PN 1.100-1.400 - CHATGPT Flashcards
1. What is the purpose of Practice Note PN 1.102U?
- Answer: To outline the procedures for dealing with complaints about members, specifically registered architects, by the New Zealand Institute of Architects and the New Zealand Registered Architects Board.
2. Under what circumstances can a complaint be made against a member of the New Zealand Institute of Architects (NZIA)?
- Answer: A complaint can be made if a member is believed to have engaged in practices detrimental to the interests of the Institute, gained membership by improper means, been convicted of a crime, declared bankrupt, become prohibited from being a company director, or willfully disregarded any rule or council order.
3. How should complaints about NZIA members be submitted, and what happens after submission?
- Answer: Complaints should be made in writing to the Executive Director. After submission, the Executive Director advises the member of the complaint, seeks the member’s comments, and forwards both the complaint and comments to the Council for consideration.
4. What are the possible disciplinary orders that the NZIA Council can impose if a complaint is found valid?
- Answer: The Council can order forfeiture of membership, admonishment or censure, or any other appropriate action.
5. How are resolutions passed in the NZIA Council regarding disciplinary matters?
- Answer: Resolutions shall be passed by a two-thirds majority of all Council members, and absent members may vote by proxy.
6. How can people make complaints about Registered Architects under the Registered Architects Act 2005?
- Answer: Complaints must be formal and in writing, and full complaints procedures are published on the NZRAB website.
7. What penalties can the New Zealand Registered Architects Board (NZRAB) impose if a complaint against a Registered Architect is upheld?
- Answer: The NZRAB can impose fines, require supervision or training, or suspend/cancel an Architect’s registration.
8. What are some of the standards of ethical conduct for Registered Architects outlined by the NZRAB?
- Answer: Standards include not misrepresenting oneself, upholding the law, exercising unbiased judgment, performing work with due care and diligence, and maintaining confidentiality of client affairs.
9. In a commercial dispute, where should architects and clients resort to for resolution, according to Practice Note PN 1.102U?
- Answer: Architects and clients should resort to the resolution procedures set out in the Agreement for Architects Services signed by the parties.
10. Does the NZIA provide a dispute resolution service for commercial disputes between a member and the member’s client?
- Answer: No, the NZIA does not provide a dispute resolution service for commercial disputes.
1. What is the purpose of Practice Note PN 1.201?
- Answer: To provide information on the liabilities of an architect in practice, professional indemnity insurance protection, and guidelines for managing practice risks.
2. What are the two ways in which the liability of an architect is measured?
- Answer: Time and quantum. Contractual liability is limited to 6 years after a breach of contract, and liability for negligence “in tort” is limited to 10 years under the Building Act 2004.
3. How can architects manage practice risks?
- Answer: By avoiding risks, transferring risks to others, managing risks that cannot be avoided or transferred, and protecting the practice through insurance support.
4. What are the four fundamental ways of managing risk, as mentioned in the practice note?
- Answer: a) Avoiding the risk, b) Transferring the risk to others, c) Managing risks that cannot be avoided or transferred, and d) Protecting the practice through insurance support.
5. What is the role of professional indemnity insurance in managing practice risks?
- Answer: It provides indemnity for claims against the architect for losses caused by negligence in the performance of professional services and helps protect the practice from liabilities.
6. What is the “claims made policy of insurance” regarding professional indemnity insurance?
- Answer: It means the policy must be in place when events that might give rise to a claim first become known to the insured.
7. How is the premium for professional indemnity insurance calculated?
- Answer: It is calculated as a factor of the practice’s gross fee income for the year, averaged over a two-year period, based on the previous year’s income and a projection of the next year’s income.
8. What are some ways architects can avoid common pitfalls related to practice risks?
- Answer: Clearly define services in written agreements with clients, be cautious when clients revise briefs to lower costs, ensure construction works are complete before issuing practical completion certificates, avoid giving advice on topics outside qualifications, and avoid agreements requiring indemnities.
9. How can architects reduce liability related to sub-consultants under professional indemnity insurance?
- Answer: Ensure sub-consultants have the same amount of professional indemnity insurance and are signed up on the same terms and conditions as the architect.
10. What is emphasized regarding written contracts in avoiding common pitfalls?
- Answer: Architects should have clear agreements with clients on the extent of services provided and the fees charged, and the lack of a written contract can result in an increased excess in the event of a claim.
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Flashcard Questions and Answers:
1. What is the Consumer Guarantees Act 1993?
- Answer: It is a legal framework in New Zealand that sets out guarantees applicable to the supply of goods and services by a supplier in trade.
2. When does the Act apply, according to the provided information?
- Answer: The Act applies to transactions entered into after 1 April 1994.
3. How are “consumer” and “service” defined in the context of the Act?
- Answer: A “consumer” is a person acquiring goods or services for personal, domestic, or household use. “Service” includes rights, benefits, privileges, or facilities provided by a supplier.
4. What guarantees are provided by the Act for services, and what do they entail?
- Answer: Guarantees include that the service will be carried out with reasonable care and skill, reasonably fit for its purpose, completed within a reasonable time, and charged for at no more than a reasonable fee.
5. Under what circumstances can a client take action if services fail to comply with guarantees?
- Answer: The client can require the architect to fix the problem within a reasonable time, have it fixed by someone else and recover costs, or cancel the contract and seek redress.
6. When is the architect not at fault and not liable, according to the information?
- Answer: The architect is not at fault if the problem is caused by a third party’s act, omission, or representation, or by a cause outside human control.
7. How can the architect and client “contract out” of the Act’s provisions, and under what conditions?
- Answer: They can “contract out” if the contract is in writing, and the client is purchasing architectural services for business use, such as a commercial property development.
8. What are the recommended actions for architects in relation to new projects?
- Answer: Clearly define client’s purposes and requirements, consider fee structures, determine completion time, and confirm if the client is engaging services for business purposes.
9. What emphasis is placed on records, as mentioned in the provided information?
- Answer: Architects are advised to keep all material defining client needs and the purpose for which services are engaged in the contract file.
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Flashcard Questions and Answers:
1. What is the purpose of Practice Note PN1.207 related to the Health & Safety in Employment Act?
- Answer: The purpose is to provide an update for architects based on discussions during the CPD Seminar and to reinforce key points from previous practice notes.
2. How many prosecutions had been brought against Employers and Principals, according to the information?
- Answer: By early that year, 445 prosecutions had been brought against Employers and 24 against Principals, with 16 charges laid against employees.
3. What has been emphasized as a key element in the findings of the Courts regarding health and safety issues?
- Answer: The need for all parties to be pro-active in managing health and safety issues, reinforcing the “strict liability” principle.
4. What expectations do some clients have regarding architects and health and safety issues on construction sites?
- Answer: Clients expect architects to address health and safety issues in designing, contract documentation, and during the construction phase.
5. What is recommended for architects in setting up building contracts and administering them in relation to health and safety?
- Answer: Architects, at a minimum, should call for a Safety Plan as part of pre-registration or tenders and address health and safety issues as an agenda item at each site meeting.
6. How does the law expect architects, as the client’s agent, to contribute to construction site health and safety?
- Answer: While not expected to be an expert, architects are expected to have noticed and taken action on obviously dangerous situations on construction sites.
7. What is mentioned about the new NZIA Conditions of Contract in relation to health and safety in employment matters?
- Answer: The new NZIA Conditions of Contract being negotiated with the NZ Master Builders Federation address health and safety in employment matters, with rules appearing in the nearing full agreement.
8. What are some footnotes or additional points mentioned in the practice note?
- Answer: Architects should not forget about their own safety, equip staff appropriately, and deal with the office environment. Occupational Health and Safety Officers can be helpful, and OSH offices have useful published guidelines.
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1. What is the main purpose of PN 1.211 related to Architects’ duty of care, estimates, and programming?
Answer: The main purpose of PN 1.211 is to make architects aware of their duty of care in giving price estimates and project programming, particularly addressing issues related to house design.
2. From where can the duty of care to a client potentially arise, as mentioned in the information?
Answer: The duty of care to a client can potentially arise from a contractually binding agreement, statutory duties (especially under the Consumer Guarantees Act 1993), and common law duties that may extend to other parties with whom the architect has no agreement.
3. What are common issues raised in client complaints according to the provided information?
Answer: Common issues raised in client complaints include poor initial estimates of construction cost and poor programming.
4. Why does the information suggest that architects may be losing ground in terms of cost consciousness?
Answer: The information suggests that architects may be losing ground in terms of cost consciousness because they are generally not perceived to be cost-conscious.
5. What is the recommended action regarding initial estimates of construction cost?
Answer: The recommended actions include writing to the client after considering the initial brief, indicating any concerns about designing within the budget, and suggesting a rough range of construction costs based on obtained facts.
6. How does the information advise architects to deal with programming issues?
Answer: Architects are advised to realistically assess the office’s workload, provide the client with a realistic program broken down into stages, and refer to PN5.101 for successful time allowances for each stage.
7. What is the suggested approach to managing client expectations regarding project timing?
Answer: The suggested approach is for architects to give the most realistic program possible, including a generous allowance for client approvals, and to communicate the realistic timeframes.
8. Where can architects find additional information on the initial client meeting and program allowances?
Answer: Architects can refer to PN5.101, especially item 5, “Programme,” for a successful architect’s time allowances for each stage of a well-documented house project.
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Certainly! Here are the questions and answers related to Practice Note PN 1.212:
1. What is the main purpose of PN 1.212 regarding private jobs and liability?
Answer: The main purpose of PN 1.212 is to inform both employers and employees about the implications and pitfalls of private jobs in the context of architectural practice.
2. What potential claim scenario is highlighted for employers regarding private jobs?
Answer: The potential claim scenario highlighted for employers is that a claim might arise from the activities of an employee engaging in private commissions, and even though the employing firm is not a party to the employee’s private job, the plaintiff might argue that the employer has a duty.
3. How can practices reduce the likelihood of involvement in a professional indemnity claim related to private jobs?
Answer: Practices can reduce the likelihood of involvement in a professional indemnity claim by having concisely written personnel guidelines that clearly state their attitudes towards private jobs. Expressly prohibiting the performance of outside or private work on the employer’s premises and during company time is recommended.
4. What conditions are suggested for inclusion in employment contracts regarding private jobs?
Answer: Employment contract conditions should expressly prohibit the performance of outside or private work on the employer’s premises and during company time. Additionally, the use of office equipment for private jobs should not be allowed.
5. What advice is given to employees engaged in private jobs regarding their relationship with the architectural firm?
Answer: Employees engaged in private jobs should inform their outside or private clients that the architectural firm has no involvement of any sort with the project.
6. What liability considerations are highlighted for employees engaged in private jobs?
Answer: Employees engaged in private jobs should understand that their potential liability for professional negligence is unlimited, and they are also bound by the processes of the Consumer Guarantees Act when providing services to a residential client. Professional indemnity insurance is recommended to cushion this liability.
7. What is the source of this practice note, and has it undergone any modifications?
Answer: This practice note is based on one issued by the Royal Australian Institute of Architects and has been reproduced with some modifications with the permission of the RAIA.
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Q1: What should architects ensure regarding Professional Indemnity (PI) cover for a project?
A1: Architects should ensure that the practice has adequate PI cover for the project, considering factors such as the policy limit and potential long-term resolution of claims.
Q2: What should be reviewed in relation to the level of excess?
A2: Architects should review the level of excess applicable to the nature of work they are undertaking.
Q3: What action is recommended regarding sub-consultants and their insurance cover?
A3: Architects should ensure that any sub-consultants they employ have the same level of cover offered to the client. Obtaining a cover note from sub-consultants may be necessary.
Q4: What steps should architects take if there is doubt about a possible claim?
A4: Architects should notify their insurer immediately if there is any doubt about a possible claim.
Q5: Why is it recommended to check the acceptability of unusual conditions of engagement with the insurer?
A5: To ensure that any unusual conditions of engagement are acceptable and do not pose risks, architects should check with their insurer before signing the agreement.
Q6: How should limited architectural services impact fee assessments?
A6: Architects should recognize that limited architectural services generally imply greater exposure to risk liability and acknowledge this in their fee assessments.
Q7: What should architects consider when administering a claim?
A7: Architects should remember that administering a claim involves both the policy excess and office time. It is advised to budget for both in fee assessments or annual financial plans.
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Q1: Why should architects check whether their potential client is a ‘legal person’ before accepting a commission?
A1: Architects should check whether their potential client is a ‘legal person’ before accepting a commission to ensure that the contract can be enforced.
Q2: What is a legal person, and what are the common forms of legal persons mentioned in the note?
A2: A legal person is an entity that can sue and be sued. Common forms of legal persons include natural people (individuals), companies, trusts, trustee companies, and incorporated associations.
Q3: What is the significance of a trust not being a legal person in the context of contracts?
A3: In the context of contracts, a trust is not a legal person. Therefore, any contract entered into with a trust must be with the Trustees, not the Trust itself. However, for tax and GST purposes, a trust is recognized as a separate person by the Inland Revenue Department.
Q4: What difficulties may arise in enforcing a contract, and against whom are difficulties not likely to arise?
A4: Difficulties in enforcing a contract are not likely to arise when the contract is with a legal person. However, difficulties may arise when the client is an unincorporated body, a company yet to be incorporated, a minor, or a person without legal status, such as an undischarged bankrupt or someone of unsound mind.
Q5: What is the recommendation regarding doubts about a client’s capacity to contract?
A5: When in doubt about a client’s capacity to contract, architects are recommended to seek advice from their lawyer before any potential trouble arises. This advice is particularly crucial when considering contracts outside New Zealand.
Feel free to seek clarification or ask more questions if needed!
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Q1: What is the purpose of Practice Note PN 1.215, and what does it advise NZIA Members on?
A1: The purpose of Practice Note PN 1.215 is to advise NZIA Members on the importance of using industry-standard terms of agreement for architect services and to highlight pitfalls common in non-standard agreements.
Q2: According to the note, what are the advantages of having properly negotiated, well-drafted written contracts of engagement with clients?
A2: The advantages of having properly negotiated, well-drafted written contracts of engagement with clients, as mentioned in the note, include preventing disputes about the scope of services, fees, and liability. It can also pre-empt expensive and prolonged litigation in case of negligent mistakes.
Q3: What does NZRAB Rule 50 specify regarding terms of appointment between a Registered Architect and a client?
A3: NZRAB Rule 50 specifies that a Registered Architect must not undertake professional work when the Registered Architect and the client have not agreed on the terms of appointment. These terms may include the scope of work, allocation of responsibilities, any limitation of responsibilities, fee or method of calculating it, terms of trade, provision for termination, and provision for indemnity insurance.
Q4: What are the key elements of a contract, as mentioned in the note?
A4: The key elements of a contract, as mentioned in the note, include an offer, acceptance of the offer, a mutual exchange of values under the contract (consideration), and an intention by the parties to create a legally binding contract.
Q5: Why does the note recommend caution regarding certain words and phrases in contracts, and what are some examples of such words and phrases?
A5: The note recommends caution regarding certain words and phrases in contracts because they may extend the liability or scope of work beyond what is covered by common law and insurance. Examples of such words and phrases include adjectives like “all,” “every,” “best,” “highest,” phrases like “arising out of,” “damages,” “guarantee,” “limitation of liability,” and more.
Feel free to ask if you have more questions or need further clarification!
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Q1: What is the purpose of Practice Note PN 1.216, and what does it provide an overview of?
A1: The purpose of Practice Note PN 1.216 is to provide an overview of issues related to Professional Indemnity Insurance (PII) when a client requests additional PII coverage before engaging an architect. This is referred to in clause 3.1.1 of the NZIA AAS 2011.
Q2: According to the note, what factors should architects consider when their client requests increased Professional Indemnity Insurance?
A2: When a client requests increased Professional Indemnity Insurance, architects should consider the following factors:
- Whether the requested level of cover is reasonable in the circumstances.
- If the requested level reflects the risks associated with the scope of services for the project.
- If the financial reward from the project justifies the additional expense of increasing the limit of indemnity.
Q3: What are the general considerations mentioned in the note regarding Professional Indemnity Insurance (PII)?
A3: General considerations mentioned in the note regarding PII include:
- Minimum requirements imposed by law or regulations.
- Contract value of the projects typically undertaken.
- Type of contract and delivery strategy.
- Type of client (commercial, government, small clients).
- Potential for third-party property damage claims and consequential loss claims.
- Effect of inflation on construction costs and damages awards.
- An architect’s individual perception of risk and risk-appetite.
Q4: How long might increased PII levels for a particular project need to be maintained, according to the note?
A4: Increased PII levels for a particular project will probably need to be maintained for 6 years from the completion of the works under the Agreement for Architectural Services or at least for 10 years to protect against tortuous claims outside the contract.
Q5: What advice does the note give when a client requests additional professional indemnity cover?
A5: The note advises architects not to automatically agree to the client’s request without considering the possible consequences. Architects should review their PII requirements with their insurance broker, discuss who will pay for increased premiums, consider the PII of sub-consultants, and negotiate the level of cover acceptable to them.
Feel free to ask if you have more questions or need further clarification!
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Q1: What is the purpose of Practice Note PN 1.217, and what does it address?
A1: The purpose of Practice Note PN 1.217 is to provide information and guidance on the formation of contracts and the fundamental elements associated with contracts, including the rights and obligations of the parties involved.
Q2: What are the two kinds of contracts mentioned in the note, and how do they differ?
A2: The two kinds of contracts mentioned in the note are:
1. Contract under seal: Valid without consideration, requires writing, and is expressed as signed, sealed, and delivered. Used in cases where there is no consideration (a gratuitous promise).
2. Simple contract: Depends on the existence of consideration, can be in writing or oral. Contrary to a popular misconception, oral contracts are legally binding and enforceable.
Q3: What are the basic elements necessary for the existence of a contract, as mentioned in the note?
A3: The basic elements necessary for the existence of a contract are:
1. An offer.
2. Acceptance of that offer.
3. Consideration.
4. Intention to create legal relations.
5. Legal capacity.
6. Genuine consent.
7. Legality of objects.
Q4: How can an offer be revoked, and when does it become irrevocable?
A4: An offer may be revoked at any time before it is accepted. Once accepted, it becomes irrevocable. However, an offer under seal might be irrevocable as it is considered ‘a thing done beyond recall.’
Q5: What are the two types of terms a contract may be composed of, and how do they differ?
A5: A contract may be composed of either:
1. Express terms: Major or vital components, considered “conditions” if vital. Breach of a condition allows the innocent party to be discharged from further obligations.
2. Implied terms: Inferred from the conduct of the parties alone, indicating intention. Implied promises can be reasonably construed from a person’s conduct, and the important test is how the conduct appeared to a reasonable bystander.
Feel free to ask if you have more questions or need further clarification!
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Q1: What is the purpose of Practice Note PN 1.218, and what does it focus on?
A1: The purpose of Practice Note PN 1.218 is to outline how all documentation should be signed off by the NZIA Practice, focusing on the manner of signing documents as part of the wider issue of Architect’s personal liability and how to avoid or minimize this.
Q2: What are the recommended signing formats for documents, listed from strongest to weakest position in arguing against personal liability?
A2: The recommended signing formats for documents, listed from strongest to weakest position in arguing against personal liability, are:
1. The Practice name and signing the Practice name only (NZIA’s recommendation).
2. The Practice name followed by “per [the individual’s name/title]” and then the individual signing.
3. The individual signing “for” or “on behalf of” or “for and on behalf of” the Practice.
4. The individual signing.
Q3: What is the reason for not signing documents as an individual, and how does it relate to personal liability?
A3: The reason for not signing documents such as Practical Completion Certificates, letters, etc., as an individual is to minimize the prospect of the individual being sued and found personally liable for the statements in the documents.
Q4: How does the signing format contribute to the argument against personal liability in a legal context?
A4: Signing with only the actual name of the Practice without an individual’s name being signed is the clearest way to indicate that the Practice, and not any individual, is accepting legal responsibility for the statements in the document. This provides a helpful factor in supporting an argument at court against imposing personal legal liability on the individual.
Q5: What are the recommendations for preventing personal liability in negligence, especially regarding engagement contracts and issued documents?
A5: Practices are recommended to:
- Include a “no personal liability” provision in their engagement contracts.
- Include a personal liability disclaimer in documents being issued, especially in more formal documents such as Reports, Practical Completion Certificates, Defect Liability Certificates, and Compliance Statements.
Feel free to ask if you have more questions or need further clarification!
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Certainly! Here’s a set of questions and answers based on the provided information:
Q1: What is the purpose of Practice Note PN 1.219 regarding the Health and Safety at Work Act 2015 in New Zealand?
A1: The purpose of Practice Note PN 1.219 is to help members understand their obligations under the new Health and Safety at Work Act, effective from April 4, 2016. It aims to provide guidance on complying with the Act and emphasizes the need for clear records of safety measures.
Q2: Who are considered ‘upstream’ duty holders under the Act?
A2: Designers are referred to as ‘upstream’ duty holders, signifying their influence over the safety of plants, substances, or structures before they are in use. Their actions can impact the safety of those ‘downstream’ in the lifecycle.
Q3: What duties do practices have as PCBUs under the Act?
A3: Practices, as PCBUs (Persons Conducting a Business or Undertaking), have several duties, including ensuring the health and safety of workers, managing risk in workplaces, consulting with workers on safety matters, and fulfilling specific duties as designers.
Q4: What factors determine the group of persons owed a duty by a practice?
A4: Practices owe duties to persons employed or engaged by them, those working in their business or undertaking, those influenced or directed in their work, and those affected by the workplace. This includes residents and visitors present during work activities.
Q5: How can practices discharge their health and safety obligations as PCBUs?
A5: Practices should identify health and safety needs, assess emergency response preparedness, allocate sufficient resources, implement and supervise health and safety policies, provide training, cooperate with other PCBUs, record incidents, and set disciplinary actions when necessary.
Q6: What additional obligations do designers (practices) have under the Act?
A6: Designers must ensure that designs are without risks to health and safety, consult with other PCBUs and designers, conduct necessary analysis and testing, and provide relevant health and safety information about the design.
Q7: How can designers address their obligations throughout the lifecycle of a design?
A7: Designers should identify hazards, assess risks, design effective control measures, review control measures, and consider the lifecycle of the structure. They must also provide health and safety information and carry out necessary analysis and testing.
Q8: What practical steps can designers take to comply with health and safety duties?
A8: Designers should document their design thinking, conduct risk assessments, seek information on maintenance and activities, comply with standards, keep records of health and safety information, and collaborate with other PCBUs on complex projects.
These questions and answers provide a brief overview of the key points from the provided information. If you have more specific questions, feel free to ask!
Q1: What is the due diligence duty of officers under the Health and Safety at Work Act 2015?
A1: Officers have a due diligence duty to ensure the PCBU complies with its duties. This includes acquiring knowledge, understanding operations and associated risks, ensuring resources for risk management, and verifying their implementation.
Q2: How does due diligence for officers contribute to improved leadership and a safety culture?
A2: Due diligence duties of officers support improved leadership by influencing the safety culture of a practice. Effective risk management begins with a commitment to health and safety from those managing the business or undertaking.
Q3: What are some practical considerations for officers to fulfill their due diligence duties?
A3: Officers should prepare a health and safety commitment statement, understand operations and hazards, hold senior management accountable, receive comprehensive updates, monitor performance, allocate adequate resources, rely on credible information, obtain expert advice, and arrange periodic reviews.
Q4: What are the key terms introduced by the Health and Safety at Work Act 2015?
A4: Key terms include PCBU (Person Conducting a Business or Undertaking), worker, officer, and reasonably practicable.
Q5: How does the Act handle overlapping duties among duty holders?
A5: The Act emphasizes that PCBUs owe duties not only to their workers but also to those affected by their work. Overlapping duties require collaboration, consultation, cooperation, and coordination among duty holders.
Q6: What is the primary duty of care of PCBUs under the Act?
A6: PCBUs have the primary duty of care to provide and maintain a work environment without risks to health and safety. This includes ensuring the health and safety of persons other than workers.
Q7: What duty do officers owe as per the Act, and how is it different from other duty holders?
A7: Officers have a due diligence duty to ensure the PCBU complies with its health and safety duties. This duty is proactive and involves taking positive action. Officers may belong to more than one class of duty holder.
Q8: How does the Act handle volunteers in the workplace?
A8: Volunteers are categorized as casual volunteers or volunteer workers. Casual volunteers are owed duties like customers or visitors, while volunteer workers have duties similar to any other worker.
Q9: What does “reasonably practicable” mean under the Act?
A9: “Reasonably practicable” means what is or was reasonably able to be done at a particular time to ensure health and safety. It involves considering the likelihood and degree of harm, knowledge about hazards, and available ways to eliminate or minimize risks.
Q10: What resources and links are available to assist in understanding and complying with the Act?
A10: MBIE and WorkSafe are preparing regulations, and exposure drafts are available. Various resources and links, including guidelines and codes of practice, are provided for reference.
Feel free to reach out if you have more questions or need further details!
Flashcard 1:
- Question: What is the primary focus of Practice Note PN 1.220?
- Answer: Practice Note PN 1.220 focuses on Health & Safety Engagement, Representation, and Participation within architectural practices.
Flashcard 2:
- Question: According to the Health and Safety at Work Act 2015 (HASAW Act), why is engagement and participation crucial?
- Answer: Engagement and participation are essential requirements of the HASAW Act, contributing to the effective identification, management, and implementation of health and safety measures in the workplace.
Flashcard 3:
- Question: How does engagement and participation contribute to a healthy and safe workplace culture?
- Answer: Engagement involves active participation at all levels, fostering a culture that supports a healthy and safe workplace through forums, feedback channels, representation opportunities, and communication.
Flashcard 4:
- Question: What does the term ‘workers’ encompass in the context of the HASAW Act?
- Answer: ‘Workers’ include the Practice’s paid staff, contractors, and any individuals engaged by the Practice for work, as per the language of the HASAW Act.
Flashcard 5:
- Question: What is the recommended approach for members engaging with other businesses in common projects?
- Answer: Members should consult with each other throughout projects, considering overlapping duties (e.g., architect, builder, subcontractor) to ensure effective risk management. Control may shift based on project stages and knowledge.
Flashcard 6:
- Question: What is suggested for project kick-off meetings to ensure health and safety success?
- Answer: Project kick-off meetings should have dedicated parts for project scope and health and safety. Roles should be clarified, and a health and safety execution plan should differentiate between project stages.
Flashcard 7:
- Question: How does the Practice Note define an engaged practice?
- Answer: An engaged practice involves open communication, responsible leadership, staff participation, informed decision-making, regular issue-raising, and collaborative hazard identification and risk assessment.
Flashcard 8:
- Question: According to the HASAW Act 2015 regulations, what is the default worker-to-health-and-safety-representative ratio?
- Answer: The default ratio is 19:1 (workers to health and safety representatives), but practices should ensure clear channels for everyone to be involved in health and safety considerations.
Flashcard 9:
- Question: What additional duties do certain roles, termed “Officers,” have under the HASAW Act?
- Answer: Officers, including directors, owners, and partners, have additional due diligence duties, and guidance for them can be found at sites such as the Institute of Directors and WorkSafe.
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Flashcard 1:
- Question: What is the primary duty of an architect according to the HASAW Act 2015 in the context of design?
- Answer: The architect’s duty, as per the HASAW Act 2015, is to ensure, as far as reasonably practicable, that the designed structure poses no risks to persons. This involves eliminating or minimizing hazardous work and providing relevant information.
Flashcard 2:
- Question: How does on-site observation contribute to safety in design for architects?
- Answer: On-site observation allows architects to respond to field changes during construction, addressing issues promptly. It is crucial for the safe design principles, ensuring structures are without risks to health and safety.
Flashcard 3:
- Question: What considerations are highlighted for architects planning on-site observations?
- Answer: Prior to observation, architects should discuss the purpose, stay informed about design modifications, understand regulatory requirements, coordinate with the principal builder, review pay requests, and be familiar with PPE and competency requirements.
Flashcard 4:
- Question: How should architects conduct on-site observations in terms of safety?
- Answer: Architects should stay with the site escort, keep to accessible areas, be aware of surroundings, follow safety rules, and inform about identified hazards. They must document key points from the observation, assess material substitutions, and act on identified issues.
Flashcard 5:
- Question: What precautions are advised for architects on non-construction sites?
- Answer: Architects visiting non-construction sites should be aware of hazards like raised platforms, electrical hazards, excavations, old buildings, working alone, water proximity, animals, traffic, hazardous substances, machinery, and quad bikes. They should conduct risk assessments and take appropriate precautions.
Flashcard 6:
- Question: What additional resources are recommended for architects undertaking on-site observation?
- Answer: WorkSafe NZ’s toolkit, Site Safe New Zealand’s Safety Plans, ACC publications on construction hazards, and OSHA’s webpage on worker safety provide additional guidance and checklists for health and safety in construction.
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Flashcard 1:
- Question: What is the primary duty of businesses as employers regarding the health and well-being of employees, as stated in the practice note?
- Answer: Businesses, as employers, have a duty to ensure the health, safety, and welfare of their employees as far as reasonably practicable. They are also required to mitigate factors that could harm employees’ physical and mental well-being.
Flashcard 2:
- Question: How prevalent are mental health issues in professional services, and what does the NZIA recommend for member practices?
- Answer: Mental health issues are more prevalent in professional services, with one in three professionals experiencing some form of mental illness. NZIA recommends member practices take a proactive approach to enhance well-being, making it a core priority and incorporating it into relevant policies.
Flashcard 3:
- Question: What are the three general causes of mental health conditions in the workplace, according to the practice note?
- Answer: The three general causes are workplace factors (related to work), home/work conflict factors (related to life events outside the office), and bio-psychosocial factors (related to an individual’s personal makeup).
Flashcard 4:
- Question: What are some job design factors affecting mental health, and how can they be managed?
- Answer: Job design factors include demand and control, job characteristics, resources and engagement, and regular exposure to trauma. Managing these involves addressing cognitive demands, providing positive job characteristics, ensuring sufficient resources, and handling exposure to trauma appropriately.
Flashcard 5:
- Question: What are some team/group factors within the workplace affecting mental health, and how can they be addressed?
- Answer: Factors include support from colleagues and managers, the quality of interpersonal relationships, and manager training and leadership. Addressing these involves promoting social support, improving relationships, and ensuring managers receive mental health training.
Flashcard 6:
- Question: What are some organizational level factors within the workplace affecting mental health, and how can they be improved?
- Answer: Factors include organizational climate, organizational support, organizational justice, recognizing and rewarding work, psychosocial safety climate, stigma in the workplace, and organizational changes. Improvements can be made through senior management commitment, fostering a positive climate, and addressing issues like stigma and job insecurity.
Flashcard 7:
- Question: What evidence-based strategies are recommended for promoting a mentally thriving workplace?
- Answer: Strategies include designing and managing work to minimize harm, promoting protective factors at an organizational level, enhancing personal resilience, promoting and facilitating early help-seeking, supporting workers’ recovery from mental illness, and increasing awareness of mental health and reducing stigma.
Flashcard 8:
- Question: How can workplaces promote personal resilience among employees, according to the practice note?
- Answer: Personal resilience can be promoted through resilience programs, coaching and mentoring, regular physical activity, and encouraging employee participation and flexibility around work hours.
Flashcard 9:
- Question: What are some strategies for supporting workers’ recovery from mental illness, as mentioned in the practice note?
- Answer: Supporting recovery involves providing appropriate training to supervisors and managers, offering options such as partial sickness absence or adjusted duties, implementing return-to-work programs based on cognitive behavioral therapy, and fostering a supportive environment.
Flashcard 10:
- Question: How can workplaces increase awareness of mental health and reduce stigma, according to the practice note?
- Answer: Increasing awareness involves mental health education, first aid training, and programs like Mental Health First Aid, aiming to educate workers on how to help others in mental health crises.
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Flashcard 11:
- Question: What legislative and regulatory changes have occurred following the Christchurch earthquake of 2011, and what responsibility do PCBUs and building owners have under the Health and Safety at Work Act 2015 and Building Act 2004?
- Answer: The legislative and regulatory changes involve the Health and Safety at Work Act 2015 and Building Act 2004. PCBUs have a legal responsibility to make the workplace safe for staff and visitors, including managing building-related hazards. Building owners must meet the requirements of the Building Act 2004, and changes aim to ensure a consistent approach to seismic performance.
Flashcard 12:
- Question: What is the expected impact of the Building (Earthquake-prone Buildings) Amendment Bill, and when is it anticipated to come into force?
- Answer: The Building (Earthquake-prone Buildings) Amendment Bill, expected to come into force on 1 July 2017, aims to consolidate the approach to assessing earthquake-prone buildings between councils, providing more leadership and direction at a national level.
Flashcard 13:
- Question: What are the responsibilities of building owners in relation to earthquake-prone buildings (EPBs), and how is the risk of EPBs measured?
- Answer: Building owners of newly-assessed EPBs must provide an engineering assessment to the territorial authority within 12 months. Risk assessment involves comparing the building’s performance to the performance required of a new building, considering the probability and severity of earthquakes.
Flashcard 14:
- Question: How will public awareness of earthquake risk be improved, and what changes are proposed in the legislation regarding earthquake-prone buildings?
- Answer: Public awareness will be improved through new EPB notices and the implementation of a national register of EPBs. Proposed changes include a consistent, national EPB register, providing access to information about earthquake-prone buildings and their ratings.
Flashcard 15:
- Question: What requirements exist for new buildings in terms of seismic performance, and how are older buildings assessed against the New Building Standard (NBS)?
- Answer: New buildings must comply with the New Building Standard (NBS) to ensure they do not collapse based on a standardized earthquake. Older buildings are assessed against the NBS through an Initial Evaluation Procedure (IEP), with a percentage derived to inform necessary next steps, such as a Detailed Seismic Assessment (DSA).
Flashcard 16:
- Question: What is the key message under the current Building Act regarding buildings found to be at or below 33% of the New Building Standard (NBS)?
- Answer: Buildings found to be at or below 33% of the NBS are defined as “Earthquake Prone,” requiring a detailed assessment. This ensures that only higher-risk buildings undergo the expensive exercise of a detailed assessment.
Flashcard 17:
- Question: What is the timeframe for building owners to bring an earthquake-prone building above the threshold (34% of NBS) after a detailed assessment, and what is the normal prudent target for remedial work?
- Answer: Building owners have between 5-10 years to bring an earthquake-prone building above the threshold after a detailed assessment. The normal prudent target for remedial work is to achieve a result in the 60-70% level.
Flashcard 18:
- Question: When might a building be considered a “Dangerous Building,” and what steps are required if a building is found to be dangerous?
- Answer: A building with a very low percentage after a Detailed Seismic Assessment (DSA) might be considered a “Dangerous Building.” The building may need to be closed, and there is no clear percentage defining dangerous, but precedents exist for buildings at 15% or below being closed. Guidance should be sought in cases of uncertainty from the regulator and relevant territorial authority.
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Flashcard 19:
- Question: What is the purpose of Practice Note PN 1.225, and who does it target?
- Answer: Practice Note PN 1.225 aims to guide the New Zealand Institute of Architects (NZIA) members working in environments with hazardous substances or designing structures involving such substances. It addresses the legal responsibilities of PCBUs and provides guidelines for managing hazardous substances safely.
Flashcard 20:
- Question: What are some common hazardous substances mentioned in the practice note, and how can they cause harm?
- Answer: Common hazardous substances include commercial cleaning products, paints, adhesives, acids, bases, and solvents. Improper use can cause serious harm, emphasizing the need for safe handling and management.
Flashcard 21:
- Question: According to the note, what are the legal responsibilities of PCBUs concerning hazardous substances, and in what order should hazards be managed?
- Answer: PCBUs have a legal responsibility to make the workplace safe. Hazards should be managed by eliminating, isolating, or minimizing them, with elimination and substitution preferred. If not possible, appropriate controls like physical barriers and protective clothing should be used.
Flashcard 22:
- Question: What is the significance of the Hazardous Substances and New Organisms Act’s review mentioned in the practice note?
- Answer: The review of the Hazardous Substances and New Organisms Act is noted, with changes expected to come into force in 2017. Members are encouraged to be aware of these regulations and stay updated on changes.
Flashcard 23:
- Question: What are the HSNO classes mentioned in the note, and can you provide examples of each class?
- Answer: The HSNO classes include explosives, flammable gases, flammable liquids, flammable solids, oxidising substances, substances toxic to people, corrosive substances, and substances toxic to the environment. Examples include chemicals, gases, and liquids with corresponding properties.
Flashcard 24:
- Question: What are some controls always needed for managing hazardous substances, as mentioned in the practice note?
- Answer: A list of all hazardous substances used, an assessment of hazards with elimination or minimization, staff training, and emergency procedures are controls always needed for managing hazardous substances.
Flashcard 25:
- Question: What additional controls are suggested for consideration in the practice note, and why might they be necessary?
- Answer: Additional controls include fire extinguishers, signs, approved handlers, location test certificates, hazardous atmosphere zones, emergency response plans, and secondary containment. They may be necessary based on the types and amounts of hazardous substances present.
Flashcard 26:
- Question: How does the note recommend assessing exposure to hazardous substances, and why is it important?
- Answer: Assessing exposure involves creating an inventory of all substances, reading product labels and safety data sheets, determining potential exposure, and sampling the workplace and personnel. It’s important to ensure safety and health and make informed decisions on exposure prevention.
Flashcard 27:
- Question: What are the suggested steps for preventing exposure to hazardous substances, and what factors should be considered?
- Answer: The first preference is elimination, followed by isolation and minimization. Factors such as health status (e.g., asthma, pregnancy) should be considered when making decisions to keep staff safe.
Flashcard 28:
- Question: How does the practice note recommend controlling exposure to hazardous substances, and what methods are suggested?
- Answer: The note recommends isolation, substitution, and minimization. Minimization can be achieved through engineering controls, administrative controls, and providing personal protective equipment (PPE) to staff.
Flashcard 29:
- Question: Why is monitoring exposure to hazardous substances important, and what methods are suggested for monitoring?
- Answer: Monitoring ensures the effectiveness of control measures and protects staff health. Methods include health monitoring (e.g., respiratory function tests) and exposure monitoring (e.g., air monitoring, blood, and urine tests).
Flashcard 30:
- Question: How does the practice note emphasize the importance of training staff, and what topics should be covered in training?
- Answer: Training should cover measures to reduce exposure, proper use and storage of hazardous substances, and the importance of personal protective equipment (PPE). It is essential to ensure staff is aware of safety protocols.
Flashcard 31:
- Question: What are Major Hazard Facilities (MHFs), and why is it important for NZIA members to understand the regulations associated with them?
- Answer: MHFs are workplaces with significant inherent hazards due to large quantities of specified hazardous substances. Understanding MHF regulations is crucial as members might undertake work associated with such facilities, requiring compliance with design notices and safety cases for approval by the regulator (WorkSafe).
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Flashcard Set: Practice Note PN 1.226 Electronic Signatures
Flashcard 32:
- Question: What is the purpose of Practice Note PN 1.226, and what does it aim to clarify?
- Answer: Practice Note PN 1.226 aims to clarify the legal requirements for electronic signatures for members of the New Zealand Institute of Architects (NZIA). It provides two clauses that should be incorporated into NZIA AAS 2018.
Flashcard 33:
- Question: Which Act has replaced the Electronic Transactions Act, and what key section is relevant to electronic signatures?
- Answer: The Electronic Transactions Act has been replaced by the Contract and Commercial Law Act 2017 (CCLA). Section 226 of the CCLA is relevant to legal requirements for electronic signatures.
Flashcard 34:
- Question: What are the legal requirements for a signature, other than a witness’s signature, to be met by an electronic signature under section 226 of the CCLA?
- Answer: The electronic signature must adequately identify the signatory and indicate the signatory’s approval of the information to which the signature relates. Additionally, it must be as reliable as is appropriate given the purpose and circumstances for which the signature is required.
Flashcard 35:
- Question: How is the reliability of an electronic signature determined, and what presumption does the Act provide to users of e-signatures?
- Answer: The reliability of an electronic signature is determined based on its appropriateness for the purpose and circumstances. The Act provides users with a rebuttable presumption of reliability if certain requirements are met (Section 228 of the CCLA).
Flashcard 36:
- Question: What potential problem is mentioned regarding the reliability of electronic signatures, and how is it addressed in the Act?
- Answer: The Act acknowledges the potential problem that the reliability of an electronic signature can only be determined after its use. To provide certainty, the Act gives users a rebuttable presumption of reliability if certain requirements are met (Section 228 of the CCLA).
Flashcard 37:
- Question: Why is it mentioned that electronic clauses are relatively unusual in contracts, and what example is provided to illustrate the use of electronic signatures in legal agreements?
- Answer: Electronic clauses are relatively unusual due to concerns about reliability. An example is given where a party used an email to indicate agreement to legal terms, and the court accepted the email as a valid electronic signature.
Flashcard 38:
- Question: What two clauses are recommended to be incorporated into NZIA AAS 2018 regarding electronic signatures, and what is their purpose?
- Answer: The recommended clauses deal with the execution of documents and situations where the client communicates in electronic form. They are intended to address issues with reliability and clarify the legal status of electronic communications and signatures.
Flashcard 39:
- Question: Can you provide the text of the two clauses recommended for incorporation into NZIA AAS 2018?
- Answer:
- “If the Client elects to sign this document using an electronic communication, then any such communication shall be deemed to be an electronic signature for the purpose of section 226 of the Contract and Commercial Law Act 2017 and can be relied on by the Architect to bind the Client.”
- “During the undertaking of the Architect’s services, any electronic communication shall be deemed to be an electronic signature for the purpose of section 226 of the Contract and Commercial Law Act 2017 and binding on the Client to the extent that the Architect relies on it.”
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Flashcard Set: Practice Note PN 1.305 Employment Agreements
Flashcard 40:
- Question: What is the purpose of Practice Note PN 1.305, and what does it provide guidance on?
- Answer: Practice Note PN 1.305 provides brief guidance to architectural practices on employment agreements and offers a pro-forma employment agreement. It covers various aspects such as legal requirements, pro-forma customization, and specific clauses.
Flashcard 41:
- Question: According to the Employment Relations Act 2000, what is the legal requirement concerning employment relationships?
- Answer: The Employment Relations Act 2000 requires parties to an employment relationship to record the terms in writing. It is a legal requirement to have a written employment agreement, and failure to do so can result in financial penalties.
Flashcard 42:
- Question: What are the key elements that the pro-forma employment agreement should include, according to section 2.3 of the note?
- Answer: The agreement should identify the parties, describe the work, indicate the work location, set out guaranteed hours of work, specify wages or salary, explain services to resolve employment problems, and include statements on public holiday pay and employee protection provision.
Flashcard 43:
- Question: What entitlements does the Holidays Act provide for employees, according to section 2.4 of the note?
- Answer: The Holidays Act provides for four weeks’ annual holidays, public holidays with extra pay, paid sick leave (up to 20 days), and bereavement leave. From April 1, 2019, employees are entitled to up to 10 days’ domestic violence leave.
Flashcard 44:
- Question: According to section 3.0, what is the recommended best practice regarding performance reviews?
- Answer: Best practice suggests that all staff should have the opportunity to participate in a performance review or appraisal at least on an annual basis. This helps in understanding expectations, assessing performance, and fostering personal/career development.
Flashcard 45:
- Question: What is the purpose of trial periods, and what are the conditions for their enforceability, as per section 4.4 of the note?
- Answer: Trial periods allow employers to terminate employment without personal grievance claims. Conditions for enforceability include written inclusion in the employment agreement, specifying a period not exceeding 90 days, and providing the employee with the opportunity to take advice.
Flashcard 46:
- Question: What is the difference between trial periods and probationary periods, as outlined in section 4.1 and 5.1 of the note?
- Answer: Trial periods are for new employees and last up to 90 days, while probationary periods can be agreed upon at the start of employment and involve a fair disciplinary or performance management process.
Flashcard 47:
- Question: What notice period does the pro-forma employment agreement recommend in section 7.1?
- Answer: The pro-forma employment agreement recommends a notice period of four weeks. However, it acknowledges that this can be modified based on the employee’s seniority and responsibilities.
Flashcard 48:
- Question: According to section 8.1, what entitlements and obligations does the Parental Leave and Employment Protection Act 1987 provide for employees and employers?
- Answer: The Act provides employees with entitlements for parental leave based on different circumstances, and employers have obligations to confirm entitlements, keep positions open, and offer preference for vacant positions after parental leave.
Flashcard 49:
- Question: What types of leave are outlined in section 8.2, and what are the entitlements for primary carer’s leave, partner’s leave, and extended leave?
- Answer: The types of leave include special leave, primary carer’s leave, partner’s leave, and extended leave. Entitlements depend on the employment period and specific circumstances, with maximum leave periods defined.
Flashcard 50:
- Question: What legal obligations do employers have under the Health and Safety at Work Act 2015, as mentioned in section 9.1?
- Answer: Employers, directors, and persons in control of a business must comply with legal obligations outlined in the Health and Safety at Work Act 2015. This includes having comprehensive health and safety policies, hazard/risk registers, and actively reviewing health and safety matters.
Flashcard 51:
- Question: What is a restraint of trade clause, and what factors should be considered when including one, according to section 10.0?
- Answer: A restraint of trade clause restricts former employees from certain activities. Factors to consider include duration, scope, and the necessity to protect legitimate proprietary interests. It is recommended to seek legal advice before including such clauses.
Flashcard 52:
- Question: Why is a comprehensive confidentiality provision recommended in section 10.6, and what should it define?
- Answer: A confidentiality provision is recommended to protect confidential information. It should define confidential information carefully, listing any data considered special or particular to the practice.
Flashcard 53:
- Question: What does the conflict of interest clause in the pro-forma agreement address, as mentioned in section 11.1?
- Answer: The conflict of interest clause addresses the declaration of conflicts of interest by employees. A template conflict of interest declaration is included as Appendix B.
Flashcard 54:
- Question: What is the conclusion and recommendation provided in section 12.0?
- Answer: The conclusion emphasizes the complexity of employment law and recommends seeking competent professional advice when dealing with employment issues. The enforceability of an employment contract depends on establishing a fair relationship in good faith.
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Q1: What is the purpose of Practice Note PN 1.306?
- A: The purpose is to provide brief guidance to practices regarding the engagement of independent contractors or service providers.
Q2: Why is it important to ensure the real nature of the relationship when engaging independent contractors?
- A: To avoid misclassification; individuals closely controlled, integrated into the business, or not operating as a separate business may gain access to employment rights despite contractual terms.
Q3: What are some indicators of an employment relationship?
- A:
- Set hours, work nature similar to employees, working at the company’s premises, leave entitlements, payment for overtime, company-provided vehicle, use of company’s equipment, inability to profit from efficient work management, inability to subcontract, high control over daily activities, subject to PAYE and other deductions.
Q4: What are indicators of a principal-contractor relationship?
- A:
- GST registered, responsible for own ACC levies and insurances, operates through a limited liability company, provides own equipment, bears fuel costs, no guaranteed work, ability to earn income based on availability and performance, work not integral to the company’s main business, ability to provide services to different organizations, ability to subcontract, payment not in the form of a salary.
Q5: What are the advantages of engaging an independent contractor?
- A:
- No application of employment laws, flexibility in terms, easier management, potential tax advantages.
Q6: What are the disadvantages of independent contractor status?
- A:
- Lack of obligations of good faith, loyalty, fidelity; the need to maintain true independence limits benefits and protections.
Q7: What are the advantages of engaging a worker as an employee?
- A:
- More control, guaranteed personal service, certainty in worker status.
Q8: What are the disadvantages of engaging a worker as an employee?
- A:
- Compliance with employment laws, limited termination reasons, increased costs.
Q9: What are the key risks to a principal if a contractor is found to be an employee?
- A:
- Unpaid PAYE, leave entitlement liabilities, employee protections, potential personal grievance claims.
Q10: What are some other types of engagement mentioned in the document?
- A:
- Casual employment (as-and-when-required basis), fixed-term employment (agreed set period).
Q11: What responsibility do independent contractors have regarding insurance?
- A: Independent contractors should carry their own Professional Indemnity Insurance as they are not normally covered by the architectural practice contracting them.
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Flashcard Questions and Answers:
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Q: What is the purpose of Practice Note PN 1.301?
- A: The purpose is to outline the advantages and disadvantages of Sole Practice in architecture.
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Q: List three advantages of Sole Practice mentioned in the document.
- A:
- Simplicity in forming, organizing, and controlling the practice.
- Minimal accommodation and operating costs.
- Complete freedom for the Sole Practitioner in determining services offered.
- A:
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Q: What are two disadvantages of Sole Practice discussed in the document?
- A:
- Sole responsibility for any financial losses.
- Isolation from other professionals, limiting professional development and the exchange of ideas.
- A:
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Q: According to the document, what might be a challenge for a Sole Practitioner when several commissions are received simultaneously?
- A: Difficulty in meeting the demands of each client, and clients may expect their commission to have priority.
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Q: What action/advice does the document provide for individuals considering Sole Practice?
- A: It advises to refer to NZIA booklets, decide on the type of work to attract, select suitable premises, register for GST, set up a separate practice cheque account, engage an accountant, obtain professional indemnity insurance, and more.
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Q: What is the recommended step regarding a business plan for Sole Practitioners?
- A: Draw up a business plan and review it at least quarterly, reconciling costs with projected income and personal expenses.
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Q: Why is involvement with other sole practitioners or small practices encouraged in the document?
- A: It promotes information sharing, problem-solving, and resource-sharing through local Practice Support Groups.
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Q: What is the significance of obtaining professional indemnity insurance for Sole Practitioners?
- A: It is important for risk management, and the Acanthus insurance group specializes in providing professional indemnity insurance for architects. Architects must join the NZ Architects Co-operative Society (NZACS) to be eligible for PII through Acanthus.
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Flashcard Questions and Answers:
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Q: What is the purpose of Practice Note PN 1.302?
- A: The purpose is to enable Architects and their legal advisers to make informed decisions when drawing up or revising practice agreements, specifically focusing on partnerships.
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Q: According to the document, what factors influence the nature of a partnership?
- A: The size of the firm, issues considered important by principals, and the degree of consensus reached on these issues.
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Q: What are some issues that should be addressed in a partnership agreement, as mentioned in the document?
- A: Recitals, property ownership and contributions, capital requirements, share of profits, costs and losses, voting procedures, banking matters, accounting, annual accounts, partnership funds, partner’s drawings, partner’s work, partner’s accountability, hiring and firing, partner’s private debts, partner’s holidays, retirement, death of a partner, prolonged absence through illness or disability, notice procedures, and arbitration.
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Q: Why is it important to discuss certain provisions with an accountant or tax consultant?
- A: Certain provisions or benefits for partners may have substantially different tax implications, and it is important to fully discuss these with an accountant or tax consultant.
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Q: According to the document, why is the issue of goodwill important when calculating the amount due to a retiring partner?
- A: Goodwill may be included in the calculation, and it is essential to discuss this issue with an accountant.
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Q: What is the significance of professional indemnity insurance in the context of retiring partners?
- A: Retiring partners should be covered under the Professional Indemnity Insurance run-off cover of the continuing firm.
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Q: What does the document suggest about serving notices under a partnership agreement?
- A: The usual provision is serving notices by pre-paid post to the last known address of the party upon whom it is sought to serve the notice.
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Q: What does the document emphasize regarding the structure of professional partnership agreements?
- A: The wide variation in the structure of professional partnership agreements indicates that assumptions cannot be made as to what is acceptable or desirable to others, and each point in the agreement needs to be considered fully at the outset for reasoned consensus.
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Flashcard Questions and Answers:
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Q: What factors are considered in determining the value of an architectural practice, according to Practice Note PN 1.304?
- A: The physical features (assets), work in progress, past and anticipated monetary performance (profit), and the value of the name and reputation of the practice and its principals (goodwill).
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Q: How do professionals and businesses often establish a rule of thumb valuation, as mentioned in the document?
- A: The accounting profession, for example, uses a dollar-for-dollar base, where a purchaser starts negotiation based on one dollar of purchase price for each dollar of fees earned by the practice annually.
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Q: What are some reasons for undertaking a valuation of an architectural practice?
- A: To assess the practice’s worth, retirement planning, introducing replacement principals, removing a principal, contemplating the sale of the practice, or elevating an employee.
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Q: According to the document, how might the structure of the practice affect its valuation?
- A: The value may vary depending on whether it’s a sole proprietorship, partnership, or a company, each having different considerations such as owner skills, continuity, and share structures.
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Q: Why is it important for a practice to have relevant documentation covering valuations?
- A: Documentation, like a partnership agreement or company articles, is crucial for understanding the agreed-upon procedures for valuation.
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Q: How does the general economic environment impact architectural practices?
- A: Architectural practices are directly affected by the economy and fluctuations in the building industry. A study of the economy and future projections is necessary for a practice valuation.
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Q: What is the EBIT Multiple, and how is it calculated?
- A: The EBIT Multiple is a figure based on future prospects, present and past profitability, management skills, and various other factors. It is calculated by multiplying the average profit (EBIT) by the estimated EBIT Multiple.
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Q: What does Net Tangible Asset Backing represent in the context of business valuation?
- A: Net Tangible Asset Backing represents the surplus of tangible assets over the liabilities of the business on a going concern basis, supporting the underlying strength of the earnings of the business.
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Q: What does the document emphasize regarding the valuation of an architectural practice?
- A: There is no simple rule of thumb for valuation; it depends on measurable financial aspects like net asset value and work in progress, as well as the less easily measurable goodwill. The value must be realistic, have market acceptability, and be capable of financing without undue strain.
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