Reputation: The new risk in the construction industry
The construction boom and an increase in high profile construction failures has raised the question, “are all builders created equal?”
The construction industry It has also triggered a raft of new legislation which provides powerful new consumer protection.
The Duty of Care law enacted this year enables owners a guaranteed period after construction is completed, to report major defects and fairly wide reaching powers to have them resolved.
New Legislative Power for Consumers
Defects are a fact of life in construction. However, major defects are fairly rare.
Still, high profile cases like the Opal and Mascot Towers debacles are top of mind with many consumers.
According to Deakin University research:
- 85% of all new residential apartment buildings have at least one major defect across multiple locations
- In NSW the rate was higher at 97%
However, it’s those minor defects that crop up post-construction that are far more typical. By contrast, and based on DLP Manager data:
- 150 minor defects / month in the post-construction period
- 14 major defects detected in first 6 year period
One of the reasons smaller defects are more plentiful, is sheer volume. There are more of them as they’re small. Also, they could be endemic, or snowball (a faulty tap washer might be present in each unit of a building, for example).
But moreover, owners have a Defect Liability Period over several months – in which to identify and have resolved any minor defects.
And in light this environment, they are highly motivated to do so.
Most owners are very proactive during their defect period – spotting the myriad of small, often subjective defects – and working with the builder to have any issues rectified.
A Builder Pain Point
The process that follows is a paint point for many builders, consuming resources that could be spending time on new projects (opportunity cost).
Generally, this duty falls to the administrative staff, who are untrained, and under prepared to deal with the numerous stakeholders – armed with nothing more than an Excel spread sheet.
If this process is not handled properly, it can damage the reputations of both builder and developer, as these occur at the coalface of the customer experience.
In 2020, the better builders and developers are taking this as an opportunity to create genuine brand differentiation by improving their processes and controls.
Responsive builders build a reputation
Companies like Probuild, have been working with DLP Manager to secure a top spot as a responsive builder and quality brand name in the industry.
“With DLP managing our contractual post-construction responsibilities, we were able to move our construction team away to the next job,” said John Rusak, Construction Director at Probuild, “and we trust DLP and their team of specialist defect managers to manage the client’s expectations of the new rectification issues that arise.”
Ultimately, the consumer is now in the driver’s seat. And it is up to the industry to be on the front foot to build their reputation with every project they undertake.