone who has been involved with the BCAR since the day it came into being, I can see there has been a huge change of culture. Reference was made earlier to the assigned certifiers we take on. We pay them but they can only be members of three institutions, the Royal Institute of Architects in Ireland, the Institution of Engineers of Ireland and the Society of Chartered Surveyors Ireland. The certifiers also fall under codes of practice and ethics. They take their job very seriously and there is no bending of the rules. I can state quite categorically that they take their role very seriously. They must sign documents prior to starting and sign the end document, with me as the builder, to say that the property is built in accordance with the building regulations. Their professional indemnity insurance is on the line and their job is on the line, as is mine. When the Construction Industry Regulations Ireland, CIRI, becomes statutory then if a person does not comply with the rules and regulations he or she would be removed from the CIRI and that is their livelihood gone. That is the reality. From a consumer point of view the quicker that comes into being the better because this industry will be a better industry.
Ms Deirdre NÃ Fhloinn:
I will go back to the first point made by Deputy Ó Broin around whether or not we have had enough time, since 2014, to assess the performance of the building control regulations. The building control regulations are part of the regulatory regime that operates for construction in Ireland. There are different elements to this regime. The planning process is another part of it. It is part of a regulatory regime. Any process like this needs to be assessed for its effectiveness and needs to be tested and monitored. As Mr. O'Boyle has said, it needs to be kept under review. I believe that three years is certainly enough time to be able to find out from the building control authorities their view on how the building control regulations are working in practice. There are a number of procedures referred to in the code of practice for inspecting and certifying buildings from September of last year. These involve the building control authorities interacting with the building control management system, which is the online system for submission of documentation around building control. Procedures are referred to in the code of practice whereby building control authorities, for example, can use the system to assess whether or not the assigned certifier has resigned from their role on a project. This might indicate if there are difficulties on a project and it might prompt an inspection. Part of what we should be looking at in building control is whether or not the regulatory model is fit for purpose. Consider the model for the regulation of food safety - which is one model I like to refer to - and which operates in a relatively similar way to building control. There are inspections happening all over the State on a regular basis and these are fed into a regulatory system that involves an audit and review of how effective the system is. If one looks at the annual reports of local authorities from 2015, most of which are available online, one will find virtually no reference whatsoever to enforcement activities by building control authorities. Usually there is quite a lot of detail about other types of enforcement activities, for example in relation to planning. There is, however, very little information on building control.
I will make this general point, which is also referred to in the report of the UK's all-party parliamentary group for new housing in England, published in July last year. The report consisted, essentially, of a review similar to the one being carried out by this committee. That group heard evidence that many consumers do not really understand the roles of their local authority or building control. From my research and from people I have spoken to I believe there is a lack of understanding about the limit of what the building control authority is able to do and how frequently building control inspections are carried out. If we look at the annual reports of the local authorities some building control authorities are inspecting 12% to 15% , which is the target set in the code of practice. Some are inspecting 50% of new buildings. That information needs to be captured, aggregated on a national level and analysed. The BCAR was such a substantial change in practice that it should absolutely be possible to assess performance, even though it may well be there are not defects or claims yet coming out from the system it set up.
I also wish to address Deputy Ó Broin's question about what happens to owners who find defects. Again I refer back to one of the observations of the UK all-party parliamentary group report that builders need to put consumers first. Their primary focus should be on the consumer. The report found there is a huge gap between what people think they are getting and in what they actually receive in practice in respect of warranties and the finish of their homes. Consumer education is very important. The point around effective redress is made several times in that UK report and is also referred to in my submission along with timely, effective and cost effective dispute resolution to avoid arbitration and litigation.
My final point is on defects insurance, which has an essential role to play. I believe that a warranty from a builder should transfer with a new housing unit. There was a case before the High Court, decided in 2016, with respect to a seriously defective house in Donegal. It was a one-off build and I use it as an example of precisely the problem identified by Mr. Fitzpatrick where one-off houses were exempted from the requirements of building control in 2015. This was a decision I disagreed with at the time and I still disagree with it. One-off houses are just as likely, and no less likely, to have defects. Much of our litigation has been in regard to one-off houses. The house in Donegal had defects and in order to fix it the estimate put on the claim by the plaintiff's surveyor was €277,000. Even with the policy that might be in place today for that unit and if €200,000 is the limit of the policy, who would pay the €77,000? There must be a remedy in contract, alongside the defects policy.
Mr. Eamon O'Boyle:
Deputy Ó Broin asked if the BCAR has been in place long enough to allow an assessment. It is not yet known. I am an assigned certifier on some projects, but it has been very few to date because the building process has not happened. I reflect what the other speakers have said and it is my sense that there has been a huge change of culture in building contractors and professionals.
The degree of detail required is now quite extensive in terms of the inspection plans and all the material that goes with them. I will keep housing on one side and multiple housing, that is, apartments on the other. In the case of the latter, there are interdependencies and one apartment is dependent on the other. There are requirements to construct common spaces and they have to operate the way they should. If one piece is missing it has an impact on everybody.
The question of associated costs was raised. The building control regulations added to the costs, with the need for a signed certifier, ancillary certifiers and other people for various responsibilities. My preference would be to have very good people doing the work. Consumer protection is achieved by good people doing their jobs properly. The CIRI is the way to go and there needs to be ongoing training not just for contractors, but for people who can contribute to fire stopping. Fire stopping is important because it is like the airbag in a car - one does not know if it works until one crashes. If it is not in place, there is a huge impact.
We were asked for solutions. The BCAR system is operating well but refinements could take place. I was involved in a project in Germany some time ago where the developer had to pay for the appointment of an independent inspector who was employed by the local authority, creating an arms-length arrangement which seemed to work pretty well. I disagree with Ms Ní Fhloinn on the need for a nationwide building control authority because when building control authorities make assessments on plans, they do so on the basis of local knowledge, which contrasts with the Food Safety Authority. For example, a building would have a water supply for fire fighting and the local fire chief would know about it. I do not think this could be dealt with nationally in the same way. Dealing with things locally would be preferable.
Deputy O'Dowd asked about inspections that were carried out by local authorities. There was a lack of professional staff in local authorities to undertake inspections and there was no oversight but the Building Control (Amendment) Regulations plugged the gap in one fell swoop. Professionals carry out the work now, even though they are not employed by the local authorities, and there are substantial penalties for professionals who do not do their work well. They cannot even occupy the building if they are not on the register. I will leave the matters of sinking funds and money to my legal colleague.
Mr. Hubert Fitzpatrick:
Deputy Ó Broin asked about building costs and we are working with the Department of Housing, Planning, Community and Local Government in another committee to address them. We have to be certain we do not do anything to compromise standards. A recent study by the Society of Chartered Surveyors Ireland showed that 50% of the overall costs of a house are construction costs.
Mr. Mel O'Reilly:
The best way of protecting the consumer is to prevent defects occurring in the first place. There are different stages in building control and the competency of both the design and the builders is important. However, CIRI is not just to be a register of builders but also one of specialist subcontractors. Mr. Eamon O'Boyle said fire stopping was essential but it is not covered by a trade - it is done by people who are semi-skilled. The objective of CIRI is to ensure that people who carry out these essential works are trained in the exercise of those activities. In the longer term, the builder will be competent but he will also only employ competent contractors who are on the register.
I did not get an answer to my question on the policing of the organisation of builders. I asked whether members of the association had ever been kicked out of the association. How does the CIF regulate members?
This is a very important question. I agree with everything I have heard but the problem for us is whether we can believe what the witnesses say about building in this country. It is critical that they police their membership and that being a member of the association gives credibility. It does not make sense, from a regulatory perspective, that they have only ever kicked out one member.
Mr. Hubert Fitzpatrick:
We, in the federation and the association, want CIRI to be put on a statutory footing and all our members to register. Where members do not comply in any way with their legal obligations and the regulations laid down by CIRI they will be expelled and, if they are, they will also be automatically expelled from the CIF and the Irish Home Builders Association. We want an organisation with teeth which supports standards. If members do not comply with standards they will no longer be members of the organisation.
Most of many questions have been answered. It is sad that, since 2015, so many buildings have been affected. There have been good buildings but there were, especially in the boom, many buildings that were not regulated by the local authority or others. It is a massive issue. There is a recommendation for more homes and fewer complaints, based on a model from England. There are ten recommendations, one of which is to set up a new ombudsman for building and sales. I am a firm believer that if a person has a home it is their home for life, their castle. We have to make sure that the rules and regulations are enforced and that people who have homes feel secure in them. Over the years there have been issues with fire safety and wheelchair accessibility, among other things, and I have seen apartments built with no light. There might be a tiny window and I cannot understand how this was allowed to happen. It is a bit too late now but we are where we are. The programme for Government contains a commitment to build thousands of houses between now and 2021 and it is crucial that these buildings are regulated and controlled.
The biggest issue over the years was accountability.
There needs to be accountability for this. In the future, once that is in place, people will have lovely homes and will be very happy in them. I know of many cases over the years which I felt should never have been approved. I would be concerned about the once-off housing as well. There are still many concerns that need to be addressed but in future, everybody should be working in the interests of the homeowner and the builder. There are definitely many issues that need to be addressed.
I thank the witnesses for their presentations.
I have seen it all when it comes to building over the past years. I was at many meetings about pyrite, mica and so on. The witnesses mentioned a number of things about local authorities and more resources, including fire officers and such. There is no doubt that we have many more problems. I know we have a massive complex in Finglas, on the Finglas Road, where there are fire issues, as the witnesses are probably aware. Fire-stopping is an area that the witnesses mentioned and in which we need more expertise and to have people on-site and giving advice. We have seen it happen there. We have also seen the mica issue in Donegal. It has not been properly addressed, even now, and it is a massive issue. I know Ms Ní Fhloinn mentioned that the law is stacked against homeowners who discover defects. The witnesses said this and I believe that is true at present. There are still many issues there. One of the issues the witnesses mentioned was the transfer of policies. It makes sense that there should be some way to transfer those policies over. Just because someone else gets a place should not change what a person is entitled to in those areas.
I have a concern about what the witnesses said on self-builds. They mentioned that people can opt out of the building control amendment regulations, BCAR. I do not know whether that is down to cost or something else. The witnesses might be able give an explanation on what they mean by people being able to opt out. I believe we should have the construction industry register Ireland, CIRI. Some builders behaved very poorly indeed and in some cases, I consider the behaviour to have been criminal. We cannot afford to have such builders and those people who were on site and who took part in some of this coming back. Some of the construction I saw was just appalling and I went to many estates and had a good look at them. The certificate of compliance has to be properly enforced. We have to make sure that we have better standards than what we had before. What happened in the past is just not good enough.
Foremen on sites was a big thing in the past. That seems to have gone downhill for some reason. We do not seem to have that emphasis. We had fewer problems when we had foremen on sites. I do not know if that is Mr. Hubert Fitzpatrick's experience, but it is my experience that shortcuts were taken during the so-called boom. That disappeared. I also worry that, over the years, there were practically no prosecutions or actions taken against many of these builders. We have seen all these things that have happened, all the bad building and some matters bordering on criminal, and yet we have never seen any real action taken against these people. I do not know if the witnesses have opinions on that.
The last thing I want to mention is about quarries and builders and the defective materials that came from quarries and builders' suppliers. I did not really hear any mention of that issue. What is the opinion of the witnesses on that? Is there a need for more controls in this regard? Some very good controls were in place in the quarries in the south of the country but in the north of the country, where most of the issues of mica and pyrite arose, the quarries were a big problem and do not seem to have had the controls and proper mechanisms in place. I would like to hear the witnesses' opinion on that too.
I thank the Deputy.
I might add a few questions as well. I am interested in this whole area of building control regulation and I believe we should be taking it entirely back into local authorities and should have an independent review and inspection regime. I would like a comprehensive inspection regime of all the different stages of construction. I still have concerns that the current BCAR is not doing exactly what it should be doing. While more large-scale developments probably have the resources and skills behind them for assigned certification and auxiliary assigned certification, I do not believe smaller-scale projects would be as strong on the professional side of the regulation.
I refer to the other major issue with building regulation. While we often talk about new builds, much renovation work is going on, extensions are being built and different work is being carried out in commercial buildings where no regulation is being realistically applied. I think fire certification and disability certification have to be applied for and I think it stops there. As a country, we need to educate the people in the value of building control regulation. If we can do nothing else but have people understand it is worth paying that little bit extra for entirely independent inspection, I would be fully in favour of that.
I have several examples, even in my own business, which is the hotel game. I can go back to a very small fire that we had back in the early 1990s, where we zoned fire panels, so we knew it was in a zone but that was a big zone and we had to suss it out. We had a very small fire two years ago but what we had was able to tell us exactly that it was in room 133. Huge advances have been made in fire detection. I have serious concerns about any renovation work that is done where gaps are left in fire safety provision. There is no inspection. From my understanding, there is no inspection with regard to fire safety. One gets a certificate after providing a drawing. It stops there. No fire officer goes out to ensure the information strips are on the door, the doors are closing properly, the sewer pipe going through the wall has been filled in, or to check whatever else. That is not happening. While we are saying the assigned certifier is signing off on it, I still have concerns about it. I am putting my cards on the table.
I had one other constituent who moved into his house 17 years ago but had to move out seven years ago because of an issue. It took seven years to discover what the problem was, and then it took him seven years more to go through the court system. When he eventually got to the court, he was told that he was statute-barred. He wasted €37,000 on legal fees in bringing that case. That was a simple case of the damp-proof course being placed too low, which allowed water to come into the building. I believe, and will be urging my own party, which I think is coming with me, that we need a top-down, local authority approach to building control. We need entirely independent inspection at all the different stages of the building construction industry, and we need to get the people behind us and to educate them in how valuable building control is to them. Mr. Hubert Fitzpatrick said that he would welcome extra resources being provided to the local authorities to allow this happen. I want to ask him whether he would agree that the best place for building control may be with the local authority with a move away from assigned certification and design teams. There are also the smaller developments where the owner of the property has to sign off on a design team and assigned certifications and would have no knowledge of the building industry at all.
Drawings are going in through the BCAR system and I honestly believe that nobody is looking at them. Very few people are looking at construction drawings. I wonder how many developments are actually starting based on planning drawings as opposed to construction drawings. I am concerned that construction drawings are never drawn up for one-off rural houses. I have probably said enough at this stage. I call Mr. Hubert Fitzpatrick.
Mr. Hubert Fitzpatrick:
I will start and then I want my colleagues to come in. We need full accountability in this regard. Deputy Casey asked how many developments start with planning drawings. No development should do so. Under the new building control system, one must submit construction drawings. I share the Deputy's view that many one-off houses may be built on planning drawings which is totally unacceptable. Detailed construction drawings need to be prepared in for all builds.
Should building control regulation rest with the local authority? The current system provides for assigned certifiers to be appointed from within the registered architect, the registered building surveyor and the chartered engineer. It has the potential to work very effectively. The resources of the building control authority should be increased to ensure that they have greater monitoring and enforcement powers. The system can work well.
The problem that arose 17 years ago is an example of what was often the case when we did not have adequate supervision and inspection of buildings built. I hope that that would not happen today. An assigned certifier would ensure at the outset that the damp-proofing is put in at the right area. That is a critical part of any inspection.
We need to educate the public about the value of building control. Many people building one-off houses in particular do not appreciate the value of the current Building Control (Amendment) Regulations and the necessity to have a professional come in and certify compliance with the building regulations. It is for that reason that the opt-out option for people building one-off houses should be removed. These builds should be brought back into full compliance with building control as it is for all other developments.
Any development or renovation works which require a fire certificate will require compliance with the new Building Control (Amendment) Regulations. That should require the appointment of an assigned certifier and a competent builder to undertake those works. If that is being policed effectively, any work, such as the fire certificate, should be fully in compliance with the building regulations. That would address some of those issues.
Some self-builders are opting out because they are of the view that the cost of compliance with building control is a lot greater than it is. It was said it could cost €15,000 to comply with Building Control (Amendment) Regulations. According to our information, the real cost of compliance with the regulations could be closer to €2,000 or €2,500 per assigned certifier. Everybody should have an obligation to prepare detailed construction drawings for anything that they are building.
I will let my colleagues come in with regard to accountability, foremen on site and issues of that nature.
Mr. Brian McKeon:
In regard to foremen, we have more supervision on site now than ever before. Over the past few years, there is more onus on employers to educate and to keep educating our foremen and engineers and so on. There are more courses available. Many younger foremen have been told in college to insist on receiving annual continuing professional development as part of their agreement. There are more courses run by the Construction Industry Federation, CIF, the Royal Institute of the Architects of Ireland, RIAI, and Engineers Ireland to which we send our people responsible for building and complying with regulations and drawings and specifications. It is better now than it ever was before.
Builders phone quarries and builders providers in good faith and order material. We order it according to the specification that is in our possession at the time and we get it delivered to site. We get supporting documentation which says the material is capable of doing what it is meant to do. We have previously been given that documentation by the quarries even though the material did not meet the specification. There were not sufficient regulations. Since then, there are new regulations, particularly in regard to stone, which is detailed in SR 21. There is a regime for ordering stone. When my foreman picks up the phone, he needs to know exactly what stone he is ordering and where it is going. There is a regime where we have to monitor it and know where it is going. There is an onus on us to get it independently tested. Along with test certificates and more documentation than ever before to say that it is fit for purpose, many of my colleagues contact independent laboratories to get verification that the stone is suitable for purpose. We need to do that more and more because we are relying on documentation and there is always plenty of documentation.
Mr. Mel O'Reilly:
As a builder, I yearn for the days when there were old-type general foremen who had come up through the trenches and knew almost everything that moved on a building site. Over the years, there has been an emphasis on third level qualification for almost everything and probably an absence of the same attention to skills within the industry and allowing people to grow in the industry. That needs to be tackled at a national level. If one looks at most sites nowadays, the first thing that goes in is a plethora of cabins to store all the staff that we have on site. As Mr. McKeon said, there is a far higher level of supervision now.
Mr. McKeon has mentioned the quarries.
I doubt the local authorities, without major investment, would be able to supply the skills necessary to fulfil what is required for all of the inspections. Before we had the building regulation system, certain cities had by-laws. An inspector used to come out. From memory, there were about six or seven inspections at the time. Buildings were very simple then. Nowadays, buildings are very complex. I do not think there are very many single designers who could design an ordinary domestic building fully and to the proper extent. They would need input from mechanical or Part L contractors or whatever else. It has become very complex. The current legislation only deals with the role of the ancillary certifier, the builder and the owner but beneath that, as part of the process within the industry, all of these ancillary certifiers, the structural engineer, the mechanical consultant, the electrical consultant, the Part L compliance, fire safety and so on are all there doing their inspections as well. There is a multi-disciplinary approach. Very few buildings we start do not change during the process. Schools might be on the cards for years. If they are built, there will be changes made during the process. Designers have to be on top of that. They are more likely to see all of the issues that need to be done and put in place when that happens. The present system should be given a chance for a number of years to see if it produces the goods.
Ms Deirdre NÃ Fhloinn:
In terms of national review of building control, this information is already being fed into a national system. To come back to my example of the Food Safety Authority, it works as a regulatory superstructure that monitors and supervises enforcement activities and inspections by lots of local inspectors. It could work with our current system of building control. That regulatory superstructure brings a consistency of inspection protocols and reporting of enforcement activity. I went onto the Food Safety Authority website today and I found out the number of closure orders that were made for restaurants in February of this year and the total number of enforcement that were made last year. I went onto the Commission for Communications Regulation, ComReg, website and I found out about a non-compliance notice that was served on Three in the last few weeks.
It is impossible to find that information publicly with regard to building control enforcement. This relates to the question about the public perception of building control. I went to the launch of a county council annual report today, and the report did not contain the term "building control". I was shocked by that. People need to understand what building control means. It needs to have that public profile because that is partly how we will educate people about the value of building control.
On a related point of local authority versus assigned certifier building control, we have set up this architecture now in the building control (amendment) regulations where we have a parallel private and public system but the public system is essential. I become concerned when I hear statements being made to the effect that building regulations compliance is a matter for owners and their teams. It is also a matter for monitoring and enforcement, and the State needs to be in this space. The Deputy asked what people do when they find defects. I spoke at a conference in London last year and I said that when someone in Ireland has a defect and they find out how bad their legal position is, they ring a disc jockey called Joe Duffy. That is partly how we solve some of our governance problems in Ireland. That is unacceptable. People's lives have been destroyed, and we need to consider coming up with proper regulation.
The new homes ombudsman recommendation in the English parliamentary group is one that should be considered. We need to have an accessible dispute resolution process. Coming back to the Food Safety Authority, thousands of calls about food safety are made to its help line every year. The Irish Government has not even set up a helpline for people with defects in their homes, not to mention a regulator.
On the point about building control, public and private building control have different objectives. If I am an assigned certifier on a major project I have a very different set of objectives and duties from the local authority building inspector. They work side by side, and I know from speaking to assigned certifiers that their roles can complement each other, but we have to recognise that the public role is still essential.
Mr. Eamon O'Boyle:
On the point raised by Deputy Ellis about foremen and clerks of works on building sites, the traditional form of general foreman had huge advantages. I can relate an anecdote in regard to one inspection I was involved in recently where parts of a fire wall were not constructed correctly and when I asked the clerk of works, he said that that happened the week he was on holidays because the rest of the place had been done properly. That level of on-site supervision was hugely important.
Mention was made by the other speakers and some Deputies of prosecutions. As someone who was fairly close to the building control and regulatory systems, I know of very few prosecutions that have taken place here and some of those that have taken place were on the administrative provisions in terms of people having started work in advance of the granting of a fire safety certificate and so on.
Regarding the defectiveness of materials the Deputy raised, in my particular domain regarding fire safety and so on, all of the materials we get are manufactured materials so it would not necessarily arise. On the issues the Acting Chairman raised as to whether the work should be undertaken by the local authority or within the private sector, I would not have a major opinion on that but it certainly needs to be done by somebody. The general view among industry practitioners is that the current system is very stringent. I believe it deserves a chance to work. That is fine when there is a fire consultant, mechanical and electrical people, structural engineers, civil engineers and so on within the design team. That can work perfectly well but it is an issue in the smaller scale projects.
Mention was made of buildings where changes are taking place and so on. Mr. Fitzpatrick mentioned the requirement to obtain a fire safety certificate for changes of use. However, there are three categories of buildings, namely, offices, retail and industrial buildings to which material alterations can be made without the need to make an application for a fire safety or a disability access certificate. There is a requirement to comply with the building regulations and our experience is that people we would deal with, particularly in the pharmaceutical industry where compliance is a huge issue, would require one to go through the same discipline, albeit not involving the local authority, in terms of doing it.
Value for money was mentioned earlier. We cannot get away from the fact that building projects are big and cost a lot of money. It is the type of industry where everybody is being squeezed constantly on margins but it is big expenditure and when so much money is being spent, it is important to do it correctly and to have all the professional advice one needs to do it well, and to make sure it is being done properly.
The Acting Chairman mentioned a constituent who had a house in which the damp proof course was installed incorrectly. While I do not want to reiterate the point, we have evidence from NAMA that it had to spend in excess of €100 million to remedy buildings in which it was involved so we cannot be certain that we have a good national stock of buildings. It is evident that there are legacy issues, and that is something we need to quantify to see what all of that means by way of detailed surveys being taken. It can be done over a period of time, but it is something that needs to be done.
I thank all the speakers because the information we are getting is exceptionally useful. I have a number of specific questions. To go back to the issue of the defects insurance about which Mr. Fitzpatrick and Ms Ní Fhloinn spoke in the first round of answers, if I understand it correctly the liability for the cost of the repair still rests with the homeowner, albeit they have an insurance policy which will cover that. There is a cost over the lifetime of holding the policy. Is that the only model in place in terms of cases where defects are found and there is a financial cost to it or are there systems that work in other countries where, for example, if a builder or whoever is found to be responsible they share part or all of the financial liability as opposed to it just coming from the insurance?
Given the complexity of the buildings and the fact that there are so many moving parts in terms of architects, builders, sub-contractors, semi-skilled labour, apprentices and assigned certifiers, what happens if a dispute arises where someone says that they did their part of the properly but someone else did not do their part? Does that disrupt the insurance coverage? That is potentially a complex set of arguments and while these are pre-2014 buildings, issues have arisen which are trying to be resolved now and one of the comments I hear from homeowners is that they get completely locked in with regard to who is responsible for the defect that has been found and how they deal with that.
I wonder if losing one's livelihood is enough of a penalty given the scale of some of the bad buildings, so to speak. I am talking about the pre-2014 ones we know of, but we have to assume that something like that could happen again. Let us hope not but if I am responsible as a developer for 250 apartments that not only have no fire stopping or any fire safety requirements, is it enough for me to lose my right to practise in that profession? Should there not be some greater level of penalty, whether it is financial liability, prosecution etc.? Perhaps they exist and I do not know about them but I am interested to hear the witnesses' views on that.
In terms of there being no bending of the rules, I always work on the basis that I trust people but the harder we make it to bend the rules the less likely the rules will be bent. Arguing for as tough a regime as possible is not in any way casting aspersions on the professional credibility of the individuals but I always get nervous when we are encouraged to take a certain level of issues on professional trust and the good name of the professional because it harps back somewhat to the old self-certification regimes we had previously, although, strictly speaking, I know that is not the case.
I also wonder to what extent any of this can be applied retrospectively, particularly in regard to Construction Industry Register Ireland, CIRI? For example, if I am a contractor of one kind or another and CIRI has been put on a statutory footing and I apply to go on it, if I was involved in something prior to the statutory establishment of CIRI such as a Priory Hall type situation or something like that, could I be automatically excluded from membership?
Again, are there precedents from other jurisdictions for applying such retrospective rules? Ms Ní Fhloinn spoke about effective redress. Perhaps she would elaborate on what she means by that, both for the pre-2014 builds and the post-2014 builds. As regards dispute resolution, how does that happen in other jurisdictions?
Mr. O'Boyle correctly highlighted the difference between the multiple-unit developments and the single or terraced houses. If I buy a home in an apartment complex, for example, are the certificates and warranties I get with the purchase for everything across the boundary door of the balcony? How does all of this conversation affect the communal areas, the communally insured areas, the roof spaces and so forth?
We are also not just discussing new builds. The Government is about to launch a major refurbishment strategy and the committee is putting pressure on it to ensure that we get more than 6,600 of the currently vacant stock back into use over the next number of years. How does all of this apply to what we are hoping will be not just a stock of new builds but also a significant increase in the number of vacant properties being brought back into use?
On the issue of costs, we have seen the Society of Chartered Surveyors Ireland study of the eight housing developments in Dublin. If I recall correctly, the report referred to certification costs of €5,000 to €8,000. However, other industry commentators who have detailed knowledge of this have put other figures into the public domain. In some cases they go as high as €35,000 in terms of overall compliance costs. While some of this is straying into the other work the witness is doing, and I am not asking the witness to comment on that before it is finished, is there a sense from the industry that the level of compliance costs could reach €20,000 or €30,000 on units and is that a concern, or is the €5,000 to €8,000 range from the report of the Society of Chartered Surveyors Ireland closer to the ballpark?
I am midway between Mr. O'Boyle and Ms Ní Fhloinn with respect to the responsibility for the inspections lying with the local authorities and fire officers. They have the local knowledge and the Acting Chairman and I are strong defenders of increasing the capacity of local authorities to do that work. However, I like what Ms Ní Fhloinn said in terms of not taking that away from local authorities and fire inspectors but having some type of State-wide building authority that ensures consistency, collation of data and so forth. If it is not about taking the responsibility away from local authorities or fire officers but working to increase, enhance and strengthen that and provide good data, is it something that could be helpful to local authorities in their work?
On the issue of effective redress, the big cases in the public domain are units that are all pre-BCAR. We will be examining recommendations for future legislation and consumer protection. Are any of the witnesses aware of other jurisdictions that have introduced stronger consumer protections and allowed them to be applied retrospectively for a limited period of time to buildings that were built prior to those regulations coming into effect? Is that legally possible and has it been tried in other jurisdictions? Is it something the committee should examine, so it is not just somebody who acquires a property built today who gets the better protections but also the people who are currently seeking assistance from the State to deal with the legacies of the time pre-2014? Can we do something for them in this as well?
I regret that I remain cynical about our builders, not just in the context of my past experience but also on foot of my current experience. About a month ago I visited a local authority building site where houses have been completed in the past couple of years. I visited a particular house the interior of which had been destroyed with condensation. The tenant had gone through numerous fights with the council and there were more battles when I got involved. We eventually discovered, as in the case 17 years ago, that a damp-proof course was not put into the house involved 17 months ago. The house was built in the wrong location and potentially it could flood regularly. I could not understand how the builder got away with that because it was disgraceful, shameful and unacceptable. The mother, who has five or six children to look after, has been left in a disgraceful state by a local authority that passed a totally unacceptable house. It has been left this way. There have been dehumidifiers in the house for a couple of months. They are on 24/7 in some of the bedrooms. She has been told that if this does not work the solution is to knock her house down. This is happening now. I have no doubt that when I look up the CIRI or the construction register the builders concerned will be on it. Will they be kicked out? I cannot believe something like this is still happening. That is the problem - the lack of credibility.
I acknowledge the major changes that have taken place. That lady should not have had to ring me because the house should never have been built. However, she should have been able to make a call to a one-stop shop independent authority to say, "There is something wrong with my house and I do not know what it is. Will you sort it out for me?", rather than having a long battle with the council, getting me involved and having all sorts of people coming and going, day and night. This is still the reality. Eternal vigilance is the price of peace, so there must be continuous vigilance in respect of all of these matters. I cannot understand a builder who would build a house, get a good price for it from the local authority but not put a damp-proof floor in it. It does not make sense, but that is what they did. It is callous and a disgrace. That will happen again and again unless we maintain what will be, in a way, a bureaucracy. It must be an independent one-stop shop to which a person can make a complaint and then it can come down like a ton of bricks on everybody concerned. The professional bodies should be involved as well. Johnny Murphy or whoever signed off on that house should get the bullet from his association. He could not professionally sign off on that house and say it was built properly, because it was not. That is the eternal problem we have.
I welcome Ms Ní Fhloinn's comments and those from Mr. O'Boyle. We must go further and look at best practice in other countries. However, the penalties should apply to builders in real time. They should be blacklisted. If some guy does this, he should be gone for all time. If he does that, he is not a fit person to build a house ever again.
I have a few final comments. We are all concerned because we are heading into another significant increase in property construction, but we are doing so with a lack of skills. There is a significant skills shortage at present. The practical operation of the BCAR system is that if I am the owner of the property that is being developed, I am paying the assigned certifier and the auxiliary certifier. In theory, they are under my control. If I am about to pour concrete and have five lorry loads of concrete waiting, but the assigned certifier suddenly realises there is something wrong with the steel, there is immediate pressure because of the presence of those five lorries. That is the practical operation of it that concerns me. That is the reason an independent control is required in respect of building control regulations into the future. That is the right way to proceed. Mr. Fitzpatrick said he would welcome further building control inspections, but there is no point in paying for it twice. There is no point in the private sector paying for it and then in us having to pay the public sector to watch the private sector. If the public sector could do it entirely, I would favour that system. Equally, I am of the view that, in light of the framework agreements, we can get the expertise that is required to inspect buildings.
The local authorities are only inspecting 10% to 15% of buildings, if they are even doing that much.
They do not do so at all stages because buildings are picked at random. We need to put in place a more comprehensive system, with independent control and inspection.
Mr. Hubert Fitzpatrick:
In the event of a dispute over building controls, there is scope to refer an issue to the Building Control Authority for clarity. With regard to penalties and people losing their livelihood, other penalties are incorporated in the Building Control Act, up to and including imprisonment, and these penalties must remain.
The certificates which apply are mandatory and there is no scope for changing any word in them. The certificate is prescribed in statutory instruments.
I am not sure whether retrospective application is feasible. The issue with regard to the BCAR is that people are appointed at particular times to do jobs during the process. I do not know how any of this could be done retrospectively.
I do not agree the cost of compliance is €35,000. Perhaps people are incorporating all of the planning application fees, design fees and the preparation of all the drawings. The cost of appointing a signed certifier is approximately €2,000 or €2,500 and perhaps less if it is of scale. We do not feel the cost of complying with the BCAR is prohibitive in any way or adds significantly to the cost of building.
Deputy O'Dowd spoke about being cynical because of past experience, and the case to which he referred should not happen and there is no condoning this type of behaviour. This is the type of behaviour we want to root out of the overall system. We do not want this type of person involved in building. We want to ensure we have an effective statutory registration of builder scheme in place. Individuals who have undertaken work of this nature have no place in the industry and they should be deprived of the right to build again. We want a system with teeth, which will work for the betterment of the consumer and the industry. We want a registration of builder scheme up and running with full power and independence to deal with these issues. We want to ensure continued vigilance to ensure requirements are dealt with.
There is a skills shortage. We have undertaken a major study on this in recent months, which has identified a significant skills shortage. We need major recruitment of new apprentices and professionals in the industry because we will have an acute shortage of people for the construction industry in the coming years.
Ms Deirdre NÃ Fhloinn:
On whether builders should share part of the liability notwithstanding insurance, one of my first observations on this area when I first sat down to look at it four years ago was there is a disconnection of the risk between those who can control risk on site of residential construction and those who ultimately have to pay for it if they find there is a defect. If the defects policy will not pay out and the contractor is no longer available as a mark, such as if the contractor is insolvent, the home owner is left, and many home owners have been left having to pay for the repairs to their houses and apartment blocks. However, the only people entitled to be on site when a house is being built are the Building Control Authority inspectors or contractors.
If I commissioned the building of a commercial building I would have my own representative, who would be entitled to go on site, look at what is happening, point out where there are problems and tell the contractor to put it right. A consumer cannot do any of this. A consumer signs a contract and waits to be told it is time for snagging. Most consumers would not want this right and would not want to have to go to the expense of appointing their own representatives on site, but it illustrates the problem that there is very little incentive in terms of the actual risk carried.
We have spoken about enforcement by building control authorities, and that it seems to be at very low levels. People state they are not aware of any prosecutions. I have not found any information on prosecutions. When a major apartment defect came to light a few years ago, I was asked whether there should be personal liability. I extracted the section of the Act and said there is personal liability, exactly as Mr. Fitzpatrick has said, with the potential for fines and imprisonment. It is not just applicable to the company but also to directors and people involved in the management of the company. It is available, but we do not seem to have activated it. Perhaps it is a cultural thing. The right against the builder should not disappear because of the fact there is defects insurance. If somebody has signed a contract he or she should be able to rely on it. If someone happens to sell a house a month after buying it, the building contract which contains warranties with the builder for a period of 12 years should go with the house.
A point was made on home owners getting locked into who is responsible for the defects. This certainly is a feature of the small number of cases which have come before the courts. I mentioned that the Law Society's building agreement has an arbitration clause. There is very little case law from the Irish courts on the liability of builders under the contract because there is an arbitration agreement. These cases never got to the courts, but when they did there was a long list of defendants. The home owners had been involved in proceedings for years. There was a case before the Court of Appeal last year where the opinion on compliance had been given in 2000 and the case was still ongoing. This is impossible for everyone concerned, including the defendant engineer who was not in a position to defend the claim because the builder was in receivership.
We have spoken about whether losing one's livelihood is enough and about personal liability. With regard to the construction industry register, when I speak to people who have defects in their homes they are surprised there is not already a regulation system for builders, and this is part of the point about consumer education. Regulation for people who are responsible for the biggest investment we all make in our lives, and on whom we are totally dependent, is a given. Of course there should be regulation, but there is regulation of many professions and activities in Irish society and there are still defects and negligence by people who must complete annual reports stating they have fulfilled their continuous professional development, they have not had any misconduct proceedings against them and they have not been adjudicated a bankrupt. This will not remove the need for effective remedies.
A question was asked about what is meant by effective remedies and what dispute resolution looks like. I mentioned there is not even a helpline in Ireland on what to do when people discover a defect in their houses. I also mentioned New South Wales, where the office of fair trading has a dispute resolution and advocacy service, which can start quite informally and can involve various methods of dispute resolution including mediation. How exactly it would be designed would have to be looked at, but the key is that it would be fast, cost-effective and people would know where to turn when it happened.
With regard to what to do about buildings with legacy defects, I am afraid that in other jurisdictions state intervention has been required. In Ireland, unless someone comes within the pyrite resolution scheme, responsibility for legacy defects is left with the home owner. We could go the way of Canada and New Zealand, where compensation funds and various measures have been introduced. I do not know whether anything can be done. Dealing with legacy defects is essential. The Rebuilding Ireland plan has nothing in it about people who have legacy defects in their homes. It is all about delivering new homes, but we have a huge problem, obviously, with the homes we have.
Mr. Eamon O'Boyle:
With regard to the points raised by Deputy Ó Broin, the problem is that all of the parts of buildings with legacy issues are interdependent. We know there are quite a few in existence with difficulties, and this can only really be determined by inspection, which is very laborious and will take time. There is a time period required for it to be addressed. It is a binary issue, either we have it or we do not, and this needs to be done. The points made on the consequences of not doing it have been dealt with by other speakers.
It is worth noting that there is a facility under the Fire Services Act for fire authorities to serve orders on people to undertake fire safety risk assessments where there are suspicions. Knowledge of where these buildings are, for example, apartments, is a factor. The committee's focus has been on housing, but it is important to remember that people also stay in hotels, hospitals and other buildings.
Regarding what Ms Ní Fhloinn and I stated, the building control management system, which is a computer portal for uploading documents relating to BCAR, is helpful. It would be useful if we had national standards in that regard and possessed a databank of inspections, faults and solutions so as to provide us with a way of dealing with these matters nationally. Mr. O'Reilly mentioned a difficulty with fire-stopping contractors, where the standards are set by industry groups rather than some other system. It would be useful if national standards, competences and skills were set. It is easy to install firestopping when there are standard sizes. It becomes more difficult when there are non-standard sizes and awkward places to get to.
I cannot argue with the point on the independence or vigilance of the one-stop-shop. Such an idea is a good one.
The Chairman made a point about a lack of skills. In terms of engineering, one university runs a postgraduate programme on fire safety, one institute of technology runs a degree programme on fire engineering and a masters programme is available in the North. A number of universities in the UK also provide that programme. At technician level within the building industry, Mr. O'Reilly mentioned how firestopping would be viewed as semi-skilled work, albeit important within the overall envelope of the building. There are skill shortages, so there must be training systems if people are to be able to execute firestopping properly. It is the most critical item that is not installed properly. A new fire detection alarm system can be installed retrospectively if it is not working. One can have an addressable system as opposed to a zoned one, which is the older type. If one does not have fire-stopping around windows and cavities, though, one will not realise that until it is too late.
Ireland has a legacy issue with fire safety and buildings. Powers exist to deal with that and they should be executed.
Mr. Brian McKeon:
The insurance policy that our company is providing with each property is just like a car insurance policy. People phone the insurance company. They do not go near the warranty company or the builder. The company then carries out inspections, so that is another independent body carrying out inspections. No matter how many assigned certifiers one has, insurance companies insist on conducting their own inspections.
I thank our guests for their contributions, which I am sure will lead into a further debate, and for attending. This is the first of our meetings on this topic. The committee will meet with other relevant stakeholders next week to resume our considerations on the issue.