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


Executive Summary

A Commission of Inquiry into the Quality of Condominium Construction in British Columbia was appointed by the Minister of Municipal Affairs, through an Order in Council, on April 17, 1998 to review the adequacy of protection, and accountability to, consumers for faulty condominium construction, and to determine the reasons for, and the factors contributing to, faulty construction. The Commission was also asked to recommend any measures needed to ensure consumer protection and accountability for this construction.

The majority of the material presented in this report is a result of the extensive public hearings and numerous written submissions received by the Commission during late April and May 1999. In all, there were 29 sessions of public hearings held in Vancouver, Surrey, Victoria, Nanaimo and Kelowna. Presentations were made by condominium owners, strata council representatives as well as individuals, and groups involved in various public and private sector aspects of the industry. In total, more than 730 written submissions were received. In addition, the Commission reviewed existing legislation, public and private reports, and the approaches of other jurisdictions regarding effective residential construction activity.

Residential construction, during the past fifteen years, has become. an industry dependent more upon business finesse and marketing techniques, than on down-to-earth building basics. The nature of the industry has changed, as have the relationships within it, Architects, builders, financial institutions, warrantors, and even media coverage reflect this trend by focusing more on the marketing and design issues of residential real estate than on the substantive issues of building quality, workmanship, long term performance, and technical merit.

In an earlier time, "multi-family" meant large apartment buildings, constructed by specialists who, in turn, sold to a single buyer, specializing in the purchase of large structures. The advent of the condominium form of ownership has created a unique problem in market relationships. Condominium purchasers, who thought they were buying a home, have come to understand they were purchasing an ownership right in a large, and somewhat complex, building.

Developers, were rarely involved in commercial building activity, and therefore, inexperienced in the demands of that market place. They did not know -- or did not care to know -- the requirements to ensure these buildings maintained the same integrity demanded of the commercial market place. When a multi-million dollar project was sold, involving one seller and one buyer, there was a relationship between these parties, which was much more professional and equitable. Problems of quality construction were more readily identifiable and more effectively remedied. However, in the enthusiasm of rapid residential development, and the absence of effective regulation, the basics of building and attention to internal quality, gave way to the glamour of exterior design and lifestyle marketing.

On the basis of the submissions and presentations, the Commission has come to the following conclusions:

The pace of economic expansion in much of the Lower Mainland, during the 1980s and 1990s, has led to an excessive demand for development professionals and qualified workers. This has forced up land prices, and squeezed profit margins and affordability. BC's urban centres, notably Vancouver and Victoria, are located in a geographic and climatic region most affected by significant rainfall and mild weather. These conditions increase the likelihood of water ingress, intensifying the process of wood rot.

However, climate and economic pressures do not account for the magnitude of the problem. The residential building process and building science issues have led to a disintegration in the quality of construction.

1. 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 ensure inspectors play a meaningful role in maintaining building standards and in enforcing 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 to facilitate its responsibilities; and
(x)  a lack of understanding as to the roles and responsibilities of strata councils and management companies, which has often left the homeowner confused and alone.

2. 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 importance of a healthy, well-constructed, housing sector to the overall physical, emotional, and financial well-being of British Columbia's 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 Commission recommends a Homeowner Protection Act be enacted to establish the Homeowner Protection Office, responsible for consumer protection, the quality of residential construction, research and education, and the creation of a Reconstruction Fund to assist homeowners most in need of financial support.

 

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The printed version remains the official version.

Copyright © 1998: Government of the Province of British Columbia