On-Site Insight 3-2011

ACT Government policy: the coming of an IR compliance audit

Edition 3-2011 Master Builders Executive Council President – Ross Barrett Treasurer – Simon Butt Chair, Commercial Builders’ Sector Council – Valdis Luks Chair, Suppliers and Subcontractors’ Sector Council – Grace Ferreira Chair, Residential Builders’ Sector Council – David Howarth Chair, Civil Contractors’ Sector Council – David Jones Chair, Professional Consultants’ Sector Council – Hans Sommer Master Builders Management team Executive Director – John Miller Deputy Executive Director – Jerry Howard Director Industrial Relations – Mike Baldwin Senior Management Accountant – Louise MacCallum Senior Manager - Marketing & Membership Services – David Leitch Master Builders Group Training General Manager – Wendy Tengstrom

The ACT government has made an inprinciple policy decision to introduce an industrial relations compliance audit tool for all government funded construction projects. This decision is on the back of the broadly held view within government and its agencies, that there is widespread abuse in the industry of employees and alleged contractors with respect to statutory terms and conditions of employment. The Master Builders Association (MBA) has had several meetings with Procurement Solutions and other parties, with a view to ensuring that the industry’s input to the process was given due consideration and weight.

The introduction of an audit tool is designed to tighten oversight arrangements of contractors on ACT Government capital works projects, with respect to industrial relations compliance. Broad agreement has been reached on the use of an audit tool encompassing the following: a) The need for project managers and sub-contractors, to produce third party audit evidence illustrating compliance with their industrial relations obligations, before a contract will be let; b) Further audits during the life of the project; c) The potential for firms to be precluded from tendering for up to 12 months if found by the regulatory authorities (ABCC, ATO, LSLB etc) to be engaging people in a manner at variance with the law.

It is anticipated that the tool will be in place and operational by 1 October 2011, though the government is giving consideration to bringing it in as early as 1 July 2011.

The Process There are several steps currently proposed:

• Certificate of Assessment Audit Report (pretender stage)

Master Builders Association of the ACT 1 Iron Knob St, Fyshwick ACT 2609 PO Box 1211, Fyshwick ACT 2609 Tel: (02) 6247 2099 Fax: (02) 6249 8374 Email: canberra@mba.org.au Web: www.mba.org.au

Required by the project manager, which includes details on their staff numbers; industrial & common law instruments (hours worked; super; tax deductions; payroll tax); insurance obligations (public liability, workers comp; ACT LSLB); right to work in Australia.

Subject to a successful assessment, a certificate of compliance will be issued

by ACT Government approved Auditors.

This certification is an absolute requirement for any building entity wishing to be engaged on an ACT Government project. Further, there will be a requirement to maintain an IRE Compliance Certificate for the term of the contract and be subject to further audits during the life of the contract.

• Project compliance (Head Contractors, subcontractors, trades) Evidence required includes: 1. Employee details (ACTLSL; Super; industrial instrument; pay slips; time sheets); 2. Details on all sub-contractors; ABN holders.

• Non – compliance If the entity has an adverse finding by the independent auditor during the term of the contract, the Territory may advise the relevant regulatory authorities (ABCC, ATO etc). At this point, a decision would be made by the aforementioned regulators as to whether to prosecute.

Independent of action by the regulator, the entity may then be banned from tendering or being part of a tender for ACT work for a minimum of 12 months.

Conclusion This audit tool is an additional hoop for all employers in the industry to overcome.

It has the potential to drastically change how many in the industry currently employ or engage people, which in turn has the prospect of completely realigning the tender process. Its introduction will result in profound change in our industry and unless project managers and sub-contractors are fully conversant with the process, they run the real risk of not being in a position to undertake government work.

If members wish to discuss this matter further please feel free to call me on 02 61755919.  MIKE BALDWIN - IR DIRECTOR

Government expecting big windfall from Lease Variation Charge Master Builders ACT has called for further negotiations between the ACT Government and industry after the Government flagged in its Budget its intention to press ahead with its Lease Variation Charge plans.

After lengthy consultations and several investigations the Government has said it will implement the LVC in 2011-12, although its plan is contrary to the recommendations of one of its own consultants. The LVC replaces the Change of Use or “betterment’ charge.

Master Builders Association (ACT) Executive Director John Miller described the LVC plans as “The biggest stinger for industry” in what was otherwise a Budget containing “some welcome initiatives.”

He said there was a real danger that the approach taken in dealing with the Lease Variation Charges in the Budget would serve to stifle vital infill activity in the ACT. He believed the industry’s concerns were not insurmountable and that a flexible approach in finding a workable solution, particularly around the Lease Variation Charge, would ultimately be needed.

Revenue from the LVC is forecast to rise from $14.2 million in 2010-11 to $22.4 million in 2011- 12, to $25.6 million in 2012-13, $26.8 million (2013-14), $27.9 million (2014-15).

The transition arrangements provide for a remission (discount from the full rate) of 75 per cent in 201112, decreasing by 10 per cent in each of the next two years, and decreasing by a further 15 per cent in each of the following two years. After four years, the remission rate will be 25 per cent.

“The biggest stinger for industry” The Government will proceed with its plans setting LVCs for each suburb. The Government introduced legislation for the LVG to the ACT Legislative Assembly within days of bringing down the Budget.

Having established the formula for setting the LVC, the Government announced it will remit (discount) the rate by 75 per cent – to 25 per cent of the standard rate – for 2011-12. The discount will be reduced each year with rate reaching 75 per cent of the standard rate in 2015-16.

In its Budget Papers the Government says, “This four year transition period provides a significant subsidy to industry, to assist it adjust to the market values. The Government is providing a remission of approximately $45 million over four years, compared to paying 100 per cent LVC. If the 75 per cent LVC rate is used, the subsidy is estimated at around $8.5 million over four years.”

Despite charging only 25 per cent of the standard rate in 2011-12, the Government expects to collect nearly double the revenue it collected in 2010-11 from the Change of Use Charge: $24.4 million compared to $14.2 million.

In introducing the LVC legislation to the Legislative Assembly (full debate on the legislation is yet to occur), Treasurer Katy Gallagher said the development industry had not been paying full betterment costs for several years. “It is important that the impact of codification is understood clearly. Members would recall that a practice of applying fixed valuations and fees for units, townhouses and dual occupancy developments was identified last year. Clearly, this was not the intent of the legislation. The practice was rectified at the end of April 2010. The rectification of the system reflects considerable increase in the charge. That, however, is even before the codification comes into effect.

Mr Miller said the Government had adopted a “very bullish approach to the implementation of the codified Lease Variation Charge system, formerly known as Change of Use charge. The approach is contrary to the advice of one of their own consultants and further cautions from industry insiders on the potential to dry up activity particularly in areas most appropriate for redevelopment.”

“That increase reflects how much of the windfall gains have not been returned to the community, as envisaged under the original betterment system. The schedule of values under codification are based on the market values and in fact they are averaged over three years to remove any fluctuations. In principle, there should be no or negligible impact from the introduction of codification itself. That is what the expert reports also confirmed.”

The Government has yet to announce its plans after 2015-16.

An artisits impression of the proposed building in Civic.

INDEPENDENT RESEARCH SAYS CO-LOCATED OFFICE IS A WINNER David Dawes, the Chief Executive of the Department of Land and Property Services, has been joined by a panel of industry experts to outline the rigorous independent analysis that was undertaken to develop a new Government Office Building in Civic.

This detailed analysis, conducted over more than three years by a range of specialist private sector consultants, includes an examination of financial, environmental, design, planning, procurement and risk management issues were also released.

“This is biggest capital project undertaken since self-government and it’s fair to say that it has had more scrutiny than any project ever undertaken by the ACT Government and will be the model for future significant ACT projects.

“A Government owned office building will not only be a great asset but will result in savings of more than $34 million every year.

“Everyone understands that owning your own home is far better than paying dead money to a landlord, the ACT Government owning its own building is exactly the same principle.

“Rather than paying property developers rent for something we will never own, we are building a purpose

“This project is much more than a real estate transaction. It’s also about longterm cultural change and changing the way that government does business.”

- David Dawes “Today we released 16 key reports and analysis on the project’s economic, environmental and social credentials. It was on the basis of this comprehensive independent analysis that the Government made its decision to proceed with the project.

“There were five options evaluated and the overwhelming conclusion of this rigorous assessment process was that the construction of a purpose built ACT Government Office Building was by far the best option to deliver the superior environmental, economic and social benefits to the Territory into the foreseeable future.

built, state of the art, environmentally sustainable building that will add value to the Territory’s balance sheet.

“The independent expert research and analysis demonstrates that owning our own Government Office Block is without doubt the best outcome for ACT public servants and for all ACT taxpayers.”

Mr Miller welcomed the comprehensive training initiatives while expressing concern at the singling out of contracting arrangements in the industry.

Mr Miller said that by far the most important and welcome element of the Federal Budget was its commitment to training and what this would ultimately deliver to the Canberra building and construction industry.

“As an organisation which has been historically deeply committed to training and apprenticeships, we are delighted by the $3 billion training package and the degree to which it will mesh with our existing training initiatives in the ACT,” he said.

Mr Miller said the combined effects of the mining boom and recent natural disasters had served to highlight the demand for skilled labour and the need to plan ahead to help overcome skills shortages.

However he said he was deeply concerned about the potential for unintended consequences to flow from the Budget decision to specifically target contractors working in the building and construction industry for increased reporting obligations.

Territory and Federal Budgets a mixed bag for building industry The ACT Budget contained a significant boost in planned Government building and construction in the ACT over the next four years.

Expected construction will fall slightly in 2001-12 compared to 2010-11, however construction from new projects to which the Government committed in this year’s Budget shows a big rise from 2010-11 – and this will flow through to expected higher levels of activity in the next four years (covered by the Budget’s Forward Estimates.)

On the negative side, the Government committed to proceeding with the Lease Variation Charge (discussed elsewhere).

Master Builders ACT gave a “qualified welcome” to the ACT Budget, warning that some welcome initiatives have been offset by revenue measures capable of undermining economic activity.

Executive director John Miller said that while the Budget represented a pragmatic document framed in the context of reducing the ACT’s deficit, at the same time as seeking to maintain economic momentum, he held serious concerns about changes surrounding Lease Variation Charge.

The Federal Budget, delivered a week after the ACT equivalent, was also a mixed bag, with welcome vocational training initiatives and a national boost to infrastructure development and investment offset by a tax crackdown directed specifically at building industry contractors and a lack of new Commonwealth construction in the ACT.

“While we, as an organisation, recognise the Government’s desire to curb the cash economy, the specific attention being directed at our industry is wholly unjustified and smacks of undue influence on the part of the trade union movement,” Mr Miller said.

“There is a real danger that this level of attention can give rise to a range of unintended consequences including specific skills shortages and higher costs,” he said.

The Government expects to collect an extra $513 million over the next four years from the crack-down, which the detailed Budget papers describe as: “The Government will require certain businesses to report annually on payments made to contractors in the building and construction industry, with effect from 1 July 2012. The reporting regime will require businesses to report information that they should already collect under existing tax arrangements.”

Looking at the Budget commitments towards development within the ACT, Mr Miller said he welcomed the announcement that the Commonwealth would provide a gift to the ACT Government to commemorate the Centenary of Canberra in 2013, at a cost of $62.0 million over four years providing for the redevelopment of Constitution Avenue.

“We welcome this commitment and the economic activity it will generate notwithstanding the fact it reflects an earlier land swap which took place between the Territory and the Commonwealth,” he said.

More details of the ACT and Federal Budget changes affecting the building industry and planned projects can be found in the Master Builders Association of the ACT and Federal Budget Briefings on the Master Builders Association (ACT) website at : http://www.mba.org.au/files/view/?id=457 and http://www.mba.org.au/media_room/ mbanews/article?id=49

Australian Building and Construction Commission abolition advanced

NEW $18 Million Gungahlin Community Health Centre

The ACT Government has named Manteena Pty Ltd as the project manager for the $18 million Gungahlin Community Health Centre.

At the same time, the Government has announced plans for a 7,000 square metre office building in Gungahlin to house 500 public servants and a $432 million Civic office building.

Minister for Health, Katy Gallagher announced Manteena as project manager for the construction of the new Gungahlin health facility. She said, “Preliminary design plans for the new Gungahlin Community Health Centre were released in March following two years of planning and consultation with user groups, key stakeholders, staff and the community.

Master Builders Australia has expressed grave concern at the Federal Government’s plan to press ahead with the abolition of the Australian Building and Construction Commission.

“The centre will be an innovative new building constructed adjacent to the existing Child and Family Centre. It will focus on the specific health needs of the Gungahlin community and surrounding areas.”

While there has been no formal announcement, the Government has included legislation abolishing the ABCC in the list of bills it plans to introduce to parliament during the current Budget or winter session.

The new health centre will provide a range of health services for all ages, including counselling, screening, treatment, therapy, community support, education, and group programs.

The Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill will:

Construction on the Gungahlin Community Health Centre is expected to begin in the second half of the second half of 2011 and be completed in the second half of 2012.

•

abolish the Australian Building and Construction Commission (ABCC) and replaces it with the Office of the Fair Work Building Industry Inspectorate

ACT Health will also be building a new enhanced community health centre in Belconnen and extending and refurbishing the existing community health centre in Tuggeranong.

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remove industry-specific regulations, including laws that provide higher penalties for breaches of industrial laws and broader circumstances under which industrial action attracts penalties; and

Community consultation on design plans for all three health centres took place in March and April 2011

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limit the power to compulsorily obtain information or documents

The Master Builders Association has called on the Government to drop the Bill.

The ACT Budget contained $150,000 for a study of the estimated cost and design of a planned ACT Government Office Building in the Gungahlin Town Centre.

Expressions of Interest for the building’s construction are expected to be called later this year.

Wilhelm Harnisch, CEO of Master Builders said, “If the legislation is a mirror of what was previously proposed, then Master Builders will fight its passage.

Chief Minister Jon Stanhope said, “The ACT Government will establish a presence in Gungahlin by moving 500 public servants to a new Government office block that will be built in the region’s town centre.”

“The previously proposed replacement of the ABCC with a toothless tiger is not an option and not a mandated outcome.

The 7,000sqm office complex is expected to house 500 public servants and include on-site parking.

“Unlawful behaviour should not and must not be a feature of the industry’s operations.

The Budget also provided $432 million over four years for the construction of a new ACT Government Office Building on Section 19 – City, adjacent to the ACT Legislative Assembly.

“Unfortunately this is the sort of behaviour returning to the industry in the face of a tough watchdog and things can only get worse without a strong regulator. The recent experiences with unions taking the law into their own hands by closing sites where allegations of sham contracting are made is the sort of problem that this industry faces. Unions are acting as if they administered the law, when the ABCC is currently empowered to examine any allegations of sham contracting and is conducting an inquiry.”

It is to house over 3,500 public servants and provide a central and integrated shopfront, which will make accessing government services easier for the community, the Government said.

Construction is forecast to commence in 2014. The cost of the building is to be partly offset by the sale of existing owned Government buildings valued at $99.6 million.

Government construction performance improving The ACT Government’s 2010-11 Capital Works Program December 2010 Quarterly Progress Report shows the ACT Government is completing a higher proportion of planned construction compared to last year, despite a significantly larger Capital Works Budget than the previous year.

“Construction continues on the 146 bed Women’s and Children’s Hospital, while site establishment and documentation is being finalised on the Adult Mental Health Inpatient Facility which will provide for the construction of a 40 bed facility at the Canberra Hospital.”

Treasurer Katy Gallagher said the Progress Report showed “continued high levels of achievement, with significant projects delivered across health, education and housing, as well as upgrades to roads, parks and community facilities.

“Gungahlin College was largely complete and later opened to its first students at the beginning of the 2011 school year, while the Building the Education Revolution (BER) program is progressing ahead of schedule.

“continued high levels of achievement, with significant projects delivered across health, education and housing, as well as upgrades to roads, parks and community facilities”.

- Katy Gallagher - ACT Chief Minister “The expenditure outcome for the December quarter was $138.169 million, bringing the year to date expenditure to $273.622 million – 34 per cent of our total funds available for 2010-11. By comparison, the year-to-date expenditure for the same period last year was $180.280million - or 23 per cent.”

The latest Access Economics Investment Report also found public sector projects are dominating ACT investment with several major engineering projects driving spending.

Office building has ground to a stop, with Canberra’s office vacancy rates the highest in the nation.

The major projects include the $350 million private sector upgrade to the airport and a $360 million extension of Cotter Dam. Gungahlin Drive duplication is also driving investment.

Non-residential construction includes the new ASIO headquarters and work on the precinct near the Australian National University.

Ms Gallagher said, “Significant work continues on the development of Canberra’s hospitals and healthcare facilities to better serve a growing population. Seven levels of the new 24 hour multi-storey car park at the Canberra Hospital became operational in December 2010 with a total of 1531 car and 28 motor bike parking spaces. Level 8 is due for completion in June this year.

“The ACT was the first jurisdiction to complete all National School Pride (NSP) projects, with 84projects at 82 public schools completed by March 2010. In the December 2010 quarter, 59 of 68 Primary School projects under the 21st Century (P21) Program had been completed, including a new science building at Florey Primary School and a new library at Chapman Primary School.

“12 social housing dwellings in Curtin and three in O’Connor were handed over as part of the Stage 2 $76 million Nation Building and Jobs Plan - Social Housing project.

Stage 1 provided 57 new dwellings across the Territory by September 2010 and Stage 2 will provide a further 294.

“Infrastructure projects progressed to facilitate further land releases, and preliminary planning, approvals, consultation, procurement, tendering and construction activities were undertaken during the December quarter, including the sale of one multi-development site in Franklin and two in the new Molonglo suburb of Wright,” she said.

Dickson Master Plan finalised “It certainly creates the right environment for developers. At the moment there’s no incentive for developers to come into these areas unlike the areas immediately around them”.

- ACTPLA CEO Neil Savery

Image courtesy of abc.net.au.

The ACT Government has approved the finalised Dickson Centre Master Plan, permitting developments of up to six storeys in the Woolley street area and up to three stories in the area close to the Dickson retail centre.

It proposes the extension of Cape Street through to Northbourne Avenue and a large retail anchor on Dickson Place.

ACTPLA has published the Master Plan ahead of a period of public comment on draft changes to the Territory Plan until June.

One of the Government’s first priorities will be selling the existing car park between the library and Baptist Memorial Church to a supermarket operator, as part of the Government’s supermarket strategy.

Maximum building heights will increase from two to three storeys in parts of Lyneham, Dickson and Turner.

ACTPLA said the car-park site will be sold to a non-major supermarket operator before the end of the year.

The changes were recommended by a Legislative Assembly planning committee, to increase housing supply close to Dickson shops and Northbourne Avenue.

‘’One of the objectives through the planning process was to identify suitable locations for supermarkets,’’ Mr Savery said. ‘’Increasing competition was a very deliberate exercise.’’

ACTPLA said the proposal also includes increasing the plot ratio from 65 to 80 per cent, giving developers more options around the use of space on residential block.

ACTPLA CEO Neil Savery said,” It certainly creates the right environment for developers. At the moment there’s no incentive for developers to come into these areas unlike the areas immediately around them.”

The Master Plan provides for a new supermarket, a town park, a multicultural shopping and food precinct and underground parking.

He said basement parking beneath the supermarket would accommodate an increase in shopper numbers.

The master plan follows extensive consultation with the community.

Quality of Building Work and Water Ingress are inherently related The Building Quality Forum will be recalled on the 5th July and there will now be a new Minister responsible for this Forum. Minister Simon Corbell has made his intentions very clear by stating: “As the responsible Minister I am keen to maintain the government’s focus on improving building quality and will be Chairing the Building Quality Forum.”

There is no doubt that one of the dominant issues affecting the quality of building work is water ingress; whether it be through external balconies or through the building fabric. The damage caused by water ingress can be very significant, both in remedial costs and the disruption it causes for the occupants. These issues equally apply to stand-alone residential buildings and multi-unit construction. I attended the 100-year anniversary of Kell & Rigby and it was interesting to hear generations of builders talk about the continuing problem of water ingress and how we still struggle to deal with preventing water from entering buildings.

The major emphasis of course in the Building Quality Forum referred to issues associated with multi-unit construction and, in particular, failure of waterproofing over habitable areas.

I personally find it extraordinary, given the technology that is available to us and the vast array of materials,

one has to wonder why we can’t, collectively, get it right.

When one examines input costs to getting it right in the first place, as opposed to the remedial costs and the damage to reputation and credibility, there is simply no justification for not getting it right in the first place.

In this Onsite Insight edition we have included editorial that outlines problems where the primary issue has been water ingress through the external cladding and poor detailing and poor building practices that have contributed to major deterioration of the building fabric, resulting in expensive remedial costs.

Following recent site inspections and data received from the Unit Owners Corporation, I will again list the common issues that constantly arise with water ingress:

Improper design and detailing When one reviews architectural drawings, it is often noticed that obvious and easy details are shown, but difficult and critical details are not shown. Water leakage into the inside living areas from balconies is a common complaint to building authorities and to building industry organisations. The intention of this editorial is to highlight this increasing problem to design and construction professionals and draw their attention to design and detailing of this aspect in the architectural drawings.

This photo shows an exposed balcony with a habitable area underneath.

The interface between the balcony and interior of a building rarely receives the proper attention to waterproofing.

Poorly detailed and constructed balconies present water leakage problems to building and homeowners.

Once the adequate freeboard is estimated, allowing for any topping or tiling thickness, it should clearly be detailed on the drawing. The drawings should also show the drainage provisions, direction of fall and grade.

What is considered to be a trivial detail becomes a prolonged and difficult to solve water leakage and interior damage issues for the owners.

In a number of multi-storey multi-unit buildings, water penetration problems were observed where water penetration from an external balcony penetrated into living areas below. These problems are mainly attributed to not providing sufficient freeboard by turning up the waterproof membrane far enough up the face, or inside the wall cladding, to contain and drain the water. In many cases, subsequent topping of the balcony slab or tiling has substantially reduced the freeboard and in some cases no freeboard was provided; that is, the water containment level outside was higher than the finished floor level of the residence internally. A recipe for disaster!

Selecting the correct waterproofing material for the particular application is also critical; as is the selection of the skilled operator to apply the waterproofing i.e. you don’t ask your Year 1 apprentice to do the waterproofing with absolutely no instruction whatsoever! This is a critical aspect of the work. I would say one of the most critical elements, yet it is the one area that is given the least amount of attention. You must ensure that the membrane or the selected waterproofing system is suitable for it’s intended purpose and that the manufacturer’s specifications are strictly adhered to.

Too often reliance is placed on the use of adhesive sealants, membranes and special coatings for effective waterproofing of joints without adequate consideration being given for construction and maintenance during the effective life of the building. Sealants do fail and have a limited life; much shorter than the expected life of a building.

In addressing the above issues, where do we start?

Who is responsible for the design?

The responsibility for detailing must be with the architectural designer of the building. These details must then be reflected in the structural engineering drawing details – in particular with concrete construction – so that the formwork contractor can prepare the formwork to include weather- proofing details such as step- downs (Freeboard) to interfacing internal and external structural elements.

Builders’ should insist on these details on the working drawings and construct accordingly. If no details are given on drawings and construction decisions are made on the run, then very likely the builder and the building certifier may be held responsible for the design as well as for the rectification of subsequent water leakage problems into the building.

Detailing and historically good building practice The step down to finished concrete or sub-strate level of the balcony should be at least 100mm, allowing for a tile bed. This will depend on conditions such as: •

Drainage provision and its effectiveness

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Extreme weather conditions expected on the balcony

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Wind-driven water penetration

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Capillary suction potential of the cladding material used

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Area of the balcony and the level of protection over the balcony.

A cross-section detail showing the internal living area and external balcony should provide clear waterproofing method with adequate freeboard to the internal floor area. The waterproofing membrane or flashing should extend higher than the door threshold within the surrounding external walls.

What are we doing at Master Builders to address this issue?

Following issues raised through the Quality of Building Forum, the Master Builders have been working in partnership with the Australian Institute of Waterproofing in finalising training; dealing specifically with internal and external waterproofing. We will also be offering a Certificate III in Construction Waterproofing (CPC31408). The course registration details will be included with this publication.

The training courses will be preceded with an Information Session on Thursday 23rd June between 5:00pm and 6:00pm. The information session will address the course structure and elements to be covered in the course, including recognition of current skills by individuals interested in obtaining the qualification. It is also likely that licensing of waterproofing operatives will be given serious consideration in the ACT following final recommendations from the Minister. The waterproofing training courses will be conducted from the 18-22 July.

Conclusion The intention of this editorial is to bring this waterproofing issue to the attention of the design profession, to the builders and to the building certifiers, so that each party can take the necessary steps to address the detailing and construction of balconies, decks and other external wall fixtures, such as windows and prevent the water from entering the interior of the building.

It is far better to spend some valuable time preparing a proper specification including the selection of the proper waterproofing system which will, in the long-term, save the builders from expensive remedial work and building owners from expensive building maintenance in the future.



Jerry Howard Deputy Executive Director

ACT’s LEAKY BUILDING SYNDROME Since the introduction of non traditional wall cladding systems a number of years ago they have now become a common feature in some buildings today. They offer numerous benefits however if used incorrectly they also cause a number of pitfalls which have been documented by the New Zealand Government when they were dealing with their ‘Leaky Building Syndrome’.

I am not suggesting there is a ‘Leaky Building Syndrome’ in the ACT however we have dealt with some building projects recently where the cladding system has failed, prompting this article. The issues have occurred as a result of water entering the building fabric, which causes major problems for projects constructed from kiln dried timber frames.

The consequences of trapped water are timber decay resulting in reduced structural integrity of the building and serious health risks for occupants due to fungal growth.

Recently we became aware of water ingress issues of a residence that is only five years old. The factors associated with the cause of this issue were noted as: 1. The lack of appropriate installation detailing of products specified by the designer.

2. Incorrect installation/use of the products.

3. Poor building practice.

Specified products: The external material of this building comprises a range of products including masonry and some non traditional cladding systems resulting in a non conventional build for the Builder. The working drawings contained no details as to how the Builder should address junctions between different materials.

Incorrect installation of products: Whilst there was a lack of direction by way of correct detailing of the specified products on this particular job the products were also not installed to manufacturers’ specification.

Water has entered through cracks in the applied finish to the top of the balustrade wall on the upstairs balcony (which is effectively a parapet wall). The resultant damage to the supporting timber frame and water ingress to the building could have been avoided if a metal capping had been fitted to the top of the balustrade wall as per the manufactures specification.

The window sill detail was also not in accordance with manufacturers’ specification and was level allowing an area for water to pool and enter around the window frame. Metal corner beads were installed instead of plastic corner beads as specified by the manufacturer.

Poor building practice: This is the largest factor of the failure.

The intended balustrade appearance was that of a rendered masonry parapet wall yet the protection of a

masonry parapet under part 3.3.4 of the Building Code of Australia was not applied in this process. Water ingress to habitable areas and extensive damage to the timber framing of the balustrade wall would have been avoided if basic building practices were applied a metal capping was installed to the top it.

The top of the external tile bed on the ground floor was above the waterproofing membrane with sheet metal wall cladding concealed in the tile bed, supposedly to prevent water ingress to the external timber wall (Figure 1). Not surprisingly moisture entered the bottom plates and was accelerated once the sheet metal rusted. The timber bottom plates of the external wall were also concealed below the tile bed which was effectively a dam. The tile bed should have been on a concrete plinth with a higher finished level than that of the adjacent balcony tile bed. Figure 2 details an alternative method that would have protected the timber frame.

The damage caused is an unfortunate and costly outcome as a result of the materials being used for appearance rather than functionality. To avoid similar outcomes in the future it is advisable that builders address the following matters relating to the application and installation of specified cladding systems and obtain correct detailing before construction commences.

Some points to consider might be: 1. Are the manufacturer’s specifications in relation to application, fixing and performance suitable for the project?

2. Is the product suitable to withstand local wind loadings and weather conditions in order to avoid unnecessary cracking ?

3. Where and how often should expansion joints be placed?

4. How will detailing around box gutters, parapets, windows and other penetrations be flashed or waterproofed?

5. How to prevent water ponding on the building fabric surface i.e. Parapet walls, window and door sills, balcony surfaces to wall junctions etc, to reduce the chance of water entering the building fabric through joints or cracks in applied finishes.

6. How to provide appropriate drainage or ventilation of moisture between the supporting structure and cladding system to deal with trapped moisture from condensation or water ingress through applied finishes.

1

As previously mentioned in this publication designers and or clients generally specify the use of cladding and other materials based on achieving their desired appearance of the building. However the client should be made aware that an aesthetically pleasing building doesn’t remain so for long if proven building practices are ignored and specified materials are not used to achieve functionality as well.

Whilst the ACT building industry will continue to operate and new materials will enter the market please be mindful of Performance Requirements that need to be achieved for class 1 buildings in volume two of the National Construction Code. Under current ACT legislation the licensed builder is liable to rectify defective building work and resultant damage regardless of which materials are specified for use.

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SISILATION

SHEET METAL CLADDING

TILE

FFL

FALL TILE BED

Figure 1

DPC

RC SLAB WATER PROOFING MEMBRANE

This illustration shows the actual construction practice adapted on-site. The concrete balcony stepdown was incorrectly located. The builder layed the timber bottom plates on the lower level of the balcony. These plates became immersed in the tile spread screed and subsequently decayed. The metal cladding was also immersed in the tile bed and subsequently rusted.

3

SISILATION

SHEET METAL CLADDING

FLASHING

FALL

TILE

FFL DPC WATER PROOFING MEMBRANE

TILE BED

RC SLAB

Figure 2

This illustration shows an example of how it should be done. Top of tile finishing below finished floor level. Waterproof membrane extending to the top of the concrete slab. Proper flashing installed at the base of the metal cladding.

Photos. Top to Bottom.

1.

Point of entry of moisture.

2.

And to think a metal capping could have prevented this outcome

3.

The effect of trapped moisture

4.

Failed balcony detail with bottom plate concealed in the bed

4

Coming events for 2011 Master Builders & Boral Excellence in Building Awards

Date: Friday 24 June Where: National Convention Centre Canberra The Master Builders & Boral Excellence in Building Awards are largely regarded as the premier awards and networking event for the building and construction industry throughout Canberra and the surrounding region.

The Awards recognise outstanding projects from our region’s residential builders, commercial builders, civil contractors, architects, designers, sub contractors, suppliers and associated professionals.

CCF Earth Awards

Date: September 1 2011 Where: National Gallery, Gandel Hall The Earth Awards have the specific aim of recognising outstanding work in construction and environmental excellence which reflects development and use of the best technologies and practices by Australian civil contractors. In their 18th year, the Earth Awards are the most prestigious awards in civil infrastructure including; roads, bridges, railways, marine structures and utilities that are the economic veins and arteries that link the Australian community.

For more detailed information visit: www.civilcontractors.com/earthawards

Training Dates for June 2011 Traffic Controller course

Date: June 6 (Contact Norma Inglis at ninglis@mba.org.au to book your place)

OCCUPATIONAL HEALTH & SAFETY RISK MANAGEMENT FOR MANAGERS & SUPERVISORS

Date: June 16 (Contact Norma Inglis at ninglis@mba.org.au to book your place)

The Traffic Controller course conducted by Coates Training utilises the New South Wales Roads & Traffic Authority Package. The course is designed to qualify participants as a Traffic Controller and should be attended by personnel required to control traffic using a Stop/Slow bat and the legislative requirement of work based health and safety induction training.

Master Builders, in association with the ACT Work Safety Commissioner, has developed an extensive, practical and fully accredited program to train Work Safety Representatives for the building industry in compliance with the Act (2008).

Waterproofing Course Date: 23 June 5:00pm - 6:00pm at Master Builders Skill Centre, Fyshwick Information Session Master Builders Group Training in partnership with the Australian Institute of Waterproofing are offering existing workers, with relevant industry experience, an opportunity to gain nationally recognised qualification in waterproofing and meet licensing requirements to carry out waterproofing in NSW. There are limited places so book early to avoid dissapointment.

ACT Private Sector Building Activity $150

MILLION

$120 $90 $60 $30 $0

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

The above graph and table below summarise private sector building activity for the various building sectors in the ACT over the past 12 months. // To Insert New Data Goto Object/Graph/Data The values for each month are depicted in millions of dollars.

• Copy and Paste Pivot Table Data into Data Additions and Alterations (Residential) Commercial Building Work Garages, Pools, Decks and Similar Structures Multi Unit New Housing

May-10 Jun-10 10.85 8.55 21.09 53.29 2.75 8.52 3.05 44.86 23.55 55.60

Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 5.01 1.51 14.37 1.5 0.7 0.95 0.345 5.7 17.3 14.87 119.43 41.78 39.91 17.82 130.32 131.16 20.42 12.5 22.50 41.42 2.18 3.48 11.49 35.74 10.08 11.27 3.96 4.7 7.16 5.14 21.88 30.84 95.7 31.46 78.4 148.8 5.92 50.4 53.62 54.66 27.54 13.83 9.31 7.3 13.53 7.3 6.02 15.2 19.05 12.82