MARCH 2015
NEW FACES, BROAD EXPERIENCE AT MITRE 10 MEGA ROTORUA NEW BUILDING LAWS SIMPLIFIED SKILLS MAINTENANCE CHANGES ON THE WAY STAY TIDY AND SAFE ON SITE REDUCING WASTE MAKES SENSE
SEE INSIDE FOR CHANCES TO WIN GREAT PRODUCTS Offers open to account holders only Call 0800 M10 TRADE to find out more All prices and offers in this publication are valid from Sunday March 1 – Tuesday March 31 2015 from participating stores.
FOREWORD Staying ahead of change Keeping on top of regulatory changes and requirements can often be one of the biggest challenges for a business owner working in the building and construction industry. Over the past seven years – since the introduction of the Licensed Building Practitioner scheme – builders have been required to keep on top of more paperwork and keep up-to-date with more requirements than they ever had to previously. However, across the board, I think it’s generally accepted that the changes have been a good thing and have driven the industry to be more responsible for itself, which only serves to lift the benchmark we all need to meet. The latest changes – part of measures designed to protect the consumer – came into force on January 1 and have now been in place for a couple of months, which has given everyone some time to try and work through them. In this issue, we’ve broken those requirements down into a easy-touse flowchart, so you can easily work through the steps of the new requirements systematically. We’ve also included an article on changes to the way you need to obtain your Skills Maintenance Points in order to retain your building license. The more detailed information we can bring you in order to run your business, the more efficiently we can help your business run, and if your business is running efficiently and effectively, then we know you’re working productively and positively, which has fabulous benefits for you, and for your customers.
Andrew Cochrane, General Manager Trade Mitre 10 (New Zealand) Ltd
CONTENTS 2
FEATURE – MEGA ROTORUA
With a host of new – but experienced - staff, Mitre 10 MEGA Rotorua is quickly making a name for itself as a top trade merchant.
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BUILDING LAW CHANGES
Changes to building laws, implemented at the start of this year, are designed with consumer protection in mind. Our flow chart guides you through the new regulations.
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LBP
Skills Maintenance changes
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Skills Maintenance requirement for LBPs are set to change later this year, to a mix of compulsory and elective activities.
LEGAL – MEREDITH CONNELL
The majority of resource consents contain a general condition, requiring them to be implemented in accordance with a range of information.
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BRANZ
Cavity battens
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BRANZ
Stud substitution
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SAFETY
Site Safe NZ
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Cover: Trade Manager at Mitre 10 MEGA Rotorua, Peter Breen (right) with customer Scott Morrow (left).
Volume 8, Issue 9 March 2015 Mitre 10 In Trade magazine is published 12 times a year in association with Mitre 10.
Managing Editor
Scott Wilson Phone: 021 725 061 Email: editor@M10magazine.co.nz
Contributors As with all timber uses, it’s important to select the right treatment for cavity battens.
There are rules around substituting studs with different sizes, but it appears some people are finding these confusing. The team at BRANZ clarifies the issue.
A tidy worksite’s a safe worksite and, although cleaning isn’t everybody’s favourite job, it’s necessary to prevent worksite injuries.
BUSINESS – RIGHTWAY LTD
Cashflow is the lifeblood of any business and business owners should regularly be considering ways to improve their cashflow.
WASTE MANAGEMENT
Cutting down waste not only cuts costs for builders – it also reduces environment impact and can help projects meet targets for sustainability.
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TRADES COACH
Marketing your business
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THE BACK PAGE
Around the Stores Stuff to win, points to earn. Don’t miss the back page.
Proactively promoting your business can safeguard against a confusing and difficult workflow further down the track says Trades Coach Andy Burrows.
Adrienne Jervis Nick Whittington – Meredith Connell BRANZ Site Safe NZ MBIE RightWay Ltd Andy Burrows – Trades Coach NZGBC
Printer
Nicholson Print Solutions
Enquiries
ReFocus Media Ltd P O Box 21081 Flagstaff Hamilton 3256 Email: Info@refocusmedia.co.nz Refocus Media Ltd reserves the right to accept or reject all editorial or advertising material. No part of In Trade magazine may be published without the express permission of the publisher. All rights reserved. Opinions expressed in In Trade magazine are not necessarily those of Mitre 10 or the publisher. No responsibility is accepted for the suggestions of the contributors or conclusions that may be drawn from them. Although the publisher has made every effort to ensure accuracy, the reader remains responsible for the correct use and selection of any tools, materials and systems followed, as well as the following of any laws or codes that may apply.
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PROFILE
Mitre 10 MEGA Rotorua: New faces bring trade experience There may be some unfamiliar faces at Mitre 10 MEGA Rotorua, but they bring a wealth of experience and knowledge to their respective roles, making the store the best trade merchant in town. Late last year when Andrew Lancaster was offered the General Manager’s role at Mitre 10 MEGA Rotorua, he jumped at the chance. Although the town and the store were smaller than Albany where he’d worked as Mitre 10 MEGA’s Inventory Manager, the job was a big lure, as were the Rotorua lakes and lifestyle which suit him down to the ground as the qualified chartered accountant is a great outdoor sportsman. An Auckland westie who grew up in Muriwai near the beach, Andrew became a nipper surf lifesaver from a young age thanks to parents who wanted him to be confident in and around the water. Surf lifesaving has been a passion ever since. Andrew served on the Board of Directors for Surf Lifesaving NZ 2
and spent 16 years as a lifeguard. Keen to raise the profile of the organisation he circumnavigated New Zealand in rescue boats in 2010. He’s also excelled at rugby and played the sport at a high level. His most recent challenge was the Speights Coast to Coast multi-sport event. Famed as the ultimate challenge, the championship race not only requires good fitness and skills, but great mental fortitude. Rotorua proved an awesome place to train, with its lakes for kayaking and forests for running and biking. Training took 15-20 hours out of Andrew’s week, leaving little down-time, especially given the demands of his new role at the local Mitre 10 MEGA store. He’s pleased to be now catching up some sleep. The General Manager’s position is a very broad one which has involved Andrew taking over all the store’s operations, right down to managing the cafe. Getting into business operations is something he’s long desired. “It allows me to be more hands-on and practical, as well as still use my accounting skills and knowledge. It’s been the next step up for me,” Andrew says.
PROFILE “We strive to provide the best customer service, to get products that suit our customers’ needs, and ensure they’re on time. That’s our focus,” he explains The business has a very strong team focus and Andrew’s goal is for Mitre 10 MEGA Rotorua to become the strongest home improvement store in the city. “We strive to provide the best customer service, to get products that suit our customers’ needs, and ensure they’re on time. That’s our focus,” he explains He’s confident that the store has the right team on board. “They’re engaged and they’re focused, and they have lots of experience, including many years of work with Mitre 10 and other businesses.” He adds that their experience is complemented by regular training. “The store is only two years old,” says Andrew. “It has the perfect structure and layout, all the products we need, and room to operate. Our team on the floor is highly experienced in all areas; flooring, kitchen, bathrooms, and trade operations.” The store provides the complete Mitre 10 MEGA offer. It’s in a handy, central location, with a good carpark and big drive thru. Mitre 10 MEGA Rotorua has the expertise and products to grow the Trade business. A huge advantage is having Peter Breen at the helm of the Trade team. With decades in the local industry, Peter’s experience and knowledge are priceless. An automotive electrician by trade, Peter completed his apprenticeship with the NZ Army where he served for 12 years. He did a two-year tour of duty to Singapore/Malaysia and was seconded to the old DSIR (Department of Scientific and Industrial Research), spending a summer at Scott Base. Clever with his hands, Peter has built fire engines and portable sawmills and, just to mix it up, worked for the IHC for around three years as a residential manager. Recently joining Mitre 10 MEGA Rotorua as Trade Manager, Peter brought with him 19 years experience in the trade market in and around Rotorua. He has a Bachelor in Applied Management, with a business major. His strengths include leadership and organisational skills, along with the desire to help people be the best they can in whatever role they are in or aspire to. His trade focus is to become the local market leader.
“We have a fantastic new store with a great range, and a great bunch of people selling it,” he says. He said the global financial crisis had had a serious affect on Rotorua and that recovery has really only started in the last 12 months. The grandfather of three loves overseas travel and has many places to tick off his list, including Japan this year. And, as a new venturer into the world of motorhomes, he’s hoping to get more fishing and surf time in around the country’s beautiful coastal regions. Peter serves on the local advisory committee for the School of Business and for the Trades School at Waiariki Institute of Technology. His longevity in Rotorua’s building industry means he’s built numerous relationships with local tradies and has been influential in winning them over to the Mitre 10 brand. Scott Morrow of Morrow Builders Ltd said he decided to give Mitre 10 a go when his building supplies store closed last October. He already had a well developed relationship with Peter and sales rep Mark Coulson, who both joined Mitre 10 MEGA Rotorua after the closure. Mark was instrumental in bringing him over to the brand. “They are good people to work with,” says Scott, whose been in the building trade for 22 years and running his own business for half that time. His team of six professionals service the greater Rotorua region, specialising in new homes, design and build, additions and alterations, insurance, light commercial work and earthquake strengthening. The majority of work is generated through word of mouth and repeat business, and is a vital reason why the company needs to work with a good building supplies team. Service and product in stock are essential to Morrow Builders. “The Mitre 10 MEGA store is great, with plenty of product and selection” says Scott, who is currently building his own home. “Mark has the ability to think outside the square and he’ll do his darndest to source product if it’s not readily available.” “So far, so good!”
Mitre 10 MEGA Rotorua General Manager Andrew Lancaster after completing the Coast to Coast 3
S E G N A H C W A L G IN D IL BU The Building Laws have changed; Your guide to the new rules Under building law changes introduced from 1 January 2015, new consumer protection measures are now in place. These are designed to create a strong, professional relationship between contractors and clients, which will also allow homeowners to make informed decisions about the contractors they are dealing with. These measures – part of the Building Amendment Act 2013 – are the result of a comprehensive review into the Building Act 2004 and have now been in place for two months. The purpose of this article is to look at the new requirements, how they work and how you should navigate them as part of your business. Whilst the rules themselves are relatively simple and are comprehensively laid out in the contractors version of the consumer protection measures booklet, available from the Ministry of Business Innovation and Employment (www.doyourhomework.co.nz) and from some Mitre 10 stores, we have also summarized the details and created a flowchart to guide you through the new requirements.
BEFORE BUILDING WORKS STARTS If the building work will cost $30,000 (incl. GST) or more, or if they ask for this, you must give clients a copy of the prescribed checklist (available from the MBIE website www.doyourhomework.co.nz - and also the Mitre 10 Trade website www.mitre10.co.nz/trade). The checklist may not be modified in any way, such as adding a company logo. You can be fined $500 for not supplying the homeowner with a checklist if required to.
As part of the quoting process, you must also provide a disclosure statement to the client if the building work will cost $30,000 or more (incl. GST), or if they ask for this (template available from the MBIE website www.doyourhomework.co.nz - and also the Mitre 10 Trade website - www.mitre10.co.nz/trade). This includes information about your building skills, qualifications, licensing status, as well as the details of the lead person onsite, their qualifications and contact details. It also includes information on any guarantees and/or warranties you provide and any limits or exclusions relating to them. You can be fined $500 for not supplying the homeowner with a disclosure statement if required to, and up to $20,000 if convicted for supplying false or misleading information. Type of policy:
[specify: eg, contract works, professional indemnity, public liability]
Amount of
Prescribed disclosure information Section 362D, Building Act 2004
Step 3 - Hire
PRESCRIBED CHECKLIST About this checklist A building contractor is required to provide you with this checklist and other prescribed information under the Building Act 2004 before you sign a contract for the building work if (a) you request this checklist and the prescribed disclosure information; or (b) the building work is going to cost $30,000 or more (including GST). The building contractor is the person or company you have asked to do building work for you. The building contractor may not be an actual builder. The building contractor could be a plumber, an electrician, or any other tradesperson who is doing some building work for you and whom you are dealing with directly. Steps (See notes below) 1
Become informed
2
Agree on project structure and management
3
Hire competent building contractors
4
Agree on price and payments
5
Have a written contract
6
Take control
7
Resolving disputes
Completed (Tick when completed)
Notes Step 1 – Become informed All building work must comply with the provisions of the Building Act 2004. You can find a copy of the Building Act 2004 on the New Zealand Legislation website: www.legislation.govt.nz Building work is any work done in relation to the construction or alteration of a building. This includes any work done on your home or other structure, such as a garage, retaining walls, and fences. It also includes work like painting, decorating, and landscaping if it is part of the construction or alteration of a building. However, if the only work you are getting done is redecorating and there is no construction or alteration work involved, it is not building work. If landscaping work does not include any structures (eg, pergolas or retaining walls), it is also not building work. All building work requires a building consent unless it is exempt under the Building Act 2004. Generally, only simple or low-risk work is exempt from the requirement to have a building consent. Certain gas and electrical work is also exempt. For more information, go to www.mbie.govt.nz Building work that is significant or of higher risk (such as structural alterations) requires a building consent and must be carried out or supervised by a licensed building practitioner. For more information on these requirements, go to www.mbie.govt.nz
Step 2 – Agree on project structure and management Building projects do not run themselves. Decide how you want to manage the building project. A few different roles are needed on a building project. You need someone to -
4
•
manage timelines and costs:
•
manage subcontractors:
•
liaise with the local council:
•
make decisions about the design of the work.
You can do some of this yourself, but if you are not knowledgeable about the building work process, you should get help from an architect, an independent project manager, a building company, or a licensed building practitioner who is licensed to co-ordinate the building work involved. You should be really clear about the scope and size of the project and get detailed plans up front. Be clear with your building contractor about who is doing the building work and who is responsible for making design and change decisions during the project.
competent
building contr Ensure that your buildin actors g contractor You should has the skills and resourc es to carry • ask around out the project about the buildin . g contractor • find out and get referen if the buildin g contrac ces for other about license work that the d building practititor is a licensed buildin building contrac g practitioner • determ oners, go to tor has done: ine whethe or has other www.mbie.gov r the buildin appropriate t.nz • ask about g contractor qualifications. has sufficie the buildin For more informa g contractor’s nt insurance • if the buildin tion to cover the employees g contractor work while and what subcon it is being carried is a compan raises concern tractors the y, look up its s, ask the buildin out: building contrac company records g contractor tor will use on the Compa to explain. on the project Step 4– Agree nies Office’s : Internet site. on price and If your search The contrac payments t should clearly The lowest state what paymen price is not ts are require always the You should d and when. best price. Where possibl e, a fixed price • get detailed is preferable. quotes (not estimates) • when compar for the buildin ing quotes g work: , ensure that are the same the scope of across quotes the buildin so that you • make sure g work and are “compa you have the the materia ring apples funds to pay ls and fixtures agreed with with apples” for the project the buildin that you are : g contractor: comparing before the • think careful work begins ly before agreein and that you that have been g to pay more understand the paymen supplied at than the cost the time you t terms make the paymenof the work that has Step 5 - Have been comple t. ted and the a written costs of any contract You should materials have a written contract. The • a descrip contract should tion of the include items building work: • the start such as and comple tion dates • how variatio for the buildin g work: ns to the buildin g work will • the paymen be agreed: t process, includin • the dispute g dates or stages for resolution payment and processes You should how paymen to be followe obtain legal ts will be invoice d. advice to ensure all legal require d, made and that you unders ments. receipted: tand your rights Note: The Buildin and obligat ions and that or more (includi g Act 2004 requires that the contrac t complies must be include ng GST), and the Buildin there must be a written with g (Residential contract for Act 2004 and d in every contract for residential Consumer building work Rights and residential the Remedies) building work with a value www.legislatio Building (Residential Regulations with a value of $30,000 Consumer n.govt.nz 2014 prescrib Rights and of $30,000 e matters that Remedies) or more. You Regulations can find a copy Step 6 - Take 2014 on the of the Buildin New Zealand control g Legislation All residential website: building work as workmanship is covered by implied and buildin warranties g work being You should prescribed fit for purpos by the Buildin e. For more g Act 2004 information, • make sure that addres go to www.m there s matters such bie.govt.nz any other personis a clear line of commu nication with contact person who has authority to the speak on behalf building contractor ” in the prescrib through the of the buildin • when you ed disclosure site forema g contractor. are making information n, the project decisions along (This person that the buildin If you do decide should be identifi manager, or the way, be g contractor to make a change clear as to has provide ed as the “key , keep track whether those d along with of the effect Step 7 - Resol this checklis of that change decisions will affect t): ving dispu your contrac . t and costs. tes It is in both your with any dispute interests and the buildin g contractor’s s as they arise. interests to If you have keep the buildin concerns about g project running as possible. the buildin g project, raise smoothly and them with to deal Raise your the building contrac concerns in good tor (or the options, go key contact to www.mbie.govfaith and use the dispute person) as resolution t.nz soon If you have processes received an agreed to in invoice that your contrac If you fail to you have concern t. For informa make s about, clearly tion on your chance to explain a payment when it outline your is due, the why you have concerns to not paid. (Simplybuilding contractor might the buildin g contractor start dispute withholding Further inform in writing. resolut payment when ation there is a dispute ion proceedings before For more informa you have a will often make tion, go to the situatio www.mbie.gov n worse.) t.nz or call the Ministr y of Busines s, Innovation, and Employ ment on 0800 242 243.
cover:
Relevant exclusi ons on policy coverage, (if any):
Information about the building contractor
Type of policy:
Name of building contractor
[specify: eg, contract works, professional indemnity, public liability]
(full legal name):
Amount of
Type of business: individual/partnership/limited liability company:*
cover:
Relevant exclusi ons on policy coverage, (if any):
Date partnership/company* formed, if applicable: Postal address:
Information
about any
[specify: eg, guarantee, product warranty, complete d work warranty
Email address:
If guarantee or warranty is a product warranty, specify the produc t:
*Select one.
Key contact person (if identified at the time when this information is provided)
(Information about the key contact person, being a person who will manage or supervise the building work and who is available to the client to discuss any aspect of the building project)
Period of guaran warranty cover: tee or Limits or exclusi ons on cover,
(if any):
Name of key contact person: Telephone number:
Nature or type of guaran tee or warranty:
Mobile telephone number:
[specify: eg, guarantee, product warranty, complete d work warranty
Role in the building project (for example, “project manager”, “site foreman”):
Relevant qualifications, skills, and experience:
If guarantee or warranty is a product warranty, specify the produc t:
Period of guaran warranty cover: tee or Limits or exclusi ons on cover, (if any):
Licensed building practitioner number (if any):
Note: The building contractor must notify the client if the key contact person changes.
Insurance policies
Nature or type of guaran tee or warranty:
[specify: eg, guarantee, product warranty, complete d work warranty
(Details of every insurance policy or policies that the building contractor has, or intends to obtain, in relation to the building If work) guaran Complete for each policy: Type of policy: [specify: eg, contract works, professional indemnity, public liability]
Amount of cover: Relevant exclusions on policy coverage, (if any):
guara
(Information ntees or warra about any nties guarantees Complete for or warranties each guarant the building ee or warrant contractor offers in relation y: Nature or to the building type of guaran work) tee or warranty:
Telephone number:
tee or warran ty is a product warranty, specify the produc t:
Period of guaran warranty cover: tee or Limits or exclusi ons on cover,
(if any):
]
]
]
S E G N A H C W A L G IN D IL BU If you are awarded the job, and the price of the job exceeds $30,000 (inc GST), then you must provide a written contract to the client. The contract must include prescribed information. This is, however, only the minimum level of information that is required in a written contract. The more expansive and inclusive the contract, the better your protection, should anything go wrong. (See ‘Contracts’ and ‘Default Clauses’ sidebars - following page)
There is also a legal requirement to provide your client with further information and documentation once the work has been completed. This includes copies of relevant insurance policies for the building work you have completed under the contract, copies of guarantees or warranties for materials or services used during construction, and maintenance information.
At this point, you need to ensure that all required building consents and approvals have been issued and that any necessary licenses to undertake the work required are held by those completing the work.
Once the work has been completed, you need to provide a Record of Work to the client. Each LBP who has carried out or supervised RBW must legally provide a Record of Work to both the homeowner and the relevant territorial authority upon completion. You cannot contract yourself out of the obligation, and you could also be subject to disciplinary action and a penalty if you do not provide a Record of Work.
AFTER BUILDING WORK FINISHES Once this has all been done, the homeowner is legally liable to pay you for the work completed. Terms for the payment - or schedule of payments – will have been written in your contract, along with how they will have been invoiced, made and receipted.
Some content has been reproduced with permission from the Ministry of Business, Innovation and Employment.
Fix any defects that arise from the work completed. The defect repair period – under the new regulations is the first 12 months after building work is complete. If your client advises you (in writing) of any defective work within 12 months of the completion of the job, you must put it right within a reasonable timeframe. This 12-month defect repair period applies to all residential buildings, regardless of the price. See ‘Implied Warranties’ sidebar - following page) During this time it is the contractors’ responsibility to prove that any defects are through no fault of their own (or their product) if there is a dispute about whether or not the matter is a defect.
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S E G N A H C W A L G IN D IL BU Contracts As part of the new regulations, you must provide a written contract to your client for any residential building work costing $30,000 or more (including GST). Any person or business that contracts directly with the homeowner is responsible for providing a written contract, if that work costs $30,00 or more. The price of the job should be the total cost of all the building work, plus GST, regardless of whether the work is being done by a subcontractor (unless the subcontractor is entering into a separate contract with the client). There are a number of minimum items that a contract MUST contain; in summary these include: contact details of both parties, location of the worksite, start and completion dates, contract price, a description of the work, details of consent responsibilities, the payment process, how defects will be remedied, dispute resolution, variations and an acknowledgement the checklist and disclosure statements have been received.
The minimum content only covers the basic requirements, so make sure your contract is suitable for the building work you are undertaking. One option is to get legal advice as to what should be included in your contract, so that it covers all the required content.
The law sets out Implied Warranties that apply to all residential building work for up to 10 years, regardless of whether or not there is a written contract or what the contract terms are. The first 12 months from the date that residential building work is complete is the ‘defect repair period’. Implied Warranties cover almost all aspects of building work from compliance with the Building Code to good workmanship and timely completion of building work. There are also new ways for homeowners to take action when the warranties have not been meet. These are in addition to any action they can take against you for a breach of contract.
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If you are undertaking residential building work costing $30,000 (including GST) or more, and you don’t have a written contract or if your written contract doesn’t include the minimum content specified in the Act, there are new default clauses which will be considered to be part of your contract. These clauses only apply if you don’t have a written contract or if there is no clause on the same topic in your contract. A default clause won’t override an existing clause in your contract on a similar topic.
You can also purchase NZS 3902:2004 Housing, Alterations and Small Business contract from Standards New Zealand (www.standards.co.nz), which meets the required minimum.
Implied Warranties
Default clauses
The default clauses cover many aspects of a building project; including that the contractor is responsible for obtaining all consents and approvals on behalf of the client, and that the contractor may not submis a final payment claim until the Code Compliance Certificate has been provided.
These cover: • What happens when the breach can be remedied. •W hat happens when the breach is substantial or cannot be remedied. • The meaning of a substantial breach. The Implied Warranties are listed in section 3621 of the Building Act. They must be met for all residential building work. You can also see the full list of Implied Warranties at www.doyourhomework.co.nz
The information contained in this article is developed as a guide only. More substantial information is available from doyourhomework. co.nz, where you can also download two comprehensive booklets – one for consumers and one for contractors.
LBP SCHEME
LBPs Skills Maintenance requirements set to change As part of an ongoing raft of changes to regulations relating to the New Zealand building and construction industry, the Ministry of Business, Innovation and Employment (MBIE) has announced changes to the Licensed Building Practitioners (LBP) that will be implemented later in the year. The changes are designed to make ongoing professional development for LBPs more relevant and potentially less onerous, whilst ensuring they remain professionally competent. The new requirements tie in with the scheme’s purpose of giving consumers confidence that the LBPs they employ meet standards and perform building work competently (see related story on the new building laws, starting on page 4). “New Zealanders want to know their homes and buildings are properly designed and built by people who are trained to do the job,” says Paul Hobbs, MBIE’s Registrar of Building Practitioner Licensing. “By moving away from an entirely points-based system in favour of learning outcomes, LBPs can keep up with best practice whilst continuing to give consumers confidence they are qualified and accountable for the quality of their work.” Under the new scheme, which was developed in consultation with LBPs, stakeholders and representatives from the Building Practitioners Board, LBPs will be required to do compulsory and elective activities. The compulsory activities will involve reading the LBP News section of MBIE’s Codewords newsletter and identifying two examples of on-the-job learning. LBPs will also do elective activities that are relevant to their work and licence class. Mrs Hobbs says trade publications, such as Mitre 10 In Trade, will remain valid in the elective part of the scheme as will the ‘1 hour per point’ value for reading. The new Skills Maintenance scheme does not introduce any new activities - it simply makes two existing activities compulsory, with the aim of making the scheme more meaningful and in line with best practice across all seven licence classes.
“The Ministry will road-test the new scheme during the first half of this year, by working with LBPs, building merchants, and trade associations so that any unforeseen issues are resolved before LBPs are required to transition from November 2015” says Mr Hobbs. “A strong and skilled building and construction sector is vital to New Zealand’s economy and prosperity. These changes will allow the sector to continue to provide the kind of quality and high standard workmanship needed to support New Zealand’s future growth.” The Registrar administers the LBP scheme which was launched in 2007 to raise standards across the building and construction sector and consumer confidence in the quality of work carried out. Since 2012, it has been compulsory for practitioners who do restricted building work to be licensed or to work under the supervision of a licensed practitioner. More than 24,000 LBPs have been licensed to date.
“New Zealanders want to know their homes and buildings are properly designed and built by people who are trained to do the job,” says Paul Hobbs, MBIE’s Registrar of Building Practitioner Licensing.
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LEGAL
Enforceability of general conditions in resource consents By Nick Whittington, Meredith Connell
Mitre 10’s members operate more than 100 stores across New Zealand. They do that under many hundreds of resource consents granted by local authorities. Almost all of those resource consents contain a general condition, usually “condition 1”, requiring the resource consent to be implemented generally in accordance with all of the information, including plans, drawings, expert reports submitted in support of the application (general condition).
Nick Whittington
There are two schools of thought on the role of the general condition. Before the Resource Management Act, it was often included by local authorities as a condition because interpretation of a resource consent could only have regard to the application and supporting documentation if those documents were referred to in the conditions. So, in that light, the condition was simply a way of enabling the supporting material to be referred to for interpretation purposes, or as determining the scope of the resource consent. Since the Resource Management Act however, interpretation of a consent is to be approached in context. The context necessarily includes the information lodged in support of the application. The general condition could well be seen as redundant. But in recent cases it has been seen as an enforceable condition in its own right, with local authorities bringing enforcement action to require compliance with particular aspects of the supporting material even though no other express condition had been breached. However, the Court of Appeal has recently poured cold water on that approach by local authorities in a decision of real importance for consent holders and Councils alike. In Palmerston North City Council v New Zealand Windfarms Limited [2014] NZCA 601, a majority of the Court declined the Council’s application for declarations that Windfarms had breached the general condition.
Nick Whittington is a Partner in Meredith Connell’s Commercial Litigation team. He specialises in Environmental Planning and Resource Management, and Commercial Dispute Resolution.
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Windfarms applied for resource consent to operate a windfarm near Palmerston North. The most significant adverse effect was that of noise on neighbouring properties. The supporting information predicted noise levels at the neighbouring properties based on estimates of sound levels at the turbines and following calculations about the travel of sound. The Council imposed two specific conditions (Conditions 4 and 5) to deal with noise effects.
LEGAL Shortly after the windfarm became operational, it became clear that the sound calculations were horribly wrong. The neighbouring houses were dramatically affected by the sound of the turbines. The Council decided to commence enforcement action. However, because it did not have sufficient evidence to prove breaches of the two specific conditions, which involved measurement of sound levels at the neighbouring properties, the Council relied on the general condition, alleging that the sound levels at the turbines were not in accordance with the estimates made in the supporting information and used as “inputs” to calculate the sound levels at neighbouring residential properties. The Council succeeded before the Environment Court, but the High Court, now confirmed by a majority of the Court of Appeal, found that the Council could not rely on the differences between the estimated sound levels at the turbines and the actual measurements to show that the resource consent was not being operated “generally in accordance with” the supporting documentation. That is because the estimates were not intended as limits on the scope of the resource consent. The Court did not say that the general condition could never be the basis for enforcement action, however. Where the consent was being operated beyond its general scope and no specific condition applied, it might be used to justify enforcement action. For example, if the consented plans
indicated that 1000m3 of earthworks was proposed but 2000m3 was undertaken then the general condition would be engaged. The critical issue is whether the supporting information provides a measurable criterion for which there is no specific condition imposed. The central core of the Court’s decision is that the huge mass of information lodged at the time of seeking a resource consent will not always form standards that must be complied with in practice, but the risk that it could is something that consent holders should be aware of. The lessons for consent holders include not being unnecessarily detailed, if it can be helped, in drafting the supporting material, or providing more information than necessary. The risk of being overly narrow is that any measurable effects might be used as defining the scope of the consent via the general condition and reducing the “wriggleroom” that many consent holders desire. The risk in providing unnecessary extra information is the same. However, where there is a risk of non-compliance with measurable effects, consent holders are far better advised taking uncertainty out of the equation and providing specific conditions they can live with so that there can be no question of compliance. This will provide clarity and avoid litigation over the scope of the consent. By volunteering such conditions the consent holder will likely maintain control over the scope of the consent rather than leaving them to the quirks of Council planners.
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H3.1 cavity battens By Alide Elkink, Freelance Technical Writer, Wellington
AS WITH ALL TIMBER USES, IT’S IMPORTANT TO SELECT THE RIGHT TREATMENT FOR CAVITY BATTENS. New Zealand building code Acceptable Solution E2/AS1 paragraph 9.1.8.4(d) says that timber cavity battens shall comply with the durability requirements of Acceptable Solution B2/AS1. NZS 3602:2003 Timber and wood-based products for use in building Part 1, as modifi ed by B2/AS1 paragraph 3.2.2, is an Acceptable Solution for meeting the durability requirements of timber and wood-based building elements.
H3.1 cavity battens Radiata pine battens treated to H3.1 in accordance with NZS 3640:2003 Chemical preservation of round and sawn timber are deemed to meet a 50-year minimum durability performance (B2/AS1 Table 1A). Treatment to a higher level, i.e. H3.2, is therefore not required. However, the basis of E2/AS1 is that the cavity should remain dry.
A few things to remember Cavity battens must not be ripped down from larger timber members, as this is likely to expose untreated timber. NZS 3602:2003 paragraph 109.3 says that treatment of timber battens must be carried out in their fi nal shape. If the treatment is copper-based (for example CCA, copper azole or ACQ), the battens must not be in direct contact with metal wall cladding. This may cause corrosion of the cladding. A suitable separation layer must be used, such as an additional layer of paper-based underlay over the cavity battens or strips of paper-based underlay on the face of the cavity battens. Although E2/AS1 doesn’t require a separation layer when timber has been treated with the less corrosive CuN treatment, it is prudent to still use a separation layer.
For more The grading and fi xing of structural timber cavity battens is a separate topic and will be discussed in a future issue of Build.
IMPORTANT The 1st of January 2015 sees significant changes to the Building Act and Regulations that will affect EVERY builder. The changes include new responsibilities including the need to provide a written building contract for all jobs over $30,000.
BUILDERS ARE YOU READY?
The timing of these changes is not ideal as they require builders to hit the ground running as of the 1st of January 2015. We’re sure you’d rather be fishing than running around like a headless chicken sorting out paperwork. The GOOD NEWS is that Certified Builders already have a suite of contracts ready to go and a help-line available to all members for a minuscule cost. If you’re already a member you’ll be
and if you’re not don’t worry, simply give us a call and we’ll help ensure you don’t hit any unnecessary speed bumps come the new year. To join the Certified Builders team visit www.certified.co.nz or call us today on 0800 237 843
11
WAVE21689 M10
SWEET AS
BRANZ
Stud substitution BY TOM EDHOUSE, BRANZ TECHNICAL ADVISOR
TABLE 8.2 IN NZS 3604:2011 Timberframed buildings covers stud selection for various confi gurations: • For a single or top storey with light or heavy roofs, use Table 8.2(a). • For the lower of two storeys, or subfl oor walls beneath one storey, use Table 8.2(b). • For subfl oor walls beneath two storeys, use Table 8.2(c). All the tables give stud sizes and spacings for given stud lengths and wall loaded dimensions.
Notes important It’s important to read the notes at the bottom of the tables (see Figure 1).
Figure 1: NZS 3604:2011 Table 8.2(a) provided by Standards New Zealand under licence 001112.
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BRANZ Note 1 Note 1 says ‘Determine the loaded dimension of the wall at floor level and the loaded dimension of the wall above at roof level and use the greater value in this table.’ This means that, where the stud is supporting a floor that, in turn, supports a wall above and that wall supports a roof, the greatest loaded dimension of the floor or roof is used to select the studs from the table (see Figure 2).
Note 2 often misinterpreted Note 2 says ‘140 × 45 may be substituted for 90 × 90, 90 × 35 may be substituted for 70 × 45’.
Figure 2: Note 1 – Select the higher value loaded dimension.
This means that, where the tables require a 90 × 90 mm stud, it can be substituted with a 140 × 45 mm stud. The reverse is not true – where a 140 × 45 mm stud is required in the tables, it cannot be substituted with a 90 × 90 mm stud. If Table 8.2 requires a given depth of stud, any substitution must be with a greater depth stud. For example, where the table requires: • a 70 mm deep stud, it can be replaced with a 90 mm stud • a 90 mm deep stud, it can be replaced with a 140 mm stud • a 140 mm deep stud, it cannot be replaced with a lesser depth stud. The other example – ‘90 × 35 may be substituted for 70 × 45’ – means that, where a 70 × 45 mm stud is required in the table, it can be substituted for a 90 × 35 mm stud, so a deeper (now 90 mm) but thinner stud (see Figure 3).
Figure 3: Note 2 – Stud substitution. 13
BRANZ
Note 3
Studs of 70 mm thickness may be replaced with 35 mm studs and 90 mm thick studs replaced with 45 mm, provided the spacing is reduced to no more than half of the spacing required for the 70 mm and 90 mm studs they are replacing (see Figure 4).
Note 4 Studs 70 mm and 90 mm thick may be substituted with builtup members sized in accordance with NZS 3604:2011 clause 8.5.1.2 and nailed together in accordance with clause 2.4.4.7 (see Figure 5). Figure 4: Note 3 permits replacement where stud spacing is halved.
Figure 5: Note 4 permits replacement with studs built up in accordance with NZS 3604:2011 clause 8.5.1.2.
You want help with more than just the numbers, right? You don’t have time to visit your current accountant and they won’t come out from behind their leatherpadded desk.
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SITE SAFETY
Housekeeping horrors
Navigating a minefield of hazards Cleaning is nobody’s favourite job, but it is a necessary evil to prevent worksite injuries. Poor housekeeping is one of the most common causes of injuries at work – and the most preventable. A tidy worksite is a productive and safe work environment for everyone. It can be easy for things to be forgotten, and it’s easy to fall into the, ‘someone else will do it’ mentality. The state of your worksite also sets the tone for how your company is perceived and has an impact on your reputation, both to your clients and your peers in the building industry. A tidy work site oozes professionalism. But never fear, an unkempt worksite is one of the easiest problems to solve. All you need to know is what hazards to be aware of and how to minimise them. Creating a safe worksite and c leaning as you go is best practise for preventing a buildup of clutter – Also known as: accidents waiting to happen.
What are potential hazards? Wet and slippery surfaces: • weather can be unpredictable - rain, sleet or wind can make outdoor surfaces uneven or/or soft making slipping easy • oils and lubricants can spill creating a dangerous slippery surface and if the floor is oily while hot work is being done (i.e. welding or grinding), it could create a fire hazard.
Obstacles: • loose objects on floors, stairs and platforms, and excessive material or waste in the working area are all potential trip hazards • workers can easily bump into projecting, poorly stacked or misplaced material.
Waste: • rubbish accumulates quickly on site – it is often irregular in shape, hard to handle and full of sharp objects • Watch for overflowing waste containers and materials that have nails and wire sticking out.
How can I minimise and control these hazards? Organise storage: • provide sufficient and convenient space for materials and tools • create a layout plan for materials and only order supplies as needed • mark out work and storage areas – clearly separating work activities from materials • use racks when storing lengths of pipe or timber – don’t stack palettes too high.
Create a healthy work site: • if working outdoors be aware of muddy areas – clear loose mud before setting up and climbing a ladder, rid shoes of as much excess mud as possible/reasonable • make sure worksite is well lit – use natural daylight where practical.
Organise Waste Management: • establish suitable waste locations – separating waste where appropriate (i.e. controlled and special waste) • bag and tie lightweight waste to prevent it blowing around the work site • hammer in or remove nails from wood waste • never overload a skip – permission may be needed to place it on the road and it should be suitably cordoned off from the public • beware of accumulating flammable waste • inspect your waste – can anything be reduced, re-used or recycled? Waste costs money!
Maintain equipment and materials: • stack and store equipment and materials in fixed places, away from walkways and emergency exits • put equipment away when not in use (eliminates tripping hazard) • when glass cutting or welding keep a fire extinguisher close by. Implementing set standards of housekeeping at the beginning of each job is the best course of action. Cleaning up after yourself during the day as well as a 15 minute tidy at the end will help you and others to concentrate on working hard rather than nursing a sprained ankle.
Lighting: • inadequate lighting and dirty light fittings, windows and skylights can make hazards hard to see.
Hygiene: • bathroom and kitchen facilities that are not cleaned regularly can cause significant health hazards.
Contact your local Site Safe Advisor for help in developing and applying your own fatigue policy and procedure – www.sitesafe.org.nz/advisors Site Safe is a national not-for-profit membership organisation that promotes, supports and inspires a culture of health and safety in the NZ construction industry.
15
BUSINESS
Keep on top of your cashflow by Greg Sheehan
Cashflow is the lifeblood of any business and business owners should regularly be considering ways to improve their cashflow. Why? More cash = more options. More options = less stress. Less stress = better choices. Better choices = better success. Better success = more cash… ...and around it goes. Here are our five tips at RightWay for better managing your business cashflow. 1. P erform a good forecast Most things are predictable if you spend the time working it out. Sit down with your accountant (or get a better one if they’re no good) and do some good forecasting of where your cash is going over the next few months (beyond that is a waste of time). This will identify any immediate areas of concern. Having a forward view of where your cash will be gives you the opportunity to do something about it ahead of time. 2. Evaluate your customer terms If you are paying people 20 days after they invoice you and your customers are paying you 40 days after you invoice them, then that’s a big gap you have to fund. If you fund it then that’s less cash for you. Tighten up your payment criteria. One good way to do this, is offer a discount for early payment. Another idea is to ask for 50% up front 50% on delivery. 3. Enforce payment If people haven’t paid you, then they either genuinely cannot (and you shouldn’t sell them stuff) or they’re taking the mickey. Tell them there are perfectly good banks out there that love being banks and that, last time you looked, you weren’t one of them. It’s great being charitable, make sure you have a process for debtor collection. If you don’t have one that works, ask us to help you get one. It’s mission critical to have good predictable cashflow. 16
4. Turn over your stock quicker You either sell stuff or you sell time (services). Either way, do not let it just sit there. Turn it into cash quicker. Look at your badly performing inventory lines and get out of selling them. So much money can be tied up in slow moving stock. The same principle applies to people selling services. Just get your invoicing done quicker. We know so many tradesmen who take forever to get their invoicing out. What’s wrong with sending an invoice immediately after the job has been done? 5. Make cash a priority Being in business is not just about doing the work and hoping you get paid. The job is not done until the cash is in the bank. Cash is King in a business, so make sure it gets to be treated like a King. Give it your best attention. Put some focus into how to turn your hard work and effort into more dollars in the bank. Get those things right and you’ll have more cash around. That should help put a smile on your face. If you want some help improving your cashflow, we run some great one hour one-to-one cashflow improvement sessions.
Greg Sheehan is the CEO of RightWay, a team of chartered accountants/business advisors who are straight-up, super-knowledgeable and 100% behind grassroots Kiwi businesses. For more, go to rightway.co.nz
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Waste management costing builders more than it should. How much waste is created on building sites? The typical home renovation fills five to seven skips – yet much of that rubbish can be drastically reduced. Cutting down waste not only cuts costs for builders – it also reduces environment impact and can help projects meet targets for sustainability. About half the waste in New Zealand’s landfills comes from construction or demolition – most of which could be re-used or recycled, says Vanessa McGrath, Senior Technical Coordinator at the New Zealand Green Building Council (NZGBC). 18
“It’s astonishing how easy it is to cut down construction waste once you start making it part of what you do,” she says. “The first step is to sort it on site. For example, timber can be recycled; plasterboard can be turned into fertiliser. Learning how it can be managed, where it can go, and making staff and sub-contractors aware of what to do with it, is a big step forward.” Homestar, run by the NZGBC, is the independent rating tool for home sustainability. It’s increasingly being used by developers to ensure homes are healthy and efficient. How waste is managed onsite is one aspect that contributes to a Homestar rating.
NZGBC “There’s growing interest in how to build homes that are more sustainable. With rising material costs, as well as increasing pressure on landfills, waste is set to become a really important issue for the industry,” McGrath says. Supported by Auckland Council, the NZGBC recently produced training videos featuring contractor Keola Homes as they learn about waste management and start putting a plan into place.
There are also a number of small changes that can help cut waste and costs, such as using smaller skips to discourage the common phenomenon of neighbourhood dumpers. “If neighbours choose to dump their old TV in a big skip up the road, that cost falls on the builder,” she says.
By the end of the project, Keola Homes successfully cut waste to only 15kg per square metre of new build – reducing overall waste by about three tonnes. As well as saving money, it gave the company a system it could roll out on other projects.
The NZGBC is running ‘How To’ Breakfast Workshops for builders on Minimising Waste. These workshops, which are supported by Waste Management NZ Ltd, are going to be held in Auckland, Wellington and Christchurch between 06 and 20 March.
McGrath says the biggest cost savings from improved waste management tend to come in subsequent projects, as companies adapt the way they work. For example, the average new build wastes about a quarter of plasterboard as there’s no incentive for suppliers to provide the exact amount needed. If payment is based on the amount of material actually installed rather than just supplied it reduces the issue of waste from over-supply, she says.
www.nzgbc.org.nz
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TRADE COACH The power of ‘niche’ With the construction industry being in a fairly buoyant state going into this year, especially in Auckland and Christchurch, the apparent need to focus on marketing does not seem to be a high priority.
Some business owners don’t want to take the seemingly braver path of niching their business and remain a generalist. They fear missing out on jobs because they are not in their chosen niche. This is a fair point, but not a strong one, in my opinion. I think the benefits outweigh the negatives, if the niching process is carried out well and followed through consistently.
This may appear to be the situation on the surface, but ignoring it can lead to a roller coaster of leads coming in and result in a feast or famine of work in the longer term. Why not take the opportunity to proactively refine your marketing this year and provide a solid lead generation machine of your ideal projects? A corner-stone of this is the strategy of “niche marketing”.
Leads in non-niche areas will still probably come to you anyway, from past clients and the like, so you can still say “yes” to those jobs if you wish. The niching process is more in how you proactively MARKET your business to attract new leads in your favoured area. So how do you niche your business?
Niche marketing -or specialisation - is used by industries of all types because doing a few things with a high level of expertise will bring recognition and a reputation of excellence quicker than doing many things well. The medical field is a good example of an industry that is filled with niche marketing. If you have a general ache or pain, you go to your GP. If you have a chronic issue however, you go to a specialist, because they have the specialist knowledge, experience and equipment to solve your problem as fast as possible. The benefits of niche marketing your business in a particular market segment are many and varied: • • • • • •
More effective advertising; Cheaper marketing costs; Being viewed as the expert; More efficient (thus lower cost) field operations; Able to charge higher prices; Better understanding of customer needs and emotional “hot buttons”.
Andy Burrows Andy Burrows has been a professional business advisor, mentor and coach since 2006. He specialises in working with the owners of constructionrelated businesses to build systems and profitability into their operations.
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Finding the best niche market for your company is as simple as answering a few questions. A sample questioning process could be: • What area of our industry does our company excel at? • Do we want to specialise in commercial or residential? • If we chose residential – – Do we want to work with the general public? – Or do we prefer to work with investors who have rental homes? • Do we want to do jobs all over your region; if not, define a specific area of the region, city or community that we ideally want to service. • Do we want to do jobs of all sizes or stay within a certain price range? As you answer these questions, you’ll get a clearer picture of the type of jobs you want to do, in what radius you prefer to work and the type of client you want to work with. Once you have done this. you will then have a very clear framework to develop and measure your marketing activities against. When offered an opportunity to promote your business somewhere, you can ask, “will this promotion opportunity target and reach my chosen niche?”. If it will, you can go forward with more confidence. If not, you can keep the money in your pocket and wait for a better opportunity. If you’re having problems defining what you do better than your competition, start by examining the needs of your best customers – especially your repeat customers. Why do they keep coming to you? What do you do that puts you at the top of the pack when they need work done? Consider niching your business in 2015 and aim to dominate your chosen market segment. It is better, in my opinion, to be a bigger fish in a smaller pool than a small fish in a bigger pool. Contact me to discuss how I can help you become a bigger fish in 2015!
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Email your answer to m10trade@mitre10.co.nz with the words ‘March competition’ in the subject line and you’ll go in the draw to win. You must include your photo, your name, company name, physical address, daytime phone number and the name of the store you hold an account with.. All entries must be received by 5pm on Monday April 6th, 2015. Conditions of entry: You may enter only once/ Prize(s) are as outlined. Prize(s) are non-
refundable, non-transferrable and not redeemable for cash. The winner(s) will be notified by phone or email. Employees of ReFocus Media Ltd Ltd, Mitre 10 (NZ) Ltd, suppliers of goods to Mitre 10 and their immediate families and agencies are not eligible to enter. By entering this contest, you consent to the use of your name in all matters related to this contest, including any advertising or publicity without further compensation. Results of this promotion will be published in a later issue of Mitre 10 In Trade magazine. Prices that may be quoted in this promotion were accurate recommended retail prices at the time of publication. ReFocus Media Ltd and Mitre 10 (NZ) Ltd accept no responsibility for any loss or damage incurred from the use of these products.
Question: What period of time does an Implied Warranty now apply for in all residential wortk?
THIS PUBLICATION IS RECOGNISED BY THE BUILDING AND HOUSING GROUP AS CONTRIBUTING TOWARDS THE SKILLS MAINTENANCE REQUIREMENTS FOR THE LICENSED BUILDING PRACTITIONER SCHEME. If you are a Licensed Building Practitioner, cut out and safely retain this panel with your skills maintenance literature for future reference and audit confirmation. Ref. In Trade Vol 8, Issue 9 March 2015
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