Understand what it means to demolish and rebuild your leaky home through the FAP scheme.
Last updated: 21 March 2016
If you’re a homeowner repairing your leaky home under the Financial Assistance Package, this factsheet will help you to understand the role of designers, requirements affecting your repair plans and contributions, and how to manage the building project.
Your designer needs to be a licensed building practitioner (LBP), and may be able to help you with notable tasks in repairing your home, including:
- preparing the FAP repair plan and signing the FAP designer statement
- developing the building consent application and contract documentation
- procuring a building contractor, preparing the FAP payment plan and accepting a quote
- observing and administering the building contract, coordinating FAP milestone and final payment claims.
Some of the above non-design tasks can also be provided by other consultants, such as project managers.
Prepare the repair plan
Your assessor’s report will identify why water has penetrated your property and the extent of damage it has created.
You and your designer will need to understand the assessor’s report, including what the leaks are. Your repair plan will then need to show how the leaks will be fixed, and damage removed, and therefore how your home will be made weathertight.
It also needs to identify non-qualifying costs, such as betterment.
You should be aware that the repair described in the assessor’s report is based on a ‘like-for-like’ repair, which is a repair using similar-looking materials but intended to be weathertight.
A simple example is recladding using a similar cladding type, but installed on a drained cavity. In turn, the estimate in your assessor’s report is based on the same like-for-like repairs.
The repair plan will consist of drawings and other documentation required to fully identify the scope of work. The drawings do not necessarily need to be as detailed as those required for building consent.
All proposed repair work must comply with the New Zealand Building Code. The repair plan may propose a repair that is not like-for-like, but this has implications for determining your contributions under the FAP.
Repair work for your repair plan
Work that qualifies for contributions
You and your designer should use the repair scope in your assessor’s report as a guide for repairs and any financial contributions.
Financial contributions will be based on the cost of carrying out each repair item up to the value of like-for-like repairs.
Your designer does not have to propose like-for-like repairs, but contributions will be limited to the value of a like-for-like repair.
Repair work that qualifies for contributions includes the repair of deficiencies and replacement of damaged materials, including items such as:
- replacing damaged claddings, building wrap, and insulation to match the original construction (but rectifying weathertightness deficiencies)
- providing a cavity to the replaced cladding where it is recommended by the risk matrix of E2/AS1
- replacing decayed timber framing with suitably treated timber
- applying on-site treatment to sound untreated framing exposed during the works
- adding flashings or replacing defective flashings to make the building weathertight
- consequential work needed:
- disconnection and reconnection of electrical services within wall frame
- disconnection and reconnection of plumbing services within wall frame
- reinstatement of linings, finishes, fittings, floor coverings
Any additional costs may be betterment.
Betterment factsheet will help you to understand what counts as betterment.
Adjusting the repair scope
In the repair plan, you and your designer have an opportunity to submit any factual information to indicate it is necessary to adjust the repair scope described in your assessor’s report.
Your designer may propose a reduced scope of repairs. It could demonstrate:
- the reduced cost proposal will still repair all of the deficiencies
- evidence showing the extent of defects and damage is less than that identified in your assessor’s report.
Your designer may also propose a greater scope of repairs. This could happen when:
- evidence shows the extent of defects and damage is greater than that identified in your assessor’s report
- it is not practicable to carry out repairs as described by the assessor.
Where compelling evidence cannot be provided, the additional scope of work will be regarded as betterment.
Unfunded repair costs
Sometimes you may be required to repair some weathertightness damage without cost contributions.
Approved repairs and costs factsheet gives an example of unfunded repair costs.
Demolition and rebuild
You are also free to choose to demolish and rebuild your home under the FAP as a repair option.
Your designer needs to sign a designer statement which you will be required to submit with the repair plan. The statement must:
- confirm the design will resolve the weathertight issues identified in the assessor’s report
- confirm the proposed work will satisfy the requirements of the New Zealand Building Code
- confirm the designer has identified and recorded any aspects of the design that are betterment.
You can give your designer a copy of the statement, or let them know where to download it.
Repair plan review
We will review the repair plan after you have submitted it. This may result in one of the following outcomes:
- A repair plan may be approved as submitted – with agreement to both repair scope and extent of betterment.
- A repair plan may be approved subject to conditions (such as conditions to repair an item that was omitted or unclear within the repair plan).
- If you do not accept the proposed conditions, you won’t qualify for FAP. This may mean you need to revise your repair plan.
- A common outcome is approval subject to you agreeing on the list of betterment items identified by MBIE (where MBIE identifies more betterment items than the designer).
- If you do not accept MBIE’s list of betterment items, you’ll need to submit a new repair plan where all betterment is identified to MBIE’s satisfaction.
- If you would like MBIE to consider evidence showing an item is not betterment, this may be included in the new repair plan submission.
- MBIE may list a change in repair scope as betterment where it is not easy to determine whether the change will increase costs. You will have the opportunity for your builder to show the cost of the change later (supported by calculations).
Declined repair plans must be revised and a new repair plan submitted.
Your designer will need to prepare documentation for building consent, tendering, and construction.
This must be based on your approved repair plan so that all deficiencies are repaired in the manner agreed by MBIE, with no change to betterment.
A building consent must be obtained in the same manner as a project that is not part of the FAP process.
Where the council is acting as MBIE’s agent, you will need to provide them with a copy of the Territorial Authority’s Building Consent Statement Form. Your council will sign it when your building consent is approved to confirm the scope of the consent matches the approved repair scope.
Your claims advisor will let you know when this form is required.
Most councils are contracted to MBIE to provide FAP services such as review of repair plans and inspection of repair work at the milestone points (separate to their inspections as building consent authorities).
Procuring your building contractor
You will need a building contractor (contractor)who is prepared to build under the requirements of the FAP scheme. They will provide you with a quote which is their formal offer of work.
Your designer can help you prepare documents to procure a contractor. A common method to do this is tendering to three or more potential contractors. These procurement documents (known as ‘tender documents’ if you’re tendering) should include:
- the drawings and specifications describing the proposed work
- the conditions of contract, including:
- The structure and form of the building contact such as ‘fixed price’ under NZS3902.
- A copy of the repair plan approval letter from MBIE.
- Whether any ‘additional contributions’ are being made by the contractor.
- Whether the contractor or someone else will need to separate the cost of betterment in the payment plan application.
- That the contractor will need to provide expected completion dates for construction milestones.
- That the contractor will need to provide unit cost rates for certain works (like replacing timber) and labour rates for the various trade contractors. This allows the cost of any changes to be easily calculated.
The scope of the tendered work must match the scope of work agreed in the repair plan.
Your contractor must complete MBIE’s contractor statement form. You can ask them fill it out, or print it and give it to them.
Note that you are not obliged to accept the lowest quote offered to you. That said, if your costs are considered unreasonably high, your FAP contributions may be adjusted accordingly. This will be determined in the payment plan application.
View and download the Contractor’s statement form.
Payment plan application
Your designer may assist you in completing the payment plan application. This must include details of all aspects of the expected costs of the project, including the information from the preferred contractor.
Once you have firm costs from your preferred contractor, and other providers like designers, you can submit the payment plan to MBIE.
Contract management and FAP milestones
Contract administration and site observation roles for your designer will be as for any building contract.
There will however be some additional inspections carried out by MBIE through a contractor, who may be the council (not acting as the building consent authority) or an independent assessor.
These inspections, should they be required, will be carried out at the payment milestones, which (for projects requiring a full re-clad) will normally be set at:
- scaffolding set up and cladding removed – this is when the timber remediation statement inspection takes place
- timber replaced or remediation complete
- re-cladding complete
- code compliance certificate issued.
Your designer (if undertaking contract administration and site observation) may attend any of these inspections.
When your cladding is removed, MBIE’s contractor will inspect and measure the timber to be replaced (along with other affected components).
This is often also a milestone where you can receive an FAP payment. Your designer (or whoever is managing your repairs) will often observe these inspections.
It should be noted that the inspections are provided free of charge by MBIE, so if the same inspection service is provided by one of your privately-engaged team, the associated fee may not qualify for contributions.
These inspections are to record the actual extent of damage and allow the actual cost of timber remediation to be determined. ‘Timber remediation’ is a broad term which also covers the consequential works, such as relining, recladding, finishing and sometimes works to fittings and fixtures in rooms like kitchens and bathrooms.
Because the full extent is usually unknown beforehand, it is typically provisionally allowed for, both in building contracts and similarly in FAP payment plans. Hence the need to measure the actual extent once the building is fully exposed, to then calculate the actual cost.
The measurement of damage (and affected components) will be recorded on a Timber Remediation Statement. This in turn will enable the related cost to be calculated, and is normally done as part of submitting your final claim, once repairs are complete. Your interim milestone payments do not need to change until then.
Major cost increases during repair
During construction, if repair costs increase to the point where your affordability is at risk, discuss the situation with your claims advisor. A Change Request may be required.
If agreed to, a change request will amend your payment plan and increase your remaining milestone payments.
Minor increases in cost that don’t affect affordability can be resolved in the final claim.
Final payment claim factsheet has more information.
At the final payment claim, your designer or project manager will need to provide all documentation, including a detailed breakdown of costs, to enable the final payment to be calculated.
This will largely involve adjusting provisional allowances to reflect their actual costs (see timber remediation above).