Banning for builders

Press, 29 June 1981, Page 25

Banning for builders

PA Wellington Builders who leave finishing and contract maintenance work incomplete. will face banning by the Government body which protects new home owners.

The Building Performance Guarantee Corporation said in its annual report that there was a high proportion of claims with assessed liability of less than $5OO during the year. This meant that several builders left finishing and contract maintenance work incomplete, said the report, tabled in Parliament.

“In an attempt to discourage builders from this practice it has been decided that in all cases where a builder fails to respond to the corporation’s request to carry out remedial work on a valid claim an automatic ban on his work will be imposed."

Indemnities would not be issued on more houses for which the builder was responsible until the corporation was reimbursed for the costs incurred on previous claims.

The corporation noted that the total number of claims it received “is very small compared with the number of indemnities issued, indicated that the building industry provides a satisfactory service to the majority of its clients.”

Some problems between builders and clients had emerged, including—- • A lack of precise and detailed desigrt, contract plans and specifications.

• A lack of care and attention in administering contracts, particularly over the authorisation of variations.

Some parties involved in contracts did not fully appre-

ciate the importance of the contract or their responsibilities, the report said. Builders and solicitors had to take responsibility for “this present unsatisfactory situation."

The corporation provides owners of new homes with indemnities protecting them for up to six years against loss or damage arising out of failure by the builder to complete the work in accordance with the building contract, defects causes by poor workmanship or defects in materials.

The report said a new indemnity agreement had been completed, to ensure that indemnity holders had a clear statement of the corporation’s current claims policy. . The corporation was also looking at the possibility of establishing a builder approval system as an integral

part of the indemnity scheme.

28 claims were settled during the year, costing $46,477. The estimated liability for claims accepted but not finalised at March, 1981, was $75,000.

About half of the claims related to relatively minor defects; 60 per cent were for non-completion.

Of the 76 new claims received, plus those under action from the previous year, complete or partial liability was accepted in 43 cases; nine were rejected, 16 withdrawn, and 25 were still under investigation. One of the main reasons for declining claims was that they were for minor defects outside the 12-months period for which such items were covered.