A number of recent building failures highlight the need for building industry reforms that will better protect the interests of the community and in particular the owners and occupiers of high rise multi-residential buildings.
The Shergold-Weir Report to the Building Ministers Forum, published in February 2018, makes 24 recommendations for reforms to the industry. This paper addresses the recommendations that relate to the regulation of design service providers, particularly the architectural profession.
Current controls over architectural services
Architects Acts and regulations in all Australian jurisdictions are combined with educational and competency standards to ensure that registered architects are qualified to design and technically document buildings to a high standard and to administer construction contracts to ensure buildings are completed to meet design and technical documentation requirements, codes and regulations.
Current legislation and a long-established body of Common Law define the responsibility and liability of architects in the provision of their services. The law envisages a continuum of architectural services from design through to the completion of the building. This provides professional accountability and consumer protection.
Such arrangements ensure strict control over the quality of the design, working documents, construction contracts and the inspection and certification of the building. They present virtually no opportunity for those constructing the building to substitute materials or to deviate from the documented construction requirements.
Current building industry practice
The comprehensive level of liability and responsibility defined above is often avoided in contemporary apartment construction by the fragmentation of the process. It is now common practice, on apartment building projects and other high rise projects, to have the design architect services terminated at the end of the concept design, to have another practitioner appointed to prepare the construction documents and then to have a range of contractors, sub-contractors and suppliers be involved in the construction of the building.
This practice leads to confusion over who is responsible for the project as a whole. It is a fundamental principle of good public policy that the persons who make resource-allocation decisions should bear the costs and obtain the benefits of those decisions. Because many parties are making decisions as to the materials and techniques used to construct buildings, the costs and benefits of those decisions are diffused and the result is that sub-optimal decisions are made. This is a classic cause of market failure. For example it enables and provides attractive financial incentives for those involved in the construction process to substitute materials and construction techniques not originally specified.
Owners and occupiers also have to make resource allocation decisions: owners have to decide how much they are prepared to spend, and occupiers have to decide where they are to live. However, in the case of cladding, these decisions are characterised by asymmetry of information. Owners and occupiers lack the knowledge to determine themselves whether the material is inflammable or properly attached to the building, and the removal of the role of the independent professional architect or engineer deprives them of expert advice and assistance.
International jurisdictions and authorities have recognised the dangers of the market failures identified above and have or are developing means to deal with it.
For example, the United States National Council of Architects Registration Boards (NCARB) deals with this issue in its Guidelines and Model Law/ Model Regulations publication. Guideline VII states:
“VII. REQUIRING THAT AN ARCHITECT BE ENGAGED DURING THE CONSTRUCTION OF A PROJECT
- An owner who proceeds to have constructed a project having as its principal purpose human occupancy or habitation and not exempted under Section VI shall be deemed to be engaged himself/herself in the practice of architecture unless he/she has employed an architect to perform at least minimum construction contract administration services, including (i) periodic site visits, (ii) shop drawing review, and (iii) reporting to the owner and building official any violations of codes or substantial deviations from the contract documents which the architect observed.
- It shall be the project design architect’s obligation to report to the state board and to the building official if he/she is not engaged to provide construction contract administration services described in Paragraph A.”
In the United Kingdom, the Royal Institute of British Architects in its Statement on Design for Fire Safety, following the Grenfell Tower disaster, identified the following concerns about the procurement regime for buildings in the UK:
- “Developments in building procurement approaches which mean that the Lead Designer (architect or engineer) is no longer responsible for oversight of the design and the specification of materials and products from inception to completion of the project, with design responsibility often transferred to the contractor and sub-contractors, and no single point of responsibility.
- The virtual disappearance of the role of the clerk of works or site architect and the loss of independent oversight of construction and workmanship on behalf of the client.
Proposed legislative reform
Market failures as described above can only be overcome by statutory controls requiring continuous accountability for design, technical documentation and inspection through the building process from inception to completion.
Hence, it is suggested that the most effective way for Australian jurisdictions to address this market failure is to simply modify existing legislation to ensure that on Class 2, 3, 5 and 9 buildings an architect of accountbe appointed to provide full design, technical working documentation and contract administration services.
The architect’s responsibilities should include:
- periodic site visits
- shop drawing review
- reporting to the owner and the relevant authority any violations of codes or substantial deviations from the contract documents which the architect observed.
Cost of reform
The proposed reform would not generate any discernible additional cost to the construction industry.
Design, technical working documentation, contract administration and inspection services are currently inherent components of the cost of a building. Indeed, it is probable that the cost of engaging a series of service providers is greater than a single competitively appointed professionally qualified provider.