Report 12

Regulation of Builders and Building Surveyors

Key findings

  • The Commission has not fully implemented its reform program. Four of the 11 steps are completed, 5 in progress and 2 yet to get underway. The Commission estimates it will complete the reform program in 2018. The most important steps not yet implemented include:
    • A database of building permits approved by LGs. Centralised reporting would ensure the Commission has up-to-date information on all home building activity. This will provide a good starting point for proactive compliance work and monitoring HII risk.
    • An online licensing system for builders and surveyors to enable the Commission to electronically receive and process applications. It is therefore still reliant on inefficient paper-based systems.

Read more….The Commission is still implementing the reforms introduced in 2011

  • The Commission satisfactorily checks the qualifications, experience and financial status of applicants for a new or renewed licence and the character of new WA applicants through a National Police Clearance check (NPC).
  • However, character checks on applicants seeking a licence renewal and on interstate applicants who hold an interstate licence is limited to asking these persons to disclose any misconduct or criminal history. This approach risks issuing a licence to an unsuitable person and is inconsistent with common practice elsewhere in government. The Commission advised that it will start requiring NPCs for licence renewals when it introduces online licensing though this is not scheduled to happen until 2018.
  • The Commission has taken steps to improve the time taken to process licence applications after migrating to Commerce’s licensing system in 2014 but the time taken still exceeds the targets. Sixty-three percent of the applications we tested took longer than 10 days and 45% took longer than 42 days with the longest taking 148 days. The Commission’s internal target is to process 80% of applications within 10 days and all other applications within 42 days. The Commission expects the online licensing system to further reduce processing time. Before 2014, the Commission could not reliably measure timeliness of processing applications due to limitations in its system.

Read more … Licensing is generally acceptable but there are gaps

  • In 2014-15, the Commission received 927 complaints about building works, an increase of 58% since 2012-13. It received no complaints against surveyors. We noted the frequency of complaints in the first 6 months of 2015-16 was similar to 2014-15. The Commission indicated that the increase reflected a surge in building activity between those years.
    • Nearly 40% related to unregistered building works. These are normally works that can be conducted without involving a registered builder or a building permit.
    • Just above half (50.5%) were about quality of new houses, 24% related to repairs and renovations and 18% involved building completion and finishing services. Most of the rest involved contractual disputes.
  • The Commission generally takes satisfactory action to assess the merit of a complaint and to investigate those that have merit. As well:
    • It has reduced the cost of complaint resolution by limiting the number of cases that it refers to SAT for a decision. It was expected that about half of all cases would be referred to SAT but in 2014-15, just 21% were referred. SAT is a more expensive resolution process.
    • In the last 2 years, the Commission has reduced the average time to close complaints by 46 days to 113 days while closing 58% more complaints. However, 40% are still resolved after their target date of 150 days. Reasons for delays included incomplete information provided by complainants, or multiple complaints against the same builder.
  • The Commission does not ensure that builders are complying with remedial orders or paying fines that arise from complaint investigations, thereby potentially undermining its authority and reducing its effectiveness as a regulator:
    • The Commission does not check that a builder completes a remedial work order unless advised by the complainant that the builder has not done so.
    • The Commission was not seeking payment of fines and costs until we advised them at the beginning of 2016 of the amount of unrecovered monies. In December 2015, the total value of unrecovered monies was $377,121. Our analysis showed that builders owed 89% of these monies.

Read more … Complaint management processes have improved but further improvements are needed

  • The Commission was slow to use the legal authority provided in 2011 to undertake proactive compliance inspections of builders and surveyors, with the first use not happening until 2014 when it began proactive audits. The new powers improve the Commission’s effectiveness as a regulator, and its knowledge about building quality and level of compliance with the Code. To the end of 2015, it had undertaken 2 general audits and 54 occupation-based audits.
    • The first general audit targeted tie downs of timber framed metal roofs in 123 new homes under construction (roof audit)[1]. The Commission found 42% of the homes had quality or compliance issues with their roof tie downs, and concluded poor supervision by builders was a key cause.
    • Shortly after the roof audit, the Commission undertook its second general audit, this time focusing on regional home building. However, the lack of a consistent audit approach by the Commission’s inspectors meant that it was unable to reach firm conclusions about regional home building quality.
    • The first occupational audits focused on builders. To 31 December 2015, it had done 36 of these audits involving 152 site inspections. Termite treatment, drainage work, and wet areas and external waterproofing were the 3 main areas of non- compliance found by these audits.
    • In late 2015 the Commission began occupation audits of surveyors with a review of 27 certificates of design compliance (CDCs) issued by 16 surveyor contractors and 2 LGs on home building plans. Only 7 of the CDCs met the inspection criteria. The main deficiencies were a lack of supporting information and smoke alarm details.
  • The Commission is showing ongoing commitment to its proactive audit program but its supporting processes are not yet mature.
    • The proactive audits commenced before the Commission did a sound, documented risk assessment to help target limited resources at the most serious and likely risks. For instance, inadequate supervision is a potential key industry risk but it was not identified as a risk prior to commencing the roof audit and is still not recognised as a risk to be addressed in future audits.
    • Inspectors lacked experience in doing proactive audits. Their experience solely related to reactive audits to investigate complaints. This gap was highlighted by the variable results found during the general audit of regional home building. In response, the Commission updated its training of inspectors.
    • Improvements are needed to the processes for ensuring builders remedy faults found during audits:
      • The Commission may refer unresolved faults to the relevant LGs, as only they have the power to require builders to remedy faulty work found during inspections. Following the roof audit, the Commission referred 11 matters to relevant LGs. However, the Commission took 8 months to refer 4 of these matters and could not show if it had referred another 2 matters to relevant LGs.
      • The Commission did not follow up matters referred to LGs to check if they were resolved. This meant the Commission did not know if the faulty building work was rectified and if not, whether this was due to some process or communication breakdowns between itself and LGs.

Read more … Builders and surveyors are now monitored but there are still gaps

[1] A copy of General Inspection Report One: A general inspection into metal roof construction in Western Australia is available at https://www.commerce.wa.gov.au/sites/default/files/atoms/files/general_inspection_report_2016.pdf

Page last updated: February 2, 2017

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