Two-tier Housing Market

It is surprising that the changes to the Building Control (Amendment) Regulations 2014 (BCAR) have been brought in less than two years after the introduction of the requirement for mandatory certification. The changes provide that new single dwellings on a single-unit development will not be the subject of the mandatory certification requirements. An owner can formally opt out of the BCAR inspection and certification requirements by filing a declaration of intention to opt out of the certification procedure at the same time as filing a commencement notice.

Concerns
The main concern we have with the opt out provision is that it will potentially create a ‘two-tier’ housing market, as there will be two forms of certification depending on whether a party has opted out, and for lawyers it is difficult to assess how to view this on a subsequent sale of the property.
For lawyers and other professionals who are not involved in the construction process it is difficult to advise on the standard of construction achieved. BCAR took this requirement out of our hands. Where there is such a gap, our experience is that parties will insist on the higher standard being adopted. The advice to a client when they buy a property is “the day you buy is the day you sell”, and subsequent purchasers may have genuine concerns if a property has opted out of the certificate procedure that the quality of work has been carried out to a lesser standard. It is too early to say, but much will depend on the attitude of lending institutions when giving loans on residential property.
If there are mandatory requirements from banks insisting that to get a loan a property does not opt out of the BCAR regime, then that will have a significant impact and will affect how subsequent buyers view a property. It will be interesting to see the attitude of HomeBond and other parties who provide insurance cover for purchasers of new property. Many have found out in the last few years that retrospective surveys or inspections are not a viable way to assess the standard of work, as they are costly, can involve opening up works or intrusive surveys, and are very rarely definitive or conclusive.

New regime
Clearly in the case of domestic extensions there are reasonable arguments that they should be excluded from the BCAR requirements, and let us hope that such extensions do not get caught up in difficulties as a result of the new regime.
Also, we need to see if Minister Kelly, or whoever the new minister in charge of this area after the general election will be, introduces a new local authority inspection procedure, and how this differentiates between properties that have and have not opted out.
It is too early to say at this stage but it is clear that the new two-tier system could be fraught with difficulties if an effective independent inspection process is not introduced.

Mark Walsh

Mark Walsh
Mark is a Partner with Eugene F. Collins solicitors