In regards to Landmark Homes Auckland South & Franklin (formerly known as...

A few questions if I may : Will you commit that the standard building contract you use will be a fair and balanced contract? 2) Will you give realistic time frames to potential home owners of how long things will take from start to finish backed by good project management? 3) Will you make minimal use of PC sums and where they are needed they will be realistically priced based on the standard of build the client is expecting? 4) You will work in good faith where there are any disputes? 5) Any variations will be communicated early and be transparent? Regards James

Hi James, I totally understand where you’re coming from on this, and it will be interesting to see whether Collen replies at all, and if so how. But I assume you’re writing some of this stuff more in hope than expectation, because you (and many others) have been taken advantage of by other builders. Regarding some of your points, I guess no builder will admit that their contract is not ‘fair and balanced’. So no matter what the reply, clients must get it checked by someone who knows what they’re doing before handing over any money to a builder. Although most builders will resist it tooth and nail, in my view every building contract should state a specific completion date, with liquidated damages (ie a reasonable estimate of the client’s loss) for each day it is late. Of course this is made more complicated if the build process includes things like getting Council approval, and it means having a clause in the contract to allow for time extensions for delays outside the builder’s control. But this kind of thing is quite feasible, and in fact standard on larger construction contracts. It is not without room for discussion (argument) on the exact amount of time extension, but at least it prevents a builder from dragging a build out indefinitely, simply because they prefer to work on another project. I’ve written before about PC (Prime Cost) sums. In my view these are fine, but should only be used for things where the client gets to choose the standard put in the house. So I think it is up to the client to use due diligence before signing the contract, to decide whether the amount is enough to get what they want. If you see a PC sum of $10K for a kitchen you can guess it’s not going to be top German stuff. Provisional sums/quantities are different, and used for things like excavating unsuitable material or putting in piles under a foundation. These are costs that a builder may genuinely not be able to accurately assess before signing the contract. I would suggest that anyone not experienced in the building industry should get expert advice on these before signing the contract. Or at least get a breakdown of how the builder arrived at his figure (hours/quantities/rates), and how the figure would be re-calculated if there are changes after the work starts. Of course we all hope everyone involved will act in good faith. But just in case they don’t then the exact disputes process, and procedure for handling variations, needs to be clearly stated in the contract. It should go without saying that if a builder is uncooperative or unwilling to discuss any of the above in a reasonable manner, then in my view you should just walk away.

Dear James, When Michael and I decided to go into business we took our time selecting the correct business to own. We chose Landmark because they represented the best fit with our personal commitment to quality and customer satisfaction. We believe that our standard contract which is endorsed by the Master Builders Association is indeed fair but as stated elsewhere on the blog this is a major purchase so always get your lawyer to review in advance of signing. Regarding points 2-5 that is simply the correct way for things to be done in a building project, and that is how we operate. All the best James and please feel free to drop into our new office at any opportunity to meet us face to face. We would love to deliver you a great home and a great experience. Regards Colleen

Aside from the contractual and PC sums issues it would be nice for Colleen to comment on the physical building side of their franchise. Such as, will there be one dedicated licensed builder on each build that regularly visits and overseas the build and is this the person the same one who will sign off the Record of Works? If this licensed builder is to supervise restricted building work and not do this work themselves then the question needs to be asked how often will they visit the site? Many franchise companies only have one licensed builder on their books and if you have several builds on the go at the same time often the visits are not frequent enough and in my experience, one you have a problem or the workmanship is poor, it takes more money and time to find and rectify the problem if it’s not caught early on in the process which will delay the whole build and potentially end up costing the client more money. Will you be using stubbies, and if so who will they be and what will they be doing? Who do they answer to if their work is incorrect or substandard? How many hammer hands vs skilled builders (not necessarily licensed builders) will be allocated to each build? Again, many franchises try to keep their costs down by using mainly hammer hands who are cheaper to employ and the end result is often very poor workmanship which is harder for the client to seek remedial work or costs for as each franchise has their own interpretation of what good workmanship is and arguing this costs thousands in legal fees if you should find yourself in this position. The LBPB and the Council will not help you should it come to defining poor workmanship so supervision and accountability are all the client has to safeguard themselves against this. I think we will all be waiting with baited breath for her reply to all our questions.

Hi Chris, I hope my reply to James above adequately answers his queries. I can confirm that we will act in good faith and look forward to growing the business and gaining people’s trust. Whilst we can’t turn back the clock as to what may have happened previously with this area we do hope that we can show in our actions and business acumen that we will be building quality homes and will have our clients best interest at heart. When entering a building contract we do strongly encourage our clients to seek independent legal advice and will always address any concerns at that point in the process. Regards, Colleen

Hi Colleen, Are you willing to make changes to your Master Build endorsed contract? Delete clauses a client and their lawyer may seem unduly biased towards in your favour or add clauses a client has been recommended by his lawyer to have? I don’t know how much of this blog you’ve read but there are hundreds of poor people here who have had very negative dealings with Master Builders and their contracts are top of the list of complaints, along with their famous guarantee. Many of the skilled and successful builders I know of have cut ties completely with Master Builders and it has not negatively impacted their business at all, in fact it seems to be a positive thing given Master Builders current reputation. As for clarifying my previous comment, the building company who built the non-consented house employed subbie carpenters, and still do to this day along with many other Franchise building companies that I know of. They have only one licensed builder on their staff payroll who puts his name to a ROW without even visiting the site in some instances because there is so much work out there at the moment, I doubt the trusting fool actually has the time. The client often has no idea that this is the case and when it goes wrong, and you find yourself at an LBPB hearing with the builder who signed off the ROW, he gets thrown under the bus by the building company he was working for and they employ someone else when his licence is suspended or revoked even though every decision to employ subbies was made by the business owners. The business owners therefore remain untainted. Or in the case of my friend, the LB walked away clean and was not found accountable for anything. Because the building company did not specify it was using subbie carpenters, there is no name or any way to find out who the LB on site actually was so he can’t take disciplinary action here either. The building company are not forthcoming giving his name either and to fight this as well as the LBPB is not financially viable for my friend nor does he need the added stress. Which is why I asked you what subbies you use and who are they? Along with my questions regarding hammer hands vs skilled builders, supervision on your builds and what part you play in the management of the build. Most of us here will dissuade people from using franchises because of this. There is almost no accountability for errors made on the part of the Franchise owner and your head office have no legal obligation to step in and make things right and more often than not they never do. If you chose to use this forum to promote your Franchise it may be worth your while to be as transparent as possible. I look forward to your reply.

Maybe Kelly (who posts stuff on this blog often) could weigh in with her experiences of insurance and finance issues too? Then I think all the bases are covered as to how Colleen Walters and her husband are going to turn that franchise around as it does not have a very good reputation at all.

Hi MJ, I’d like to come in on this one again. All good questions about how many qualified/skilled builders will be working on the job, or at least how often they will visit the site. Perhaps a bit difficult to pin down in the contract. I guess you could ask the builder to name the people they intend to use. The good/honest ones will tell you the truth. The others will always have some excuse as to why their promise is no longer possible (he resigned, got sick, too busy etc etc). I think this is where due diligence comes in again, and the need to look at as many of the builder’s previous builds as possible, and talk to previous or current clients, to judge whether the standard of workmanship is acceptable to you. Regarding the point about sub-contractors, I guess virtually all NZ builders use them for some or all of various specialist jobs like excavation, concreting, drainage, roofing, joinery, electrical, plumbing, kitchens, tiling, bricklaying, flooring, painting etc etc. And in some ways that’s a good thing, because each subbie should be more skilled at his trade than a general builder. But the essential thing is that every contract should contain a clause to make it clear that the main builder (ie the one you sign the contract with) is contractually entirely responsible for all aspects of the subbie’s work (giving instructions, providing necessary access and assistance, workmanship, progress/delays, payments etc) as though it were his own workers. Take no excuses that this is in some way ‘unfair’ on the builder. It’s their choice to use a subbie, so they need to choose them wisely. Any builder who thinks it’s too hard on them has no experience of how the building industry is supposed to function in the real world. It follows from this that the client should resist the temptation to get involved in any discussions with a subbie (or in fact any worker on the site) that might be interpreted as giving them an instruction, especially one that might be considered a Variation. All instructions should be given by the builder’s Project Manager, so the builder is fully responsible for everything that happens on the site.

Hi MJ, Thanks for your comments and I do understand your concerns around franchise companies that have several builds on the go at the same time and at times don’t visit the site as frequently as desired. We have been very selective in the sub-contractors we have brought on board and have complete faith in their workmanship and attention to detail. The role of a Project Manager/Construction Manager is to manage the project closely and vet the work done by sub-contractors and like you validly point out if there is a problem that occurs pick it up early and move forward with a solution/remedy. Again I can’t comment on what other builders/franchise company’s do but I can say that we do work with very reputable companies as at the end of the day if their work is sub standard then this reflects poorly on Landmark Homes. At our pre-construction meeting with the client we are more than happy to disclose the sub-contractors who will be working on their site if requested and address any issues that may arise at that point, we will always strive for open and honest communication with our clients. Regards, Colleen

Hi MJ, Again well said. All valid points. In her reply to me Colleen said ‘When entering a building contract we do strongly encourage our clients to seek independent legal advice and will always address any concerns.’, and I guess there would be no point in saying that (and the legal advice would be a waste of money) if they were not willing to make any changes. I’m not sure what the current MB contract form says, but I used one version on a house build a few years ago, and it’s not completely useless (ie at least you can understand what it means, unlike some I’ve read), so it was possible to use it as the basis of a contract. But only because the builder accepted most of the changes I asked for (including on subbies, contract period and liquidated damages among others). Regarding the point about your friend’s problem with subbies, I think he would have been in a much stronger position if his contract had made the builder (contractor) entirely responsible for their work. An example of the type of wording can be found in the NZIA Small Works Contract 2002 (may have been updated since then), Clause 17, which says ‘The Contractor is entitled to appoint subcontractors to do any parts, but not all, of the Contract Works. However, the Contractor is responsible for their actions or omissions. The Contractor’s obligations and liability are not affected by the Contractor subcontracting any part of the Contract Works.’ This is a lot better than nothing, although I think it could be expanded to make it clear that work done, not done or not done properly shall be treated exactly as though it were work done by the Contractor himself. However, clients should bear in mind that they do not have a contract with the subcontractor, only the builder (hopefully) has some kind of formal contract with the subcontractor. So I believe if things go wrong the subcontractor has no formal obligations to the client. Frankly the whole situation is a can of worms that will scare you if you think about it too much. Most people go into house building without it seems realising just how vulnerable they are, and how they are relying on the good fortune of finding a competent, honest builder.

The problem with franchises like Landmark is they have no qualified builders actually managing and running the franchise. It is like saying because I worked in a gas station I am capable of running an offshore oil drilling business. I have found that people are paying unnecessary franchise fees, combined with over priced build costs. How they do it is once you financially pay for the concept plans, which they own , so you are to now committed to them regardless of how much they charge you and if you try and replicate the plans, they sue you for copyright breach, even though it was your idea.

Master builders contract is a joke. Seriously suggest you look at built in insurance contract for peace of mind. Master builders and certified builders look after builders first and foremost. CB tried to get us on board with the sales pitch that the contract was written to protect builders first and I had quite a few heated conversations with them about Fair protection for both parties. Suffice to say I refused to accept their unprofessional approach to building and went with built in insurance to protect customers long term. To get this cover the builder must complete an in-depth questionnaire on financial viability and provide referrals to gain qualification which is checked by Built In Insurance. They are not like MB or CB and are standalone and are not a membership organisation so you have the peace of mind of 3rd party confidence.

Master builders is now seen by most licenced qualified builders as being the biggest joke now in the industry and this is because they give MB accreditation to Franchised companies like Landmark Homes without owners being qualified lbp’s or builders. This means the contract builder takes ownership for build issues when Landmark takes all the profit and dictates to the builder (who has no say in the matter) product that must be used. Note to all. Any good builders worth their salt never build for a franchise company and run their own reputable companies. Why would you support companies that are middle men to take your hard earned Money through franchise fees instead of supporting local builders with fantastic reputations who are more cost effective, more knowledgeable and build faster with low overheads. Anyone choosing a franchise company is not choosing a reputable builder as their contractors are screwed on price to do the work for the franchise to take the profit. Now ask yourself what gives when you pay your stubbies cheap rates, take no liability and cream the profit. Exactly what happened to the previous owners of Landmark Franklin. You get major issues with builds and the Head franchisor does nothing until people on here started writing heaps of negative reviews and then he goes legal to get comments taken down. And for the new owners of Landmark Homes – why didn’t you open a company yourselves instead of buying a franchise. That’s because you’re not a qualified builder???

I had a friend who went through the LBPB very recently to reprimand the building company who built his house, and which failed COC on epic proportions, and the LBPB deemed the building company in question not liable for the faulty work of their subbies even though they hired them and signed of a ROW for it all too. He is appealing the decision through the District Court as their ruling completely contradicts what all their literature says but it just goes to show you how very little protection there is out there for the home owner and in my opinion you lose nothing by trying to include things like this into your contract. Even if the issues may seem to have an obvious outcome or may even be considered trivial, the builder will either agree or disagree to enter them into the contract and you’ve lost nothing by attempting it, unlike my friend who will now spend $15-20k trying to overturn a ridiculous ruling. The devil is in the detail so the more you can add then you’ll be better off for it.

Hi Jayne, I’ve said this before, but I guess it won’t hurt to repeat it. Regarding the copyright for concept plans, it is almost standard practice that a designer will stick a statement saying they own sole copyright on any plans they produce. If the plans are substantially based on some other ‘standard designs’ the builder /designer owns, and you have just got them amended to suit you at a ‘discount’ or highly subsidised price, then it may be fair that they own the sole copyright. But unless you’ve signed a building contract based on those plans you are not committed to continue with that builder, if you think they’re ripping you off on the overall price. Better to lose a thousand on the plans, than lose tens of thousands on the build. But better still is to remember that before you sign anything, or pay any money, everything is up for negotiation. So raise this issue of copyright before anything starts. And if you think that what you’re paying for the concept plans, based on your ideas, is similar to what you would pay an independent designer, then insist that you will own at least a share of the copyright. Maybe not to sell the plans, but at least use them yourself. If the builder does not agree then walk away, or get the plans done by your own designer. I think a large part of the problem in NZ, is that there so many independent clients, who are relatively inexperienced in how the building process should work. So they are easy targets for the less than honest builders.

Yes, sadly I’ve read quite a few comments on here about people who pay for their plans with these franchise companies only to lose them when then the true costs of their build comes out and they cancel the contract even though they contributed the lions share to the design. Unfortunately it all comes down to the contract and most of these franchises don’t let you change their “standard Master Build” agreements and this clause would surely be one that they have set in stone so you are less likely to walk away because you’ve already put your heart, soul and a good chunk of your wallet into it so many people stay and just hope for the best. It’s criminal really. Good licensed builders wouldn’t touch a franchise with a ten foot barge pole, they have better success and make more money running their own building companies which is why these are run by people with less experience. The only ones you hear about are the likes of Jason Strange and look how that turned out.

Agree with Jayne. Ask Landmark if their project managers are qualified lbp’s/builders. Or if their site supers are doing points through attending suppliers training sessions (1 time). If their site supers are advising the builders how to build and if the builders are lbp’s. Note any issues with the Build will go back to the lbp builder not Landmark as per Landmark North Shore scenario in another post on here (you should read). Franchises pay franchise fees back to HO and you pay for those so from the start your build will be more expensive. Do your due diligence and look for a fully qualified lbp builder (not just a newby on the block) who has fantastic reviews and is not another franchised coy taking margin. If you build with a franchise who is not a reputable builder himself then you deserve all you get with it.

Bloody brilliant. Well said TttM!

Spot on Max. You have got to the heart of the issue very concisely. I only wish I understood this back when I was starting out on my first build. To all out there ready to start your first building project. Please print out Max’s comment, put it on the fridge and read it everyday – hopefully you will make the right decision. Well researched independent not franchise!!

Agree. We had major issues with our builder including poor finishing, workmanship, extensive delays, not delivering to specifications, failing to deliver in agreed work etc etc. I ended up in facilitated conversations between ourselves and Master Builders and Fairway Resolutions. Reports stated everything in accordance with contract and within tolerance. What a fkn joke. The system is a sham and so in favour of the builder the home owner basically is forced to bend over and take it up the backside. Our overall experience was quite frankly disgusting. MBA looks after builders and Fairway looks after MBA. It’s a hiding in waiting. We are now fixing at our cost and completing stuff agreed to…… on top of the poor work completed. The system is fkd. Bring back carpenters instead of over charging kitset incompetence who’s only desire is to make excessive profit.

Well said

Hi MJ, It’s a little unclear what you are talking about in regards to your friend’s LBPB complaint. First a company cannot be an LBP. You can only take a complaint to the LBPB regarding an individual who is an LBP. Secondly when an LBP does a record of work it can only cover what they are qualified to cover. This means a ROW cannot cover any subbies like plumbers, electricians. The company is still responsible for the subbies workmanship, but not as an LPB (except maybe one with a “site” licence?). The district court is probably the right place for their dispute.

Hi MJ, Again some good comments from you, but I think unfortunately not taken to their logical conclusion. As I’ve said before on this blog (several times), before you give a builder any money, or sign anything, everything about the contract and the build is up for negotiation. So if their contract says they have sole copyright to any concept or other plans that you have paid for, then ask for that to be changed, to give you at least a share of the copyright (maybe not to sell on, but at least to use yourself). If their contract is the same as the MB contract I looked at a few years ago, then tell them that some aspects will need to amended. (Unfortunately no time or space to go into exactly how here.) If they refuse on one or both points then walk away. If that means you can never go with a franchise builder then so be it. If everyone did that, then the franchise builders involved would realise they need to change, if they want any business. Regarding inexperienced people running building franchises, does anyone recall a TV ad not so long ago for people to own/operate a branch of a rather famous renovation franchise which said ‘No building experience necessary.’ I guess that says it all. And while I’m writing I’d like to say I hope that everyone reading this stays fit and healthy, and give my sympathy to anyone who’s caught in the middle of a house build. It will make an already stressful experience even more difficult.

Unfortunately it will get worse under a Labour government I think. The system has been corrupt for years and that also includes the LBP Board but they’re even more hesitant about taking licences off the dodgy builders now because they’re failing on epic proportions to honour their election promise of more houses (I mean the joke that is Kiwibuild) so as far as Labour is concerned it’s all hands on deck! (Or all hands on hammers) the more the merrier…etc…etc… I wouldn’t even contemplate a new build now. The whole systems needs gutting and rebuilding and only then would I consider giving it a go again. Unfortunately we learned the hard way as did most people on here and it saddens me when I see someone else adding their stories to ours.

Haha. Ain’t that the truth. Sounds like a bad experience. Builders like this give the industry a really bad name. They are focused on themselves and not the client. Bet a flash Toyota Hilux , plus rugby league, holidays in Fiji. Over inflated ego

The cowboys we used on our build wouldn’t even use edge protection while they were doing the roof (even though we asked them to) so I can’t imagine they’ll be very vigilant about the 2m rule so I would suggest that for all the poor folk out there that are stuck in this horrible situation in the middle of a build to give all your contractors a very wide berth. Stay safe all.

Yes this is our experience exactly. The LBP Board protects the builders they have their weetbix licenses to, not the public at all. We too had to fix the LBP’s extensive non-compliant building work. He was in fact a scammer with multiple victims.