Victorian Building Authority’s Post

Is the profit worth the headache? When builders are pricing jobs, they work out a level of profit margin they are willing to accept. As an example, if a builder signs a 10 million contract, they may have a margin of 10% I.e. 1 million. The 1 million profit margin doesn't mean 1 million going straight into the shareholders pocket. They still have overheads to pay as well. So they are probably walking away at say 500k. However, half of that is held under the DLP period which is typically 1-2 years. So in essence, a builder takes on unlimited liability for 250k worth of potential profit at the end of the job. The builder will be left to fight the developer for the other 250k of profit. In addition, builders in NSW are exposed to 10 years duty of care under the DBP Act. Builders should be really doing these calculations prior to entering the contract to ensure the potential risk is worth the reward.

There are a lot of changes proposed for builders in Victoria over the next couple of years. These include a new regulator, a new domestic building insurance scheme and hopefully new contract laws as well. It is likely that eventually changes to the builder registration system will be proposed and made as well. I have heard that there is some confusion about the introduction of the new Building and Plumbing Commission next year and the impact on the process of obtaining builder registration. My understanding is that the date the new regulator commences is not yet certain as legislation needs to pass the Parliament. And while there are ideas to improve registration and licensing there have been no major announcements. So as things stand it seems likely that the task of registering builders currently done by the VBA will not change signficantly when the new regulator commences operations. Change is likely but at a different time. There is certainly no need to rush an application to be a registered builder so it is done before the new regulator is established. That is a process that should be done carefully and not accelerated unnecessarily.

Repeat surveys, new reports, maintenance delays, inflated insurance premiums; just some knock-on impacts of incomplete building information 📂 Whether it's been neglected in a handover, buried deep in a Sharepoint folder or just lost among stakeholders, the financial implications of simply 'not having that file' can be enormous 😟 Read our blog to find out how much these could really be costing you, and how Building Passport can help! 🏢 🎉 https://lnkd.in/ePpwpUT9

🚨 Attention Adjusters! Are you still relying solely on city or state sources to track building code changes? If so, you might be missing out on critical updates that can impact your claims! 🏢 The International Code Council (ICC) updates the International Residential Code (IRC) every three years, but state and local governments don't always keep up. This leads to a patchwork of different IRC editions in use across the U.S. 📅 🔍 Relying on outdated information could mean overpaying or underpaying property claims, which affects your bottom line. Avoid the guesswork and ensure accuracy with OneClickCode! 💡 With OneClickCode, you can access the most up-to-date building codes for any jurisdiction, saving time and money on roof claims adjustments. Get in the know today! ✅ #BuildingCodes #InsuranceAdjusters #OneClickCode #ClaimsAccuracy #IRCUpdates

Today's topic: building code upgrade coverage. A federal district court outside of Pennsylvania on Wednesday ruled that an insurer was obligated to replace all of an insured's roof tiles, even though only some of those tiles were damaged by hail. Those tiles that were not physically damaged by hail, however, never met the standard required by code for use on the roof. I suspect that if the policy at issue had an exclusion for building code upgrades, the outcome would have been different.

Another fun video as a follow up on the previous 2. Here I discuss in brief a couple of claims examples highlighting the importance of builders having an effective process to collect the insurances of their subcontractors. Make sure they are current, adequate and suited to the scope of works in their subcontractor agreements. To discuss further, reach out through our website: www.silverbackinsurance.au #BuildersInsurance #ConstructionInsurance #ContractorInsurance #TradesmanInsurance #BuildingInsurance #InsuranceForBuilders #ConstructionSafety #silverbackinsurance

PAS 9980:2022 appears to have been introduced as non-statutory guidance following Grenfell to help scope the remediation of external walls with combustible materials. It is based upon the premise of a cost-effective reduction in risk to a tolerable level, in line with the Regulatory Reform (Fire Safety) Order 2005. No consideration appears to have been given to the legal duty under the Defective Premises Act 1972, which sets a higher standard of remediation.   The judgement in Vainker v Marbank sets this as “the cost of making the dwelling fit for habitation in the way it would have been had the services been supplied in a professional manner” (paragraphs 333-339).   There is no limitation of cost or practicality under the DPA, and section 6.3 goes as far as to say “any term of an agreement which purports to exclude or restrict, or has the effect of excluding or restricting, the operation of any of the provisions of this Act, or any liability arising by virtue of any such provision, shall be void.”     If the remedial works are required because the property failed to meet building regulations at the time of construction, then anyone designing remedial works to the lower standard allowed by PAS 9980 risks being sued for negligence if the homeowner later sues the developer under the Defective Premises Act (and the 30-year retrospective application has now been tested and held). The developer can then sue the remedial design team.   RICS, the BSI and any home warranty insurers may wish to give serious consideration as to how defensible PAS9980:2022 might be.   PAS 9980:2022 https://lnkd.in/ejKbkUFZ   Vainker v Marbank https://lnkd.in/eXuKmXVT   Defective Premises Act 1972 https://lnkd.in/e_Z6Aefb   Regulatory Reform (Fire Safety) Order 2005 https://lnkd.in/eMtb7F5P   Fire Safety Act 2021 https://lnkd.in/eVCwqh8P     RICS guidance on PAS9980:2022 and resulting FRAEW https://lnkd.in/etp5pKXw https://lnkd.in/eCdSZWXU https://lnkd.in/eBW6YD6r

I wish more Builders and Developers would understand the point that Liam Gilhooly is making here. Remediating properties correctly to the standards/guidance set out in PAS 9980 may mean that they fulfill their obligations under the MHCLG Pedge, and create Low risk, or Medium ‘Tolerable’ risk buildings that will keep residents safe. However, it does not gurantee that the building/development would not fall foul of the Defective Premises Act. Whilst there is a huge amount of overlap between the intent behind the PAS 9880 and the Regulation within the DPA, there is not sufficiently overlap to guarantee that remediating to the PAS would remove any potential for a successful prosecution under the DPA. Whereas fulfilling the functional Requirements of the Building Regulations would remove any potential for prosecution under the DPA (noting that the Building Regulations and the DPA do not just consider fire safety).

Material costs in roofing projects can spiral out of control if not tracked accurately. Learn how to manage them with these expert tips from 911 Bookkeepers! 🛠️💰 #RoofingBusiness #MaterialCosts #911Bookkeepers #CostTracking

Understanding when an Owners Corporation should allow a builder to rectify defects versus proceeding with repairs and recovering the costs is a critical consideration in defect claims. The case highlights key factors that influence whether an Owners Corporation's actions in refusing a builder's involvement are considered reasonable, including the builder’s history of repairs, responsiveness, and the Owners Corporation’s confidence in their ability to deliver effective solutions. Author Fabienne Loncar discusses in this Owners Corporation Directions. https://lnkd.in/eadx3eXN #morayagnew