BUILDING INDUSTRY REFORM

Recently, a number of troubling building failures have highlighted the need for construction industry reforms that will better protect the interests of the community, and in particular, the owners and occupiers of multiresidential buildings.

The Shergold Weir Report to the Building Ministers Forum, presented in February 2018, made 24 recommendations for reforms to the sector.

CONTROLS OVER ARCHITECTURAL SERVICES

In Australian jurisdictions, the Architects Acts and other regulations combine with educational and competency standards to ensure that registered architects are qualified – both to design and technically document buildings to a high standard, and to administer construction contracts ensuring that buildings are completed to meet design and technical documentation requirements, codes and regulations.

Current legislation, as well as a longestablished body of Common Law, defines clear boundaries for the responsibility and liability of architects in the provision of their services. It envisages a continuum of architectural services from design through to the completion of the building, providing professional accountability and consumer protection.

Such arrangements ensure strict control over every aspect of the building’s creation: the quality of the design, working documents, construction contracts, as well as the inspection and certification systems.

These safeguards present virtually no opportunity for those involved in constructing the building to deviate from the documented construction requirements, such as by substituting materials.

CURRENT BUILDING INDUSTRY PRACTICE

In contemporary apartment construction, the comprehensive level of responsibility expected is often addressed by dividing liabilities for each part of the process. It is now common practice, in apartment and other high-rise building projects, to have the design architect’s services terminated at the end of the concept design, and then to have another practitioner appointed to prepare the construction documents.

One aspect of this practice is that it has the potential to lead to confusion over who is responsible for the project as a whole. It is a fundamental principle of good public policy that those who make decisions about resource allocation should bear the costs and receive the benefits of those choices. Because many parties are making decisions about which materials and techniques to use, the costs and benefits of those decisions are diffused, and sub-optimal decisions are made – a classic case of market failure, as it provides attractive financial incentives for those involved in the construction process to substitute materials and construction techniques not originally specified.

Owners and occupiers also have to make resource-allocation decisions; owners have to decide how much they are prepared to spend, and occupiers have to decide where they are to live. In the case of cladding, owners and occupiers lack the knowledge to determine if a material may be inflammable, or properly attached to the building, and the removal of the independent professional architect or engineer from the process deprives them of expert advice and assistance.

INTERNATIONAL FINDINGS

International jurisdictions and authorities have recognised the dangers of the market failures identified previously, and have developed, to varying degrees, means for solving them.

1. The United States National Council of Architects Registration Boards (NCARB) discusses these issues in the publication Guidelines and Model Law/ Model Regulations. Guideline V11 states: “VII. Requiring that an architect be engaged during the construction of a project

A. An owner who proceeds to have constructed a project having as its principal purpose human occupancy or habitation and not exempted under Section VI shall be deemed to be engaged himself/herself in the practice of architecture unless he/she has employed an architect to perform at least minimum construction contract administration services, including (i) periodic site visits, (ii) shop drawing review, and

(iii) reporting to the owner and building official any violations of codes or substantial deviations from the contract documents which the architect observed. B. It shall be the project design architect’s obligation to report to the state board and to the building official if he/she is not engaged to provide construction contract administration services described in Paragraph A.”

2. In the United Kingdom, the Royal Institute of British Architects’ Statement on Design for Fire Safety, which was commissioned as a consequence of the Grenfell Tower disaster, identified the following concerns about the procurement regime for buildings in the UK: “Developments in building procurement approaches which mean that the Lead Designer (architect or engineer) is no longer responsible for oversight of the design and the specification of materials and products from inception to completion of the project, with design responsibility often transferred to the contractor and sub-contractors, and no single point of responsibility.”

“The virtual disappearance of the role of the clerk of works or site architect and the loss of independent oversight of construction and workmanship on behalf of the client.”

PROPOSED LEGISLATIVE REFORM

The market failures described earlier can only be overcome by statutory controls, requiring continuous accountability for design, technical documentation and inspection through the building process from inception to completion

– similar to the principle of “continuity of care” espoused by certain health professions.

Hence, it is suggested that the simplest and most effective way for Australian jurisdictions to address this market failure is to modify existing legislation; namely, to ensure that when a project involves the construction of Class 2, 3, 5 and 9 buildings, that an architect of account be appointed to provide a full design, technical working documentation and contract administration services.

The architect’s responsibilities should include (i) periodic site visits, (ii) shop drawing review, and (iii) reporting any violations of codes or substantial deviations from the contract documents to the owner and the relevant authority.

The proposed reform would not generate any discernible additional cost to the construction industry.

COST OF REFORM

The proposed reform would not generate any discernible additional cost to the construction industry. Design, technical working documentation, contract administration and inspection services are already inherent components of the cost of a building, and the financial benefits of avoiding construction accidents contribute to a compelling argument. It is probable that the cost of engaging a single, competitively appointed, professionally qualified provider would be less costly than contracting a series of disparate service providers.