BSA Decision, September 2022:
A Fair Go story which ran a year ago on September 21, about a house build which had taken seven years to complete, was found to breach Accuracy and Fairness standards.
The BSA found the programme was misleading on three points.
- Firstly it found while the story did acknowledge there were many contributors to the project delay, it focused attention and responsibility for the delay on the building company New Homes Direct, and didn’t provide viewers with information necessary to understand the impact of other factors.
- It misrepresented the builder’s responsibility for outstanding Council invoices.
- The story didn’t clarify the price variation of the build occurred in 2016, in fairly unique circumstances, or that the builder hadn’t asked for further variations to cover increased costs.
The BSA also found fairness was breached as these issues contributed to an unfair depiction of New Homes Direct and its director, Michael Morrison, and Morrison’s comments were not fairly depicted. In addition the story unfairly:
- suggested the builder (i) had been paid to take care of certain costs and (ii) deliberately caused delays to charge more
- included no mention of the builder’s positive contributions (including absorbing costs after the 2016 price variation)
- included comments from a former employee, described as ‘disgruntled, and rightly so’, without a specific response from the builder when Fair Go was aware of significant grievances between the builder and the employee.
The BSA ordered this statement be broadcast on Fair Go, attached to the online story and costs of $2098.70 be paid to the complainant and $1000 to the Crown.
A full copy of the BSA’s decision is available here
Fair Go story, September 2021:
Five weeks of delay getting a kitchen renovation finished due to the lockdown probably sounds and feels like a hardship, but for Rob and Glennis Thompson, that sort of delay would be nothing.
They signed up and paid a deposit to get a house built in 2013 and only got the final tick from the council last week to say it’s complete, thanks to Fair Go.
“I love it but it's been really hard,” says Glennis, fighting back tears.
“It's been a hard, long road, we’re just about at the end,” says Rob, stepping in.
“I don't want somebody else to go through this.”
The pair had sold their home in West Auckland and signed a contract with New Homes Direct Ltd to design and build their retirement nest in Parakai, near Kaipara Harbour.
It was meant to be a downsize to relieve stress; instead they’ve headed into their golden years with mounting debts as the process has dragged out.
The developer denies fault.
“It was nothing to do with us. There was significant Council delays,” says Michael Morrison, owner and manager at New Homes Direct.
However it is evident New Homes Direct took 15 months to obtain a building consent.
Then Auckland Council identified a flooding risk which added years of delay.
Once all that was settled, New Homes Direct bumped up the price because costs had escalated in the years since the contract was first signed.
“To me, it was like a self-fulfilling prophecy; if you take too long, you get to put the price up,’ says Rob.
It’s called cost risk and has always been a problem, now made worse by Covid-19 lockdowns, shortages of building materials and fierce competition to find good tradies.
“The most common mistake is that homeowners don't understand when delays arise and or additional costs arise, who is responsible for them,” says building contract lawyer Prue Miller.
By law, any building contract worth more than $30,000 must contain a start date and expected completion date so that delays can be measured.
Prue Miller suggests it is also wise to spell out who will be responsible for overruns and other unexpected costs so that there’s clear agreement before anyone signs anything.
The Thompson’s engaged a lawyer to review the contract but ignored their advice to not sign a variation and increase in costs.
Michael Morrison then submitted a Start of Works Notice that estimated four months to build but after two years it still wasn’t finished and the file was “refused” – the consent to build lapsed and an extension was required.
“This is the building works; it doesn’t include stoppages. I’m not in charge of weather, I’m not in charge of the Council, I’m not in charge of a whole bunch of stuff,” explains Morrison.
The couple was watching as a house down the street made rapid progress from a half-built stage – a property that belonged to Morrison.
The Thompson’s were already summoning the courage to say haere rā to the developer they’d hired to build their home, when the head builder gave a surprising warning to be wary of promises the build would soon be done – shortly before he was fired by New Homes Direct.
“I’d started their job in June 2018 and I realised the house had been sitting there 15 months, full of water, half-finished, kind of half a shell. I just felt sorry for these people.
"They’re on a journey going nowhere, being told you’ll be in by Christmas, but which Christmas?”
This final straw coincided with a stroke of luck for the couple - their daughter’s friend moved by their plight offered to pay for his lawyer to help them cancel the contract and they took the out.
That left them scrambling to track down all the tradies who had ever touched their build and obtain a record of all the work done because Morrison now argued New Homes Direct no longer had any contractual obligation to complete that job of putting the paperwork into the Council.
The parting shot was finding unpaid bills for their consents that went back so long, some had been sent to debt collectors.
“The unpaid invoices sent to New Homes Direct date back to 2014. Despite the Council allowing processing of the application and inspections to progress so that work on site could continue, the costs were never paid by the developer," says Craig Hobbs, Director Regulatory Services at Auckland Council.
"Unfortunately, both Auckland Council and the property owner have now been left out of pocket due to the developer’s non-payment.”
The trouble was the couple had recently been told they would have to pay more than $4,000 in current and overdue fees before the Council would issue the crucial Code Compliance Certificate, verifying the building was complete and built to code.
“We paid Michael $40,000 for consenting and design, so it was a slap in the face, spurred me to want to get in touch with you guys,” Rob told Fair Go.
The developer insists he knew nothing – it is true the couple hadn’t raised it with him before alerting Fair Go.
“If there is any money owed I’ll pay it, for works that we’ve been paid for, of course,” says Michael Morrison.
After Fair Go got involved, the developer paid two overdue invoices within a week, but by then the Council had already agreed it would not hold up the couple’s CCC as long as they paid the current charge of around $1200, which is all the Thompsons had thought they’d owed.
“I’m over the moon,” Rob Thompson told Fair Go after paying his fair share and getting the CCC issued within minutes. “It’s like I can breathe again.”
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