THE RENEWAL OF TRUST IN
RESIDENTIAL CONSTRUCTION
Commission of Inquiry into the Quality of
Condominium Construction in British Columbia
Submitted to the Lieutenant-Governor in Council
Government of British Columbia
by Dave Barrett, Commissioner
June 1998


Chapter One: The Problem Continued

II. What Has Gone Wrong?

"It turns out that our world class city is, in fact a world class disaster when it comes to the design and construction of condominium strata corporations. With shame, we must all admit it is a world class disgrace."

Gerry Fanaken, Vancouver Condominium Services

Recently, there has been a growing awareness of the sub-standard quality of residential housing construction in British Columbia, particularly in the robust economies of the major urban centres. The pace of economic expansion that has led to an excessive demand for qualified workers and developers, has also forced up land prices and has squeezed profit margins and affordability.

The frequency with which relatively new construction requires extensive building envelope and roofing renovations, has increased at an alarming rate. This cannot be explained simply by expansion. BC's urban centres, notably Vancouver and Victoria, are located in a geographic and climatic region most affected by mild weather and significant rainfall. These conditions increase the likelihood of water ingress, intensifying the process of rot. This helps to explain the frequency of building failures compared with other regions of Canada.

COASTAL CLIMATE OF BRITISH COLUMBIA

Map of Coastal Climate of British Columbia

Source: CMHC

However, climate and economic pressures do not account for the magnitude of the problem. When in Kelowna, the Commission was provided with examples of poor quality construction. This was also apparent through correspondence from other areas. While this is a province-wide issue, it is more severe in temperate, wet regions, with boom-and-bust growth cycles.

In addition to economic and climatic conditions, process and building science issues have led to a disintegration in the quality of construction. The building process has been undertaken in a largely unregulated, residential construction industry, driven to the lowest common denominator by ruthless, unstructured competition.

With respect to building science, public and private sector professionals, including developers, general contractors, builders, architects, engineers, and municipal inspectors, were either unaware of how to employ the appropriate technology, or deliberately failed to create appropriate building designs ensuring that construction was of adequate quality.

"Only when the entire outer cladding was removed, were the owners aware of the extent of water damage and the deficiencies that caused the damage. Deficiencies included poor quality materials, shoddy construction, incomplete details, improperly sloped balconies, poor joints, lack of proper flashings, etc. This was not just a stucco problem. Along one wall of the building, the reconstruction foreman noted that three different crews had built that wall with three different construction methods and materials."

Mizue Mori, Condo Owner

The financial institutions, mortgage guarantors, and warranty programs exacerbated the problem by underwriting mortgages and providing coverage to builders, without fully appreciating the magnitude of the risk.

 

The Building Process

The residential building process operates within a set of complex business relationships, statutes, and regulations. The Commission was presented with case after case of ineffective regulation regarding responsibility and accountability at each stage of the construction process. These included:

(i) an inability on the part of municipalities to effectively monitor building quality; to make certain inspectors play a meaningful role in ensuring building standards; or to enforce building codes;
(ii) a lack of provincial monitoring to ensure accurate interpretation of the building code, as well as its performance requirements;
(iii) a lack of developer, builder, and general contractor responsibility -- often facilitated through protective corporate structures;
(iv) architects who have been unable to maintain professional responsibility in translating designs into quality physical structures;
(v) engineers who have been unable to ensure their involvement in the process will lead to quality construction of the building envelope;
(vi) a lack of training, skills, and qualifications that have led to a deterioration in the quality of worker performance;
(vii) an inadequate home warranty program which, in the majority of cases, is faced with a conflict of interest between its service to the homeowner and its obligation to the developer;
(viii) a mortgage guarantee system which tends to serve the interests of the residential construction industry and financial institutions, without due regard to the consumer, who buys its services;
 (ix) a lack of information from the builder to the strata council; and
(x) a lack of understanding regarding roles and responsibilities of strata councils and management companies, leaving the homeowner confused and alone.

"Who is at fault? In the case of our development, the designer/developer, architect, engineer, building contractor, municipality ... and shoddy construction. Basically, all parties involved in the construction of our complex. Examples of damages include: piping installed still in its plastic wrap so water could not run through it, walkways, balconies, and cement eavestroughs sloped towards the walls, lack of or poorly positioned drainage pipes, building material not designed for a rainy climate, improper overhangs, dryer vents not vented to the exterior, numerous building code violations. The list is virtually endless."

Strata Council, Plan NW3235

Building Science

In addition to economic pressures, climatic conditions, and a systemic failure of the building process, building science also played a role in bringing about this crisis of confidence. The factors related to technology, or building science, include:

(i) a poorly interpreted building code;
(ii) municipal by-laws that can lead to inappropriate design, exacerbated by architects, who do not understand the implications of their designs;
(iii) the use of new materials without an understanding of how they will be affected by our climate;
(iv) a loss of collective memory, and lack of conventional wisdom, among inspectors, architects, engineers, developers, and contractors regarding the requirements for effective building; and
(v) ineffective communication and transfer of knowledge among the professionals and business people (who understand the issues), to others involved in the building process.

"The entire situation is a catch 22. The ignorant provide advice to the deluded and costly decisions are made. Each building envelope report proposes repairs and retrofits more exorbitant than the last. There is a continuous parade of engineers and contractors. Shoddy work is performed and the majority of the leaks continue. Contracting companies disappear. Warranties are either non-existent, not worth the paper on which they are written, or simply not pursued."

M. Chin Pang, Condo Owner

The importance of a healthy, well-constructed, housing sector to the overall physical, emotional, and financial well-being of British Columbia residents is significant. We cannot afford to have the problem persist and we must address the myriad of issues surrounding it. This must be done from two perspectives. These are to:

1. ensure that we never again build poor-quality housing; and
2. address the problems which have already been created, both in terms of effecting quality renovations, and in addressing the needs of people who have suffered financially.

The following section outlines the importance of the residential construction industry to BC's economy; the magnitude of the problem from both a private and public interest perspective; the legislative and regulatory framework; the operation of the industry; and the direction necessary to ensure the problems do not persist. Methods for mitigating the harm, already built into the system, are also recommended, along with a strategy for redressing the financial hardship faced by homeowners.

 

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Copyright © 1998: Government of the Province of British Columbia