Area E - Construction Flashcards
What are implied warranties under building Act?
All residential building work is covered by implied warranties.
The warranties are:
Last for 10 years
Apply whether they’re in your contract or not - and your contract can’t contract out of.
Also apply to work done by subcontractors employed by the main contractor.
The implied warranties are:
all building work will be done properly, competently and according to the plans and specifications in your approved consent.
All the materials used will be suitable and unless stated in the contract, new
The building work will be consistent within the building Act and the building code
The building work will be carried out with reasonable care and skill, and completed within the time specified or a reasonable time if no time is specified.
The home will be suitable for occupation at the end of the work
12 month defect period:
As well as the implied warranties there is a 12 month defect repair period.
Summarise relevancy of the consumer guarantees act?
The cga applies to services provided by the building industry but not to buildings - they’re covered by the building Act through implied warranties.
You can expect : work done with reasonable skill and care, materials fit for purpose and done in a timely manner.
What is the CCC assessed against?
Assessment of compliance is made against the building consent not the building code.
Prevents later confusion due to inspectors alternate interpretation of code.
You can make CCC a prerequisite for practical completion
What happens at practical completion?
Contractor notifies the arch they believe they have reached PC and issues schedule E1.
Arch inspects within 5 days - if agrees, issues defects list with PC certificate schedule E2
PC triggers:
Transfer of insurance if contractor effected
Release of retentions (40% SCC) and release of bonds
Clock begins on warranties, implied warranties etc
Clock begins on the defects liability period under SCC and under the building amendment act 2013.
Contractor is required to provide all information necessary for principal to obtain a CCC - as built records, test certificates, PS3’s, PS4’s
Contractor is to provide all maintanence and operation information (under contract and the building amendment act 2013).
Consultants to issue remedial lists, PS4 certificates.
Territorial authority gives final inspection sign-off
What is the defects notification period under statute?
Building amendment act 2013 brought about changes for residential projects including the provision of a 12 month defect repair period. This remains, irrespective of the notification period outlined in the contract.
Act also stated written contract required for building work over $30k, and builder must provide maintenance and operation information at handover
What are the different options for disputes resolution?
Mediation - independent person helps parties reach an agreement. It is voluntary and can withdraw at any time.
Results in a contractually binding agreement.
Adjudication - similar to arbitration but is not necessarily final.
Arbitration - a confidential process where an independent person decides a dispute based on available evidence. The outcome is enforceable, and binding. CCA uses adjudication but arbitration can overturn this.
The act effects both the AAS and the construction contract.
What are the licensing classes of the LBP scheme?
A - All BB - brick and block laying C - Carpentry D - Design EP - external plastering F - Foundations R - Roofing S - site
Design 1 = single household and less than 12 risk score
Design 2 = SH and greater than 12 risk or not SH and under 10m height
Design 3 = not SH and greater than 10m
What is considered in the risk matrix calculations?
Wind zone Number of storeys Eaves width Roof/wall intersections Envelope complexity Deck design
What benefit could there be for your client to purchase a master builders guarantee?
If the main contractor goes out of business you cannot claim against them directly for faulty work. Having a master builders guarantee would cover you.
How do you assess an EOT claim?
Check contract conditions amd terms.
Has the claim been submitted in an allowable time frame?
Is the basis of the claim allowable under the contract?
Is sufficient evidence provided to substantiate the claim?
Assess if the claim is fair and reasonable - if yes, grant the EOT to alter the PC date.
Can ask to mitigate the effects after claim granted by agreeing to additional payment for more resources etc.
What are separable portions?
A separable portion is a discrete part of the site that has a different access date and/or date for practical completion to other parts of the site. This is to allow the principal to maximise its use of the site before and after construction.
If the contract price is apportioned correctly in the contract retentions and liquidated damages can be calculated on a specific portion and can be effected at PC.
Needs to be defined at tender.
What happens at the end of the Defects Notification Period?
- Final Completion Certificate is issued.
- Remaining retention monies released
- Remaining bond released
- Month for contractor to submit final payment claim
Final Payment Claim served to Engineer - 35days to issue Final Payment Schedule - 45days for Principal to pay Contractor.
Process mirrors general payment claims but longer periods allowed for final claim assessment and settlement.
How would you assess fluctuations under the contract?
Contractor submits a statement of fluctuations - check they have provided the ‘basic costs’ outlined and that those items qualify under the contract (usually exclusions - limited to certain trades)
Must include in statement, materials affected and the dates of purchase, dates fluctuations occurred and prices on them, statement that materials were used in the contract works.
Add percentages of overheads described in C1.
Verification by an independent QS (I.e. not in house at contractor) unless architect otherwise agrees
Statement of fluctuations Made within 3 months of the date of the submission of the payment claim.
Contractor pays for QS verification by adding 10% to the fluctuations amount.
Sub contractor gets 5% for admin
What are Off-site materials?
Off-site materials - items stored off-site, but procured early and awaiting delivery to site.
- Payments for off-site materials as specified in specific conditions of contract. ‘Advances’ either allowable or not.
- If payments are allowable for off-site materials, Architect, Engineer or QS should inspect the Materials to verify they are: Separated, identified, labelled (I.e property of NAL) , secure and of the quantity claimed.
- Insurance: Covered by Construction Insurance (held by Principal or Contractor). Or evidence presented by contractor that the Materials are insured in the name of the Principal for their full value.
What are Principal Supplied Items?
Items supplied by the Principal i.e. Appliances, tiles, pendant lights.
Principal must ensure the procurement, delivery, storage and receipt (i.e check they are good) of the items.
Benefit to principal is that they don’t have to pay for the Contractors P&G and Margins, and may get the items at a discounted price.
