Could the ability to opt out of the requirement to appoint an Assigned Certifier affect market value, and what other consequences does the Amendment to Building Regulations bring? NOEL LARKIN has some thoughts.

opt out

It is now just over one month since the passing of the amendment to the Building Control (Amendment) Regulations (BCAR), which allows an option to opt out of the need to appoint an Assigned Certifier (AC)/Design Certifier (DC), and of the requirement to have staged inspections of one-off houses and extensions.
Early indications from local authorities show that, following a dramatic drop-off in the submission of commencement notices pending the introduction of the opt out, there has been a resurgence of submissions since September 1.
Current figures, at this early stage, show a very significant nine out of ten new single dwelling owners choosing the opt out route. This comes in spite of strong opposition to the reduced level of oversight voiced by the Society of Chartered Surveyors Ireland (SCSI) and The Royal Institute of the Architects of Ireland (RIAI), whose registered members come under the Act. The Institution of Engineers Ireland (IEI), whose chartered members can also be appointed to the AC/DC role, has also voiced concern.

Issues and implications
The removal of the obligation to appoint an AC/DC shows the strength of opposition to the requirement, and the apparent power of representation with a general election looming. So what are the issues associated with the non-appointment of an AC?
The regulations require that builders give an undertaking that they will execute the works in accordance with the Building Regulations. However, the requirement to meet Building Regulations has always been in place since their introduction in 1992. We are all well aware of the pitiful legacy of a self-regulated building industry.
There are, however, indications that some lending institutions are holding a strong line. It is reported that they are insisting on compliance with the more stringent requirement to appoint an AC and provide appropriate certification before they will allow draw down of funds. This reinforces the view that there is indeed a risk associated with the opt out route.
It would be helpful if one could compare two identical completed properties, one with the benefit of full certification under the BCAR and the second constructed under the opt out route. If history guides us, we can be certain that there will be issues of significant non-compliance presented in the ‘non-BCAR’ property. In my experience, these issues can range from significant non-compliance in terms of fire precautions and means of escape, to more typical non-compliance issues such as incorrectly spaced guarding to staircases, non-toughened low level glass, low head height over staircases, damaged radon barriers, inadequate ventilation, poorly fitted insulation, incorrectly installed wastewater treatment systems, and the like. It can be perceived therefore that there is an element of additional risk associated with the non-BCAR property. This risk may result in a negative impact in terms of safety and structural integrity, and a reduction in property value. The negative impact on value could be equated to the cost of correcting known or identified issues of non-compliance, but the risk of hidden defects remains.
The one-off dwelling owner may not be over concerned with market value, but his lending institution certainly may be. Circumstances change and it is not untypical for a one-off dwelling to eventually come to the market, and any future purchaser will need reassurance in terms of compliance. The potential difference in market value may outweigh the cost of appointing an AC at the outset.

There are, however, indications that some lending institutions are holding a strong line. It is reported that they are insisting on compliance with the more stringent requirement to appoint an AC and provide appropriate certification before they will allow draw down of funds. This reinforces the view that there is indeed a risk associated with the opt out route.

No way out
It is important to note that once the property is registered under the opt out provision of the Regulations, there is no recourse at a later date. Therefore, full certification under the Building Regulations will not be possible. It is as yet unclear how conveyancing solicitors will deal with the new regime and if certificates of ‘substantial compliance’ would satisfy them in terms of compliance with the regulations. Professionals will be unable to go beyond confirming ‘substantial compliance’ if they have not been involved in the project.
Builders still have to provide an undertaking that they will carry out the works in accordance with the Regulations. There is no requirement, however, for a completion certificate. This may require that they put in place suitable professional indemnity or latent defects insurance as adequate consumer protection. Feedback from contractors suggests that they are requesting considerable additional information in terms of specifications and details from prospective clients. They may still resist what could be perceived as significant additional liability.
The responsibility for ensuring that a property is constructed in accordance with Building Regulations lies with the building’s owner, those who build and those who commission construction works. The absence of oversight and monitoring to the level required by an AC may mean that opt out projects are considered more high risk by the local authority. These houses may be prioritised for inspection by officers of the authority. The legal consequences of non-compliance can then become a significant burden for the property owner.

Regressive
Every building is different. Reliance on those who have traditional skills and knowledge does not appear on the face of it to be unreasonable. However, the absence of any monitoring of works by a construction professional can result in a soft approach when it comes to compliance. This can lead to non-compliance and risk. Risk can be present in terms of the safety of the occupants and risk to the property’s value. Appointment of a DC and AC will substantially reduce this risk. Inspection and oversight ensures that our properties are constructed in a safe and compliant manner. The regressive ability to opt out is an unwelcome throwback to a failed system.

Noel Larkin

Noel Larkin MSCSI MRICS
Noel is a Chartered Building Surveyor with Noel Larkin & Associates.