The recommendations of the Collins inquiry into Construction Industry Insolvency, will affect ACT builders operating in NSW and may have flow-on consequences for ACT projects.

The NSW Government is yet to announce any decisions on the inquiry’s recommendations. The Collins report will be open for public consultation until 21 February.

NSW Minister for Finance and Services Greg Pearce said, “We now need to carefully work through the reforms in consultation with those stakeholders and the public,” Mr Pearce said.

The Inquiry recommended construction trusts become mandatory for all projects valued at $1 million or more.

The reform is one of 44 recommended by Bruce Collins, QC, who led a three-month probe into the building and construction industry after a series of high-profile construction firm collapses including Reed Construction, Kell & Rigby, St Hilliers Construction, Baseline Constructions and Nahas Construction, left suppliers and sub-contractors out of pocket to the tune of an estimated $1 billion.

Mr Collins also called for the creation of a single statutory body, the NSW Building and Construction Authority.

Other recommendations included in the report include the establishment of a licensing system for all commercial builders and contractors that would limit participation to projects that could demonstrate financial backing and licensed accreditation, as well as a strengthened security of payments scheme.

The Inquiry’s Final Report described the essential elements of a statutory construction trust as: “Whenever a payment is made by an principal or by a head contractor or subcontractor which includes payment in respect of work and materials carried out and supplied by subcontractors, sub

subcontractors or suppliers, then the head contractor, subcontractor or sub subcontractor as the case may be, will from the moment of receipt of those moneys hold them as trust moneys on behalf of the subcontractors or sub subcontractors or suppliers as the case may be, for the sole purpose of payment of moneys due and payable to such subcontractors, sub subcontractors or suppliers.”

It says that “Any payment by a principal to a head contractor or by a head contractor to a subcontractor on account of, or in respect of, any work done or materials supplied by the head contractor, any subcontractor, sub-subcontractor or supplier” shall be made and treated in the following way:

• any cheque drawn upon a bank account in favour of the head contractor in respect of such work shall be held on trust for the head contractor, subcontractor, sub-subcontractor and supplier; and

• the proceeds of any such cheques when banked will be held upon the same trust for the head contractor, subcontractor, sub subcontractor and supplier;

• where moneys are paid by electronic transfer they will be deemed to be held in trust by the head contractor the instant they are received by electronic transfer from the principal.

It says the statutory construction trust requirement should apply to all building projects valued at $1,000,000 or more.

Construction trusts recommended in NSWA NSW Government inquiry has recommended that all payments on construction projects of more than $1 million be held in special trust funds to ensure payment of sub-contractors.

http://www.mba.org.au/files/view/?id=594

EDITIO

N 1-2013

Master Builders Association of the ACT1 Iron Knob St, Fyshwick ACT 2609PO Box 1211, Fyshwick ACT 2609

Tel: (02) 6247 2099Fax: (02) 6249 8374

Email: canberra@mba.org.auWeb: www.mba.org.au

MASTER BUILDERS EXECUTIVE COUNCILPresident – Simon Butt Treasurer – Frank Porreca Chair, Commercial Builders’ Sector Council – Valdis Luks Chair, Suppliers and Subcontractors’ Sector Council – Grace Ferreira Chair, Residential Builders’ Sector Council – Frank Porreca Chair, Civil Contractors’ Sector Council – Andy Crompton Chair, Professional Consultants’ Sector Council – Hans Sommer

MASTER BUILDERS MANAGEMENT TEAMExecutive Director – John MillerDeputy Executive Director – Jerry HowardDirector Industrial Relations

Conditions are now ripe for a consumer onslaught the likes of nothing previously witnessed. Let’s not just worry about poorly thought out consumer legislation that has tipped the scales so far in favour of the mischievous. Nor should we be singularly concerned by the advent of glib marketing that promotes products that are cheap but purport to fix everything. We shouldn’t even worry about the amount of on-line information available that arms everyone to be an “expert” on all things at all times.

These things are being given incredibly stupid credence by an ill-defined system that allows building licenses to be obtained at will. When you get a system that allows people in with sometimes the most basic of basics, it’s no wonder that consumers will be pillaged and plundered and the legal world will have a field day. How can it be that you can be a labourer, a baker or candlestick maker one day and a licensed builder the next? That’s it folks, just jump on-line and you will find any number of places you can sign up and become a licensed builder in just a few short months. Terrific! Don’t worry about pre-requisites – there’s a fast-fix system for dealing with that too.

When are we going to learn? We know all the old maxims – “If it’s too good to be true – it is” along with “You get what you pay for” as well as “Nothing beats experience”. Yet here we have a system that is becoming

so flawed many of the older and wiser heads are left dismayed at this new aged short-sightedness. The building and construction industry, significantly in the residential sector, but with more creep into other areas, is being set up to fail. Why is this being allowed to happen and where is the political leadership coming from to stop the onslaught? At some stage somebody has just go to say no more.

There has been so much discussion in recent times about input costs versus remedial costs. This debate is not just confined to the building and construction industry. It is a battlefield in other areas, most notably the education system itself. Education experts have recently slammed their own systems for having to spend so much money back-ending the lack of upfront effort. It’s a joke and diabolical that we continue to take short cuts often for the sake of political expediency. It’s more about the numbers and perception than the substance.

It’s no longer good enough that we export today’s expediency to tomorrow’s society. At some point (right now) this system needs to be fixed and for a myriad of reasons. For a start, experienced and quality practitioners are constantly being caught up as the broader reputation of the industry is tarnished through generalization. We are sucking trust and belief from society and the costs, physical

and mental, are immeasurable. Worse still, foreign competition is being promoted where so many advances are being made in what can be delivered in a box- and that includes houses.

This shouldn’t be seen as a lost cause. It should be about seizing a wrong and making it right and putting to the sword a lamentable period where short-termism had its day and has proved to be a monumental failure. But unless that time is now, consumers and builders, more specifically the well qualified and knowledgeable ones, are just going to get hammered.

HAMMERTHE

hits the nail on the head

IF IT'S TOO GOOD TO BE TRUE....

Late last year, the Minister agreed to accompany representatives from the Master Builders Association on an inspection of the impacts of DV306 at Molonglo. This site visit with the Minister was followed by a further visit with the Standing Committee on Planning, Public Works and Territory and Municipal Services. This was an excellent opportunity for us to show some real live examples and the potentially poor outcomes that were being delivered and the fact that these consequences would be exacerbated on blocks of land with more sloping topography. It would appear that the Minister has taken our concerns onboard and this is evidenced by the changes that are now being made to the solar envelope, which was one of our main points of contention.

On advice from the Minister, the Single Dwelling Housing Development Code (SDHDC) and Multi-Unit Housing Development Code (MUHDC) are proposed to be changed to the below. These proposed changes have been modelled and tested by some of our design professionals). Unfortunately the general consensus is that the proposed changes to the solar envelope are not totally addressing all of our concerns and we will be making represntations to the Minister expressing our concerns.

Proposed Changes with reference to the codes.

1. In the rules relating to the solar envelope change:

Buildings are sited wholly within the building envelope formed by projecting planes over the subject block comprising lines projected at X° to the horizontal from an infinite number of points on a line of infinite length 1.8m above the northern boundary or boundaries of an adjoining residential block.

This rule does not apply to any part of a northern boundary to an adjoining residential block that is used primarily to provide access to the main part of the residential block (ie a “battleaxe” handle). The previous rule applies to this boundary.

X° is the apparent sun angle at noon on the winter solstice. For the purposes of this rule values for X are given in table 1.

to

Buildings are sited wholly within the building envelope formed by projecting planes over the subject block comprising lines projected at X° to the horizontal from an infinite number of points on a line of infinite length at the height of the solar fence on the northern boundary or boundaries of an adjoining residential block.

This rule does not apply to any part of a northern boundary to an adjoining residential block that is used primarily to provide access to the main part of the residential block (ie a “battleaxe” handle). The previous rule applies to this boundary.

The height of the solar fence is given in table 1A.

X° is the apparent sun angle at noon on the winter solstice. For the purposes of this rule values for X are given in table 1B (in the code).

2. Insert new table 1A (below) above the current Table 1 in the code.

Location

from: i) a point on the boundary at a distance from the front boundary equivalent to the minimum front boundary setback applying to that block to:

ii) a point on the boundary 10m from point i)

2.4

all other parts of the boundary

1.8

Table 1A – Height of solar fence

Figure 1

Below is an example of the existing solar envelope and the proposed solar envelope as modelled by one of our design professionals.

MASTER BUILDERS SECURES A MINOR VICTORY ON DV306

Jerry Howard - Deputy Executive Director

Members would have been aware, from previous editorials, that we have been constantly lobbying the Minister for Environment & Sustainable Development, Simon Corbell MLA, and ACTPLA regarding DV306 and the negative implications that this may have for the industry and, indeed, the delivery of quality building outcomes on the ground. There are still a large number of issues to be resolved regarding DV306 and the proposed change below is a miniscule concession.

Existing envelope at 45 deg. in red

Proposed envelope at 32 deg. in blue

2,400

The current CFMEU ‘pattern agreement’ (‘EBA’) contains a so-called ‘job-security’ clause. There is some confusion within the industry about the impact of these provisions and the obligations they place on employers. Consideration of a typical clause is provided below.

Typical job-security clause

A typical clause requires employers to:

a) consult prior to the engagement of contractors and labour hire workers; and

b) ensure that any contractors or labour hire workers receive pay and conditions parity with the employees covered by the EBA.

Background This type of clause has the potential to significantly restrict the flexibility of an employer. It is controversial because it affects the terms and conditions of entities that are not party to the EBA. The inclusion of such provisions in a bargaining claim by the Transport Workers Union (and others) was central to its very public clash with Qantas.1 Under the Workplace Relations Act 1996 (Cth) and the 2006 version of the Implementation Guidelines for the National Code of Practice for the Construction Industry (‘the Code’), such terms would have been unlawful. However, under the Fair Work Act 2009 (Cth) (‘Fair Work Act’), it is now lawful to include provisions such as these.

In general, an enterprise agreement may only contain terms that are about ‘permitted matters’, i.e. that pertain to the 'employment relationship' between the employer and employees that are covered by the EBA (Fair Work Act, section 172). It has been argued by Master Builders and other employer associations that provisions such as this do not pertain to the employment relationship, but rather to a contractual relationship with non-parties to an enterprise agreement.

However, when drafting the Fair Work Act, the Government made it clear that provisions like this did pertain to the employment relationship between an employer and its employees, on the basis that it secured the employees' jobs against the threat of cheap contract labour. Accordingly, FWA has repeatedly held that provision is lawful. 2

Of course, it is clear that the use of contract labour in the construction industry usually does not threaten the job security of employees, as contract labour is used to meet specialist or temporary labour demands which an employer cannot satisfy with its permanent workforce. However, FWA will assume that job security could affect the job security of employees, and rarely (if ever) focuses on the special nature of the construction industry and its legitimate need for contract labour.

In theory, such clauses can only require that subcontractors be provided with pay and conditions parity where they do the same or similar work to that of the employer’s employees, as only then can the their jobs be under threat. In other words, subcontractor clauses will not apply to all of an employer’s subcontractors, only to those who perform work that could have been performed by the employers’ employees. 3

Note that enterprise agreements that have been approved by FWA are now automatically deemed to be Code compliant (under a ministerial direction for the August 2009 Guidelines and as per dot point 3 of clause 7.1.1 of the May 2012 Guidelines). This means that job security clauses in approved enterprise agreements will not breach the Code, even though on its face the Code 'prohibits any party requiring or attempting to unduly influence (either through the tendering process or otherwise) subcontractors or suppliers to have particular workplace arrangements in place' (see clause 6.2.1 of the May 2012 Guidelines).

Accordingly, the CFMEU can lawfully bargain to have this type of clause included in the EBA. The CFMEU has indicated that it is non-negotiable, however Master Builders would encourage members not to sign an agreement containing a job security clause, particularly where their enterprise relies on labour-hire.

‘JOB SECURITY’ clauses in pattern agreements

1 Interestingly, Fair Work Australia recently rejected the inclusion of a job security clause in the Qantas/TWU agreement when it arbitrated the matter, finding that ‘it is not appropriate for this Workplace Determination to directly or indirectly govern the terms and conditions of employment of employees not covered by it’ (i.e. such as subcontractors) as this would have ‘a negative impact on efficiency and productivity’. The Full Bench also held that ‘to interfere with management decisions [on use of labour hire and contractors]... would require clear and strong evidence of unfairness. No such case has been established with respect to current employees or otherwise’ (Transport Workers' Union of Australia v Qantas Airways Limited; Q Catering Limited [2012] FWAFB 6612).

2 Asurco Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union[2010] FWAFB 6180; AIG v ADJ Contracting Pty Ltd [2011] FWAFB 6684; Australian Industry Group v Fair Work Australia FCAFC [2012] 108.

3 See Construction, Forestry, Mining and Energy Union v Brookfield Multiplex Australasia Pty Ltd [2012] FWA 4051, in which a subcontractor clause linked to award classifications (without regard to the composition of the employer’s workforce) was considered by FWA to be beyond the employment relationship and therefore not permitted to be included in an EBA. However, in the contradictory decision of Construction, Forestry, Mining and Energy Union v Lend Lease Project Management and Construction (Australia)

Pty Limited [2012] FWA 5112, FWA held that such a clause could be included in an EBA on a ‘just in case’ basis, i.e. to accommodate possible expansions of an employer’s workforce into new areas. Nevertheless, while a subcontractor clause linked to award classifications may be permissible in an EBA, it will only be enforceable against subcontractors if there is some evidence that the employer actually employed or was planning to employ persons to do the work that the subcontractors would perform.

Mike Baldwin - IR Director / John Nikolić – Senior IR Advisor

Footnotes

The forecaster says that while the rest of the country can expect a recovery in housing construction this year, the ACT should expect the opposite.

Deloitte Access Economics’ quarterly Business Outlook and its separate Investment Monitor also say that no major new construction projects have been reported in the ACT in recent months, with Canberra Airport redevelopment and the Cotter Dam expansion the major on-going engineering projects.

While the ACT is facing a slow-down, the prospects are actually better than was the case three and six months earlier because the US has avoided the ‘fiscal cliff’ and thanks also to the Reserve Bank’s rate cuts.

“Lower interest rates have freed up the spending by Canberra’s mortgage belt leaving consumer spending, including retail, looking healthier than most other jurisdictions,” it says.

The slowdown in the ACT public sector has not been as bad as might have been expected with ACT public sector wages growth (5 per cent) barely below that of the mining sector ((5.2 per cent). “In other words, to date Federal cuts have had a relatively modest impact on Canberra’s economy (though job vacancies peaked in the first half of 2010 and have been sliding ever since, while employment levels have been stagnant for some months now).”

However Deloitte warns “there’s still a slowdown in the offing”. While the ‘fiscal cliff’ resolution and lower rates will help the ACT the tougher public service efficiency dividend will impact on the ACT.

And the downturn in the ACT housing sector is deepening, the forecaster warns.

“Having peaked in early 2012, the housing construction sector is already pulling back pretty sharply.” Building approvals have dropped and rental vacancy rates are rising, only partly offset by the positive impact of lower rates.

“However, and unlike the rest of Australia (which can look forward to a recovery in housing construction activity), the ACT can expect the opposite,” Deloitte says. “”This sector is shrinking in size, and its got further to go.”

One positive factor which will help the housing sector but wont completely prevent a slowing is the recent pick up in ACT population growth, which the forecaster expects to continue.

The ACT engineering and commercial construction sector also faces a pretty difficult outlook Deloitte believes, with no new recent projects. This leaves the Canberra Airport redevelopment and the troubled Cotter dam the major ongoing engineering projects, together with Majura Parkway between the Federal and Monaro highways, John Gorton Drive extension and the Constitution Avenue upgrade. Projects under consideration but without commitments are a $141 million solar power station and further upgrades to Manuka Oval including increased capacity, a hotel and extra parking.

Deloitte describes ongoing commercial construction as “solid”: continued work on the ASIO headquarters, the $130 million expansion of Belconnen Markets, $90 million for refurbishments at ADFA and a possible $68 million on works at the National Arboretum to be finalised in early 2013 for Canberra’s centenary celebrations.

Economic forecaster Deloitte Access Economics says a slow-down in housing construction in the ACT in 2013 will be a major factor in slowing the ACT economy.

Forecaster gloomy on ACT construction outlook.

SAFETY ALERT BEWARE OF TRENCH COLLAPSEA recent court finding into a trench collapse in Victoria is a timely reminder of the dangers for workers.

In this article, we remind members that having safe systems of work in place when working in trenches is paramount.

Two companies were each fined $30,000 for failing to provide a safe working environment for workers on a major sewage pipeline project in Templestowe, Victoria. A worker was injured when a trench collapsed, burying him up to his neck and causing a broken collarbone, collapsed lung, four broken ribs and clotting in his lung.

Master Builders ACT advises members of the dangers of working in trenches without the essential safety controls. There are specific regulations in relation to working safely in trenches and they must be followed at all times.

Safe Work Australia has released a Code of Practice for excavation work which you can download at the website address to the right.

SAFETY WARNING WORKER SAFETY IN HOT WEATHER

With temperatures predicted to be in the mid 40s in some parts of the country throughout summer, WorkCover NSW is warning workers to take precautions.

Ways to reduce risk of heat illness on hot days

• Try to reschedule work to cooler times of the day (eg. early mornings or late afternoons)

• Ensure there is plenty of access to plain drinking water (at least 200 mL every 15 to 20 minutes)

• Ensure there are shaded rest areas and provide regular rest breaks.

• Be aware of symptoms of heat illness, such as nausea, dizziness, general weakness and collapse. If any workers display these symptoms, obtain immediate medical assistance.

www.safeworkaustralia.gov.au/sites/swa/about/publications/pages/excavation-work

With hot weather conditions prevailing in the country over summer, WorkCover NSW has issued a fact sheet on the risks of working in high temperatures. Here we offer Members a list of ways to prevent heat illness and ensure worker safety during hot weather.

http://www.workcover.nsw.gov.au/formspublications/publications/Pages/Workinginheat.aspx

Workcover Fact sheet

Image courtesy of QLD Health

Kickstart The Gillard Government's Kickstart program will help support up to 21,000 apprentices in the construction industry by the end of February 2013. The program triples the incentive paid in the first year to small and medium business owners who take on a new apprentice.

Head coach of the Greater Western Sydney Giants and former plumber, Kevin Sheedy, said the $57.5 million Apprentice Kickstart program would have helped create extra opportunities when he was a tradesman.

"If you want to be an apprentice in the construction industry why don't you take this as an opportunity to talk to employers in your local area," Mr Sheedy said.

'Taking on an apprentice or a trainee allows you to train your future workforce to your standards, how you want the job done. And that's got to be good for business."

Chief Executive Officer of the Master Builders Australia, Wilhelm Harnisch, said the measure came at a good time with the end of the school year.

"This initiative will help give jobs to a new generation of building workers and shows that the government puts a high value on the building and construction sector," Mr Harnish said.

Minister for Skills, Senator Chris Evans, said there were 500 applications from potential apprentices within the first two weeks of the program opening.

"Kickstart is part of a long-term plan to ensure Australia has the skilled workers it needs, ahead of the predicted upturn in the housing industry in 2014 and 2015," Senator Evans said.

"We're making sure the next generation of plumbers, electricians, carpenters and other tradespeople are in training now, so we're ahead of the game.

"We are delivering the right skills, in the right areas, at the right time."

The Kickstart initiative builds on the success of the Kickstart Bonus and the Kickstart Extension programs where $120 million was invested to support more than 50,000 trade commencements during the recovery from the Global Financial Crisis.

Gerard Allen - Some thoughts from a former MBA Group Training apprentice.

This incentive will encourage those smaller employers who may be apprehensive about taking on new apprentices to take the leap.

I really enjoyed my apprenticeship, it was hard at times but I am glad I stuck with it. Now as a fully qualified Plumber I am enjoying the benefits of working in the building industry and looking forward to starting my own company in the near future.

The Kickstart scheme would be a great way to ease the initial financial pressure of taking on a 1st year apprentice.

My apprenticeship has taken me to places I never dreamed. After winning the World skills Australia competition I travelled to the UK and was able to work in another country in areas of plumbing that I would have never considered before and obtained a new knowledge base of ideas, techniques and practices that will be valuable to me in my future endeavours.

For more information:

www.australianapprenticeships.gov.au

Aussie Rules icon gives Kickstart program

a big thumbs up!

Aussie Rules icon Kevin Sheedy has joined Master Builders Australia to encourage employers to sign up to a new program to boost apprentices in the building and construction industry.

Gerard Allen at the WorldSkills competition

A brief summary of this case:

The builder was issued with a Rectification Order by the Construction Occupations Registrar requesting that he attend to remedial works associated with water ingress. The builder sought a review of the decision of the Construction Occupations Registrar on the basis that he was not responsible for the design and he had essentially constructed the works in accordance with the approved plans. Following the hearing, the Tribunal concluded that the Registrar was justified in issuing the Rectification Order. The owner, in this particular case, engaged the architect, the engineer and the building certifier, yet none of these were held responsible; for the design or the certification of plans that were obviously inadequate in detail and, if built as designed, would never have satisfied the performance requirements of the BCA.

The Tribunal’s conclusion is quite amusing – “The Tribunal has concluded that neither the architect, nor the structural engineer, nor the certifier engaged by (Name withheld), nor the applicant, considered that the underpinning on the western wall of the downstairs extension that retains

soil under the existing house would require anything more than this small surface drain and plastic sheeting to contain any moisture that may accumulate in the soil in order to meet the requirements of the BCA. Subsequent rainfall events showed that this assumption was not well founded.” But, ultimately, the builder was held liable and, in hindsight, should not have proceeded with the works knowing that, potentially, the work, if built, would not prevent water ingress.

BRICK VENEER GARAGE WALLS?

Well, if that is the question, then this may help you with the answer.

The deletion of the deem to satisfy requirements for unreinforced masonry from NCC Vol 2, Part 3.3.1.0 now leaves us with the dilemma that single-leaf unreinforced masonry walls must now be constructed in accordance with AS4773.1, Masonry for Small Buildings. The common practice for external garage walls has been to construct the walls in single skin 110mm thick with attached 230 x 110mm piers spaced, generally, at up to 1.5 centres for walls up to 2.4m high.

However, this is now no longer possible and by way of example, if the wall height is 2.4m high, compliance with AS4773 would now require the 230 x 110mm attached pier to be spaced at 840mm for our N2 wind classification.

The other option would be to construct the attached piers with tie-downs for the full height with N12 or M10 reinforcing bar tied to the footing and positively attached

to the top plate or garage beam, whichever the case may be. This will then allow you to space the attached piers at 4.2m centres, given the same scenarios as above.

When you analyse all of the above information, my recommendation is that you now construct the external garage walls using brick veneer construction. This has numerous advantages in that you can stand the roof trusses without having to temporary prop the garage beams and you can also make easy provision for the building in of your meter box, including the supply conduits. If your clients insist on an internal masonry wall, then the most sensible option may be to construct the wall in 230 brickwork or 270 cavity wall construction.

http://www.acat.act.gov.au/judgment/view/4831/title/co-ordinated-constructions-pty-ltd-

To brick veneer the external garage wall, or not to brick veneer – that is the question!

The Final decision

ACAT DECISION SOME SERIOUS RAMIFICATIONS FOR BUILDERS

Jerry Howard - Deputy Executive Director

What is a Lump Sum contract?

A Lump Sum contract is one whereby the builder is to complete the works for a lump sum. This is perhaps the most common of the three principle types of formal building contract used mainly in residential housing.

What are the different types of Lump Sum contract?

There are two kinds of Lump Sum contract; the first is the firm priced contract, which has no provision for variations in the price due to fluctuations in costs. This is the most common type currently in use. The second type does provide for variations and is commonly described as a contract which is subject to rise and fall. Lump Sum contracts may also be divided into contracts with bills of quantities.

What is a Cost Plus contract?

The Cost Plus contract, which is becoming more common in residential projects, is in two forms with the first being a commission contract, where the builder is entitled to be paid the cost of the works, plus a commission, which is an agreed percentage. This can be a percentage

of the total works or an agreed flat rate percentage. The common advice that I provide to builders when entering into Cost Plus arrangements, is that there should be an independent Cost Plan where the cost of the works has been pre-determined. The second form is where the builder is paid the cost plus a fixed fee. The use of a Cost Plus contract may be justifiable where pricing is extremely difficult and there is a lesser risk for the builder in using this form of contract.

What is the effect of the printed word over handwritten notes?

More and more of our members are now using electronic versions of Home Building Contracts, with less emphasis on completing the contract by handwritten notes or insertions or alterations. Generally, greater effect is given to handwritten words over printed words if there is a dispute, eg. the specifications may be a standard format and printed as an attachment to the contract, however, written words in the Special Conditions clause in the contract, may override the specifications and therefore take precedence.

BUILDING CONTRACTS. SOME COMMON QUESTIONS ANSWERED

BUILDER’S INITIALS _______________ OWNER/S INITIALS _______________ 29

A22 SPECIAL CONDITIONS

(Each Special Condition must be numbered and listed separately)

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Generally, greater effect is given to handwritten words over printed words if there

is a dispute, eg. the specif ications may be a standard format and printed as an

attachment to the contract, however, written words in the Specia l Conditions clause

in the contract, may override the specif ications and therefore take precedence.

Jerry Howard - Deputy Executive Director

I received lots of enquiries from members regarding my previous editorial on condensation and the effects of condensation, dampness and the consequences of mould growth as a result of the above. There has certainly been a lot of hype in the last decade regarding the affects of mould. But ……. the good news is that not all mould has the potential to affect the health of the occupants. There is, however, no doubt that the most critical element for mould growth, is moisture. Without moisture, mould cannot grow. While many moulds require direct contact with water, some moulds only require high humidity to grow and prefer to have indirect contact with a dry environment. So, problems such as leaking balconies, with moisture ingress into the cavities or the ceiling space, could create a perfect environment for mould growth. This is in addition to the condensation problems due to moisture-laden air and lack of poorly installed vapour barriers. The problems of course with concealed moisture problems, is that the mould can grow undetected.

As stated in my previous editorials, this appears to be a more recent phenomenon, probably attributed in the main to the fact that we add more insulation, we create airtight buildings, we locate laundries without access to external ventilation and we use clothes dryers extensively to dry our washing (especially in multi-unit developments, generating excessive amounts of moisture-laden air).

These problems are compounded in our Canberra winters where of course it is rather unpleasant to open a window when it is -6° outside.

So – what do we do to fix the problem?

There is certainly an education process for new occupiers. It is likely that they may have relocated from a residence with a very low energy efficiency performance and therefore may not be aware that their new unit will have totally different operational characteristics. Their occupational behaviour may also need some fine-tuning which could, potentially, minimise condensation, especially during our Canberra winters. A good start here would be an operational guide provided at handover time.

We need to acknowledge that, in multi-unit developments, there will

not be access to a facility whereby clothes can be air-dried. We also must acknowledge that owners in these types of developments may not have access to openable windows in the laundry areas and, indeed, will not be able to open

these windows, especially in winter. Therefore, if we cannot

introduce adequate natural ventilation and exhausting,

then the mechanical and ventilation

exhaust system must have the capacity to exhaust the moisture-laden air.

The problems above are mainly attributable to multi-unit type developments as generally exhaust

systems in standalone houses are used

to remove moist air typically from bathrooms,

kitchens and toilets, where there isn’t access to passive

ventilation. Mechanical systems in multi-unit developments are far more complex and are sometimes referred to as extract systems. Careful consideration must be given to the design of these systems by the mechanical engineer, otherwise occupants will continue voicing their dissatisfaction with the performance of the building’s mechanical system. If the building doesn’t have an integrated mechanical system then careful consideration must also be given to the method and the capacity of the exhaust system used in laundries, toilets, etc. which do not have passive ventilation.

Remember the old adage, input costs vs remedial costs. It’s a no-brainer and it’s far better to invest in upfront design rather than trying to remedy the problems later.

CONDENSATION AND MOULD FOLLOW-UP FROM PREVIOUS EDITORIALS

Jerry Howard - Deputy Executive Director

Remember the old adage, input costs vs remedial costs.

The Minister for Employment and Workplace Relations, the Hon. Bill Shorten, has released the building code which is due to take effect on Friday 1 February, 2013.

Acting Chief Executive of Master Builders Australia, Richard Calver, said the new building code is being hastily implemented

“Master Builders has been a long term advocate for a strong and effective national building code of practice. However, a major concern is the lack of consultation with the industry on the implementation of a major compliance code.

“It is simply too early to tell if there will be any unintended consequences as a result of its implementation. However, section six clearly sends a message that all State and Territory codes of practice cannot stipulate additional requirements.

We have essentially been given a mere 24 hours to examine the code and advise the industry how to comply.

“The intention to cut red tape by allowing building industry contractors and participants to demonstrate compliance is welcome.

“We also welcome provisions preventing industry participants, including trade unions, from applying undue pressure and coercion. Such provisions were successful tenets of the Australian Building and Construction Commission.

“Minister Shorten should consider consulting with industry to implement more of the underpinning laws for the Australian Building and Construction Commission, after it successfully curbed union militancy and lawlessness,” Mr Calver said.

Industry Blindsided by New Building CodeThe building and construction industry is concerned a new Building Code has been given statutory force without any consultation with industry.

The new requirements are based on a 2010 trial community consultation process for certain larger development proposals. Proponents of development applications for these proposals have had to complete an approved form containing a community consultation summary and include this as part of the development application.

In December 2011, legislation was passed to mandate the pre-DA community consultation process and allowed a 12 month implementation period before commencement. The new requirements are now in force.

What are the new requirements and what developments do they apply to?

All development proposals that meet one of the triggers below will need to complete pre-DA community consultation. Development proposals in an industrial area are exempt as are proposals in certain developing areas. You should check the maps in schedule 1B of the Planning and Development Regulation 2008 to see if your development proposal is in an area that is exempt.

Pre-DA community consultation triggers

Pre-DA community consultation must be conducted when a development proposal triggers one or more of the following:

• the proposal is for a building for residential use with 3 or more storeys and 15 or more dwellings

• the proposal is for a building with a gross floor area of more than 5000m²

• the proposal is for a building or structure more than 25m above finished ground level

• the proposal is for a variation of a lease to remove its concessional status.

Development proposals that meet any one of the triggers will need to undertake community consultation and complete a pre-DA lodgement community consultation form that provides details about the consultation. The proponent will determine the type of community consultation that they will complete.

A development application cannot be lodged if the development proposal meets one of the triggers and the application does not include the pre-DA lodgement community consultation form.

New pre-DA community consultation requirements for larger scale development proposals came into effect on 13 December 2012.

Pre-DA community consultation

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Dec-12Nov-12Oct-12Sep-12Aug-12Jul-12Jun-12May-12Apr-12Mar-12Feb-12Jan-12

The above graph and table below summarise private sector building activity for the various building sectors in the ACT over the past 12 months. The values for each month are depicted in millions of dollars.

ACT PRIVATE SECTOR BUILDING ACTIVITY

COMING EVENTS FOR 2013

Master Builders Annual Charity Golf Day

Date: Monday 25 February I Where: Yowani Country Club & Restaurant, Lyneham

This year's Golf Day will again consist of a round of golf with a full field of participants, a BBQ lunch and dinner at the Yowani Club Restaurant. Trophies will be presented during the dinner, followed by our guest entertainer, speed painter Brad Blaze who was recently named “Entertainer of the Year” at the prestigious Australian Event Awards.

MBA Group Training Apprentice & Cadet Awards

Date: Friday 22 March I Where: Ainslie Football Club, Ainslie

The evening is an opportunity for industry professionals and industry bodies to come together to support and recognise outstanding work by the current MBA Group Training apprentices and cadets.

TRAINING DATES FOR 2013

ASBESTOS AWARENESS TRAINING

Date: 27 March / 17 April (Contact Cecilee Miller at cmiller@mba.org.au to book your place) This is a nationally recognised course, approved by the ACT Government, to satisfy the regulatory requirements of the ACT Building Act, designed to meet the needs of tradespeople, services workers, builders, building certifiers and community members.

HEALTH & SAFETY REPRESENTATIVES TRAINING

Date: Beginning 3rd April (Contact Cecilee Miller at cmiller@mba.org.au to book your place) Master Builders has developed an extensive and practical program to train Health and Safety Representatives for the building industry in compliance with the Act. This course is approved by the ACT Work Health and Safety Commissioner.

SECTOR COUNCIL MEETINGS 2013

COMMERCIAL 19 FEB 16 APR 4 JUN 20 AUG 15 OCT

CIVIL 5 FEB 30 APR 30 JUL 19 NOV

RESIDENTIAL 6 FEB 20 MAR 1 MAY 12 JUN 24 JUL

SUB-CONTRACTORS & SUPPLIERS 26 FEB 30 APR 2 JUL 3 SEP 12 NOV

PROFESSIONAL 13 FEB 10 APR 12 JUN 14 AUG 11 DEC

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12Additions and Alterations (Residential) 0.82 1.00 2.00 5.5 5.8 5.2 6.3 5.3 8.2 5.8 7.02 5.00Commercial Building Work 8.19 51.5 19.02 14.3 39 80.2 83 17.1 27.5 51.27 34.0 38.2Garages, Pools, Decks and Similar Structures 9.02 7.05 0.64 1.7 9.0 10.2 9.5 15.0 13.8 15.8 18.3 13.8Multi Unit 13 16.5 1.8 0.13 34.5 33.1 5.5 0.5 1.8 14.6 0 11.2New Housing 1.8 11.4 3.7 40 53 49 67 17.2 40 56 72.3 47.42