Building defects, professional standards and compliance culture

Overview

In light of the rise of building defects, it is incumbent on governments, industry bodies and regulators to identify core risk factors and entities responsible for building defects.

There is evidence indicating that some building defects may be linked to design issues, but the specific design services and practitioners that may be responsible for these defects need to be clarified.

Common factors that could cause building defects include time and cost pressure, as well as unreasonable client demands and expectations, which are prevalent in the context of D&C contracts suggesting that the D&C context should be a focus of attention.

There is evidence that there may be a poor culture of regulatory compliance among limited pockets of practitioners, but there is no evidence of a general disinclination to comply within the sector.

The NCC may not be as user-friendly and accessible as intended, making it challenging for some practitioners to comply. A stocktake of the education and training of graduates and architects on the NCC as they progress through their careers could help in identifying gaps and areas for improvement and enhancement of knowledge.

A. Background

119. Defects and failures in newly constructed multi-storey residential buildings have recently been in the spotlight, including Opal Tower (Sydney),[1] the Spencer Street apartment building (Melbourne)[2] and Elara apartment complex (Canberra).[3] Moreover, as explained below, there is evidence indicating a rise in building defects in Australia over time, particularly for multi-owner and high-rise residential buildings.

120. The Deakin University Study of Residential Multi-owned Properties (2019) found that, among the 212 building reports that were examined across NSW, Queensland, and Victoria, 85% had at least one defect.[4] The NSW Building Survey (2021) found that 39% of strata buildings in the sample experienced serious defects in the common property.[5] A study published in 2021 in relation to residential buildings in Victoria found that there has been a notable increase in the number of defects in residential building construction from 2011 to 2018 in line with an increase in the number of residential constructions in Victoria during this period[6] and multi-owner dwellings were found to be among the main source of residential defects.[7] The CIE Study for the ABCB (2021) suggests that a higher prevalence of defects in multi-storey buildings may be linked to the fact that developers do not maintain ownership and, therefore, are incentivised to build at lowest cost in the shortest period of time.[8]

121. A wide range of building defect types have been identified in various Australian studies, the most common of which are:[9]

• structural
• fire protection
• cladding
• waterproofing/weatherproofing
• entry/exit problems.

122. Defects reduce the quality of construction but can also lead to increased costs associated with rework, unexpected delays and poor reputation within the industry.[10] As defects can take some time to emerge, it may be difficult to determine the cause.[11] This, in turn, can hamper efforts to ensure that the cause of defects are identified and rectified as soon as possible.

123. To date, studies undertaken in Australia have not established a clear correlation between design services rendered by architects and the growing incidence of building defects. Nonetheless, architects are likely to face increasing scrutiny regarding their contribution, if any, to these defects.

B. Key issues

There is evidence indicating that some building defects may be linked to design issues

124. Architectural services encompass a broad range of design activities, including:

• pre-design (for example, client briefing and site analysis)
• concept and/or schematic design
• design development
• co-ordination of design consultants and liaison with relevant authorities
• preparation of design documentation, including drawings and specifications
• managing and/or monitoring the construction process to ensure that the built outcome aligns with the design intent.

Some of these services may be provided by practitioners that are not qualified or registered as architects.

125. Design issues have been consistently identified as the cause of some building defects in various foreign studies including by Olubodun and Mole (1999), Akinpelu (2002), Ayininuola et al (2004), Chew (2005) and Carretero- Ayuso et al (2015). [12] According to Akinpelu (2002), improper presentation and interpretation of architectural design are among the major causes of structural failures.[13] These views have been echoed by Carretero- Ayuso et al (2015), who identify the lack of detailed plans as a direct cause of many defects.[14]

126. An in-depth review was undertaken of previous studies and found that the factors contributing to construction defects could be reduced to five groups, including one group of factors related to design.[15] More specifically, the study undertaken by Alomari (2022) found that factors concerning design and construction respectively are the most prevalent contributors to building defects.[16] A Singaporean study undertaken by Chong & Low (2006) suggests that between 50 – 60% of building defects could be attributed to design issues or would have been preventable with better design.[17] Analysis by insurance giant Allianz in 2021 also suggests that design defects are among the leading causes of construction and engineering claims, accounting for around 20% of the value of engineering insurance losses over the past five years.[18]

127. The various foreign studies suggesting a possible link between some building defects and design issues must be considered in context and may have limited relevance for the Australian construction sector. Moreover, these studies do not clearly identify the scope and nature of design under consideration, nor the entity responsible for design. In other words, it is unclear whether the studies concern the provision of architectural services by registered architects or, rather, involve other practitioners and services that do not technically qualify as architectural services of the kind regulated by the ARBV and NSW ARB. Notwithstanding these qualifications, it is notable that studies have also been undertaken in Australia which could be interpreted as indicating a possible link between certain types of building defects and design issues.

128. In particular, a survey conducted in 2012 of certain members of the building industry (mostly builders) suggests that some problems experienced on site can be traced to architectural design decisions, inaccurate documentation, deficient specifications or ineffective knowledge of construction technologies.[19] More recently, Paton-Cole and Aibinu (2021) reviewed VCAT cases between 1998 – 2019 to understand trends in defect disputes and types, including a detailed examination of 10 selected landmark cases on defects to explore the root and proximate causes, as well as the triggers of defects and the impact of the disputes on parties. That analysis indicated that poor and defective workmanship is the proximate source of defects and is often created by poor supervision, incorrect design, and the procurement arrangement.[20] These Australian studies also have their limitations and do not provide a strong basis for concluding that there is a clear correlation between building defects and design issues in Australia. Nonetheless, the studies do raise questions about the existence, extent and implications of any possible correlation. Clearly, further research is needed to establish whether there is a link between building defects and the provision of design services in Australia and, if so whether architects are responsible.

Some studies question the adequacy of certain aspects of architectural design services, particularly design documentation

129. The Victorian and NSW Codes impose general obligations on architects to act with reasonable care in providing architectural services.[21] Evidence indicating that standards of design and associated documentation may have fallen in recent times is notable in light of these obligations.

130. An Australian study undertaken in 1999 involving contractors and designers to determine the extent and impact of design and design documentation quality on the construction process spoke of ‘design deficiency’ and design documentation that was ‘substandard or deficient due to incomplete, conflicting or erroneous information’ leading to construction inefficiencies and increased project costs’.[22] That study suggested that the main contributing factors include reduced fees, tight delivery deadlines and unrealistic client expectations.[23] The authors of the study stated that ‘the quality of design and documentation produced in Australia is of major concern to many parties within the construction industry’.[24]

131. The authors of another Australian study undertaken in 2012 that involved a survey of a limited number of members of the building industry (particularly builders) suggest that ‘design deficiencies’ account for almost half of all documented variation orders, rework, cost overruns, extensions of time, program delays, contractual disputes and requests for information. They assert that these impressions are supported by data about the principal causes of claims against architects. [25] The survey responses were used to inform the identification of the main reasons leading to inadequate design documentation. It was suggested that these include external time pressure, disregard of applicable documentation standards, reduced consultancy fees and inadequate coordination among other relevant contractors, including engineers.[26] Survey respondents also stated that they were not aware of any industry initiatives to help ensure that design documentation is ‘fit for purpose’ – that is, ‘unambiguous and coherent; timely, accurate and complete; easily communicated and constructed; and coordinated with external documentation as appropriate’.[27]

132. The above studies call into question the adequacy of certain aspects of design services. However, once again, it is unclear whether the studies concern the provision of services by registered architects or involve other practitioners and other types of design services. Nevertheless, there is some evidence that findings in these studies may be relevant for architects in Australia today. The ACA has suggested that, together with other factors, declining revenues and associated incentives which can be produced by certain procurement models mean that architects are ‘unable to spend sufficient time conducting research, exploring options, looking at whole-of-life value, checking documentation and co-ordinating the work of secondary consultants’.[28]

133. Moreover, it is not unusual for the ARBV to see complaints about poor quality drawings and discrepancies in specifications arising in the context of broader allegations of professional misconduct. This is paradoxical given increasing reliance on digitalisation, like building information modelling (BIM), which should theoretically enhance the quality of design documentation.[29]

134. Koo and O’Connor (2021) point to previous studies showing that incomplete and incorrect design deliverables lead to project cost overruns, rework and schedule delays. They argue that high-quality design deliverables are essential to successful project outcomes but acknowledge that, as construction projects become increasingly complex, achieving satisfactory design quality is more of a challenge.[30] The literature suggests that the quality of design documentation appears to be of particular concern. Good quality design documentation must be precise and accurate, comprehensive and unambiguous, and fit for purpose by conveying design intent.[31] Yet, the seminal ‘Building Confidence Report’ by Shergold and Weir (2018) states that the adequacy of documentation prepared and approved as part of the building approvals process, including documentation prepared by architects, is often poor in part because owners and developers seek to minimise costs on documentation.[32]

Questions have also been raised regarding architects’ compliance with the National Construction Code

135. The Building Confidence Report also observes that schemes across Australia that regulate architects do not expressly require architects to prepare documentation that demonstrates that the proposed building will comply with the National Construction Code (NCC).[33] The report further states that poor quality design documentation may lead builders to improvise and make decisions that are not compliant with the NCC.[34] The CIE Study for the ABCB (2021) reports that, despite a lack of comprehensive data, anecdotally there is evidence indicating unacceptably high levels of non-compliance with the NCC.[35]

136. Clearly, compliance with the NCC is essential to ensure safety in the built environment. Evidence available to the ARBV and NSW ARB is that architects do document compliance with the NCC and the great majority of them do so with reasonable skill and care. Having said that, the NCC is a detailed and complex document, aspects of which may be poorly understood by some architects. This is consistent with findings in a 2020 survey conducted of relevant stakeholders in the building and construction industry in New Zealand to identify challenges faced by those seeking to comply with the NZ building code. A significant number of respondents referred to complexities in the building code, absence of training and capacity building, and a general lack of awareness about the code.[36] In light of the challenges associated with understanding and applying the NCC in practice, architects may rely, instead, on consultants with specific expertise in the NCC to ensure that their designs and design documentation meet the applicable standards.

137. As for mechanisms in Australia to enhance knowledge and understanding of the NCC, aspects of the Code are covered in university architecture curricula. The 2021 NSCA places greater emphasis on knowledge of the NCC in the context of these curricula, including principles of fire safety. Ideally, architectural graduates would emerge from university with a clear understanding of how to navigate the NCC. The Architectural Practice Examination, which is a precursor to registration of architects, is currently under review by the Architects Accreditation Council of Australia (AACA) to implement the 2021 NSCA and will have a stronger and mandatory emphasis on the NCC. A focus on the application of the NCC would be helpful at this stage of an architect’s career. Continuous professional development (CPD) could then be used to maintain awareness of the NCC, particularly as building standards evolve and change.

138. A 2019 article on the ACA’s website indicates that the cost of accessing Australian Standards referenced in the NCC may be an obstacle to compliance by architects.[37] Interviewees for the Deakin University Study of Residential Multi-owned Properties (2019) also suggested that the lack of open access to these Standards is a barrier to compliance.[38] They further noted that, in some cases, the provisions of the NCC may be at odds with the relevant Australian Standards.[39] Additionally, concern has been expressed that the minimum performance requirements in the NCC may not always reflect best practice.[40]

139. The Lacrosse case (mentioned earlier in this report) illustrates that compliance with the NCC is a facet of an architect’s professional conduct obligations. However, there is no evidence from tribunal decisions and case law to suggest that there is widespread non-compliance with the NCC by architects, nor that they are disinclined to comply. Indeed, some stakeholders consider that there may be a misplaced perception that compliance problems are more significant than they actually are, partly due to high-profile cases where the rectification costs have been significant, the UK Grenfell Tower disaster, and alarmist reporting within the media.[41]

140. In any case, BIM, which is considered in more detail later in this report, is regarded as a promising solution to address design quality issues. In particular, designers can use BIM to determine how well their designs comply with applicable requirements by implementing automated rule-checking in the design review process. Having said that, the breadth and complexity of rules are key challenges for successful BIM-based automated rule checking. Moreover, even though automated rule checking applications may effectively identify design compliance with rules, they may not be capable of providing appropriate recommendations in cases of non-compliance.[42]

There also appears to be cultural issues regarding regulatory compliance by some architects

141. Fisher and Guy (2009) suggest that architects may view regulations as inhibiting creativity or professional licence and that, at best, regulation is a necessary evil, but not central to the ethos and practice of design.[43] Anecdotally, the ARBV considers that there is evidence of a poor culture of compliance among some architects. Based on the ARBV’s experience, some architects believe that compliance with regulation is optional and may display dismissive behaviour towards the regulator. Similarly, data available to the NSW ARB suggests disengagement and ambivalence among some architects towards regulation. Both the ARBV and NSW ARB also have anecdotal evidence that architects may confuse the regulator with member organisations.

142. Nonetheless, the profession is very diverse, ranging from sole practitioners and small to medium-sized practices to multinational companies, so it is clearly inappropriate to make generalisations about the sector’s compliance culture. Indeed, complaints data indicates that there is variability in levels of professionalism within the sector, ranging from high to very low levels. Some architects do not manage time and costs well. Some architects even commit fraud, such as submission of false information to the regulator.

143. There is anecdotal evidence that university graduates and recently registered architects may have limited practical understanding of the NCC, although this is not borne out in the complaints data nor in tribunal and judicial cases involving architects. Assuming there is some basis for this anecdotal information, the complexity and ambiguity of certain aspects of the NCC could be at play, as well as the fact that the NCC is heavily text-based and may be difficult for new graduates with limited experience to understand in practical terms and apply.

144. Complaints data available to the ARBV and NSW ARB tends to indicate that experienced architects are no less likely to be non-compliant with the regulatory framework than other practitioners. The compliance culture among high risk practitioners could be exacerbated by market dynamics. Drane (2015) speaks of a ‘corrosive mix of private development, inappropriate D&C systems, a mercurial approach to delivery across the industry and the advent of private certification’.[44]

145. Comments made during confidential hearings before the NSW Public Accountability Committee in 2020 on the ‘Regulation of building standards, building quality and building disputes’[45] clearly reflect the toxic environment and hint at the challenges architects may face regarding regulatory compliance. The report notes the following:

• Architects being told by development managers that they are ‘good friends’ with the certifier and that the certifier can be ‘flexible’.
• Architects being directed by developers to not communicate at all with certifiers during construction of a building.
• Following the development application stage, the original architect working on the designs is ‘dumped’ and another office is given the project with the focus on only documenting work to ensure an occupancy certificate is issued.
• Architects preparing reports detailing concerns relating to the construction of their designs, however the developer takes no further action and claims that it is ‘too late to do anything about it’.
• Architects being threatened with legal action unless they sign a design verification statement, despite raising issues with the developer for months about the as-built design.

146. The Committee’s report suggests that the context is critically important in considering architects’ attitudes towards regulatory compliance. While the context does not obviate the need to comply with regulatory obligations, the report highlights that the current market environment needs to be considered in order to facilitate regulatory compliance by architects, as well as the other participants in the sector.

C. Findings

147. The apparent rise in building defects in Australia over time, particularly in the context of multi-storey residential buildings, is a cause for concern. However, at present, there is a lack of data establishing a clear correlation between building defects and design failures for which architects are responsible. As building defects rise, efforts to establish such a correlation are likely to increase.

148. It is incumbent on governments, industry bodies and regulators to probe this matter scientifically to determine whether there is, in fact, a linkage between rising building defects and design issues and, if so, to identify the root causes and the extent to which architects or other design practitioners are implicated. Common factors identified in the literature that could lead to inadequate design deliverables include time and cost pressures as well as unreasonable client demands and expectations. Those factors are prevalent in the context of D&C procurement models. This suggests that addressing the problems associated with D&C procurement must be a focus of attention.

149. On the matter of culture, there is no evidence to indicate that there is a general disinclination on the part of architects across the sector to comply with their regulatory obligation to exercise reasonable care in providing architectural services. Nevertheless, the ARBV and NSW ARB will continue to be vigilant in relation to those that may need support in complying, particularly in light of the complexity and challenges associated with complying with the NCC, and will take action against those that show disregard for their regulatory obligations.

D. Regulatory role

150. In assessing compliance with architects’ obligations to act with reasonable care in providing architectural services, the emphasis by the ARBV and NSW ARB is on the reasonableness of the actions of an architect in preparing and documenting a design, rather than the aesthetics of the design or other aspects of the design process that are within the discretion of the architect.

151. The role of the ARBV and NSW ARB also includes raising awareness among architects about the importance of good quality design and design documentation and the serious implications for clients, end-users and for architects if relevant professional standards obligations are not complied with.

152. Based on the available evidence, upskilling architects regarding compliance with the NCC should be a priority. Ongoing CPD could be used to educate architects in relation to areas of NCC compliance that are of particular concern.

E. Role of other stakeholders

153. Co-regulators in the construction sector could act in tandem to ensure that the core risk factors and entities responsible for building defects are clearly identified and targeted in a proportionate way so as to minimise the likelihood of defects materialising in practice.

154. Given the apparent challenges around compliance with the NCC, a stocktake of the education and training of graduates and architects on the NCC as they progress through their careers would be beneficial to determine whether there are any gaps and areas for improvement and enhancement of knowledge.

F. Implications and recommendations

G. Areas for further research

[1] See: https://www.theurbandeveloper.com/articles/out-of-court-settlement-reached-over-opal-tower.

[2] See: https://www.abc.net.au/news/2019-02-04/spencer-street-apartment-fire-melbourne/10776018.

[3] See: https://www.canberratimes.com.au/story/6317525/you-failed-us-elara-apartment-owners-compensation-plea/.

[4] N. Johnston & S. Reid, An Examination of Building Defects in Residential Multi-owned Properties (2019), at p. 21.

[5] Office of NSW Building Commissioner & Strata Community Association NSW, Construct NSW: Improving consumer confidence (2021), at p. 6.

[6] M. Sandanayake, W. Yang, N. Chhibba, & Z. Vrcelj, ‘Residential building defects investigation and mitigation – A comparative review in Victoria, Australia, for understanding the way forward’ (2021) Engineering, Construction and Architectural Management.

[7] Ibid. p. 21.

[8] The Centre for International Economics (prepared for the Australian Building Codes Board Economics), Building Confidence Report: A case for intervention (2021), at p. 18.

[9] Office of NSW Building Commissioner & Strata Community Association NSW, n. 173 above, p. 26. N. Johnston & S. Reid, n. 172 above, pp. 10, 22. S. Pamera & A. Gurmu, ‘Framework for building defects and their identification technologies: Case studies of domestic buildings in Melbourne, Australia’ (2020), The 54^th Conference of the Architectural Science Association, at 502. See also The Centre for International Economics, n. 176 above, p. 19.

[10] M. Sandanayake et al, n. 174 above, p. 11.

[11] The Centre for International Economics, n. 176 above, p. 20.

[12] See, for example, S. Pamera & A. Gurmu, n. 177 above, p. 502 which refers to a number of these studies.

[13] Ibid. p. 502.

[14] Ibid.

[15] O.M. Alomari, ‘Identification and Categorization of Building Defects’ (2022) 10(2) Civil Engineering and Architecture, pp. 438–46, at 441.

[16] Ibid. p. 444.

[17] W.-K. Chong & S.-P. Low, ‘Latent Building Defects: Causes and Design Strategies to Prevent Them’ (2006) 20(3) Journal of Performance of Constructed Facilities, pp. 213–21. See also N. Johnston & S. Reid, n. 172 above, p. 11.

[18] Allianz, Managing the new age of construction risk: 10 trends to watch as the sector builds back better (2021), at p. 5.

[19] R. Slater & A. Radford, ‘Perceptions in the Australian building industry of deficiencies in architects’ design documentation and the effects on project procurement’ (2012) 8(1) Australasian Journal of Construction Economics and Building, p. 23.

[20] V.P. Paton-Cole & A.A. Aibinu, ‘Construction Defects and Disputes in Low-Rise Residential Buildings’ (2021) 13(1) Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, p. 05020016, at 13.

[21] Clause 1 Victorian Code. Clause 4 NSW Code

[22] P.A. Tilley, S.L. McFallan, & S.N. Tucker, ‘Design and Documentation Quality and its Impact on the Construction Process’, in CIB W55 W65 Joint Triennial Symposium - Customer Satisfaction: A Focus for Research & Practice, P. Bowen & R. Hindle (eds.), 1999.

[23] Ibid.

[24] Ibid.

[25] R. Slater & A. Radford, n. 187 above.

[26] Ibid.

[27] Ibid.

[28] Association of Consulting Architects (WA), n. 50 above, p. 7.

[29] BIM and associated issues are discussed in more detail in Chapter 9 of the report (Automation, digitalisation and innovation).

[30] H.J. Koo & J.T. O’Connor, ‘Building information modeling as a tool for prevention of design defects’ (2021) Construction Innovation.

[31] P. Agbaxode, S. Dlamini, & E. Saghatforoush, ‘Design documentation quality influential variables in the construction sector’ (2021) 654(1) IOP Conference Series: Earth and Environmental Science, p. 012007, at 1.

[32] P. Shergold & B. Weir, Building Confidence: Improving the effectiveness of compliance and enforcement systems for the building and construction industry across Australia (2018), at p. 28.

[33] Ibid. p. 28.

[34] Ibid.

[35] The Centre for International Economics, n. 176 above, p. 2.

[36] A. Nwadike & S. Wilkinson, ‘Challenges facing building code compliance in New Zealand’ (2020) International Journal of Construction Management, pp. 1–11.

[37] J. Held, ‘A Question of Standards’, The Business of Architecture (12 September 2019) accessible at: https://aca.org.au/a-question-of-standards/.

[38] N. Johnston & S. Reid, n. 172 above, p. 44.

[39] Ibid. p. 44.

[40] Ibid. p. 59.

[41] The Centre for International Economics, n. 176 above, pp. 2–3.

[42] H.J. Koo & J.T. O’Connor, n. 198 above.

[43] J. Fischer & S. Guy, ‘Re-interpreting Regulations: Architects as Intermediaries for Low-carbon Buildings’ (2009) 46(12) Urban Studies, pp. 2577–94, at 2577–8.

[44] J. Drane, ‘Building Defects: How can they be avoided? A builder’s perspective’, in Strata Community Title Australia 21st Century 2015 Conference, (2015), at 10.

[45] NSW Parliament (Public Accountability Committee), Regulation of building standards, building quality and building disputes – Final Report, Report 6, April 2022, p. 20.