Keola Homes

How Unlicensed Cowboy Builders Are Culled By The LBP Scheme

Sanjesh Lal — Mon, 05 Mar 2012 23:04:57 +0000

Howdy!

Did you know that Cowboys were often young boys as young as 12 or 13. Lacking in skill and ability, they started early to develop the necessary skills to then be hired on wages. And many developed into the most reckless class of outlaws in the wild country.

Hey, it even became an insult to call someone a ‘cowboy’, as it suggested he was a horse thief, robber, or outlaw!

But we don’t need to go to the wild west

‘Cowboys’ now exist in every society. Especially in the building trade, they are abundant. Pick up a hammer, get a builders apron, find a beat up ute and you are a fully qualified cowboy builder. No formal training. Marginal experience. No checks for skills or ability. Or any requirement to keep abreast of current industry regulations. In fact, no checks for any competency at all.

Start by fixing fences

Then build decks. Then houses. Then multi-storey apartments. Or basically any job that you can secure. Just use your imagination. But when these cowboy towns all started crumpling down, the sheriffs decided to take some action. And so they drew a line in the dust.

And said, ‘Cowboy Builders are no more’

‘Anyone involved with building or supervising must demonstrate competency in their chosen field’. And they gave this process a fancy name. And folks, this is how the ‘Licensed Building Practitioner’ (LBP) Scheme was born.

Licensed Building Practitioners have to show certain skills, give proof of practical experience and comply with the building code to become licenced. They also have to maintain a minimum number of Continued Professional Development points. (CPD)

Demonstrate Competency

All builders and designers(or anyone involved with the construction industry) are now required to demonstrate their competency in order to become a Licensed Building Practitioner(LBP).

If a builder can’t demonstrate his competency within the regulated process of the LBP scheme, then he’s thrown outa town.(figuratively speaking). Any building work(including design) that requires a Building Consent is now classed as ‘Restricted Building Work’. And only LBP’s are allowed to undertake Restricted Building Work.

Pretty simple if you know what you’re doing

First check if the building work you’re intending on getting done is restricted; if yes, then you need to engage a LBP.

So what happens if I do this on the ‘quiet’?

There are fines of upto $20,000 if someone carries out or supervises work for which they are not licensed to do. Likewise if you knowingly hire an unlicensed person, you could be fined as well.

Does that mean I’ll have to hang up my tools?

No, not at all. Do it yourself(DIY) is still allowed, you just need to check if this work is deemed ‘Restricted Building Work’.

Summary

· LBP scheme is now in effect (from 1 March 2012)

· Any work that requires a building consent is “Restricted Building Work”, therefore must be undertaken by a LBP

· Fines of upto $20,000 for non-compliance

Click here to check if your designer or tradesperson is a LBP

An old cowboy saying… ‘Never approach a bull from the front, a horse from the rear or a fool from any direction’ Yeeha!

How To Keep Your Home From Subsiding (for Less Than the Cost of a TV)

Sanjesh Lal — Fri, 19 Aug 2011 02:38:24 +0000

Italian Torre Pendente di Pisa. Aka – The Leaning Tower of Pisa. A medieval structure in Pisa, Italy, started in 1173. Famous for the settling of its foundations which caused it to lean 4.5 metres from its base.

In the late 20th century the structure was still subsiding. In 1990, the tower was closed due to being unsafe.

Remedial work took 10 years and the structure was reopened to visitors in 2001. Engineers now expect the tower to remain stable for at least 200 years.

Why the story? To understand how critical the role of the underlying soil strength is to the performance of a structure.

Soil has strength?

A geotechnical report is an analysis of sub soil strength by a chartered professional engineer, qualified in the field of geotechnical engineering. Ok, I know that’s a mouthful.

What it means is that someone who knows what they are doing will touch, test, prod and poke to establish the strength of soil. Effectively, a mud doctor.

Mud doctor to the rescue

A series of deep holes are drilled in the ground, typically 100 mm in diameter and soil samples are extracted.

The samples are tested, probed, and prodded in a lab and voila, the doctor determines what structure the soil can support and what type of foundations are necessary. Aha!

That brings me back to the Leaning Tower of Pisa

I’m sure you’d have seen a picture of this 1000-year-old monumental icon. Pretty dramatic isn’t it? Well, put it this way, if a proper Geotech report had been done, then the leaning tower probably wouldn’t be leaning.

When should an assessment be done?

Well, I shouldn’t even need to say so, but before any design work is done! To find out why a tower is leaning, almost a thousand years after it’s built, is somewhat worthless.

Don’t get me wrong, the Italians have done a fabulous job with the means they had at that time, even to keep the tower standing till now.

But you don’t have an excuse

The technical means available now, well exceeds the actual testing required. Just in case you are wondering what it costs, well, for starters far less than the cost of fixing a leaning or subsiding building, typically say 0.5%(that’s a half of a percent) of the cost of building a house.

You can do the Maths. It is not a huge cost by any means.

Will a Geotech report guarantee the stability of my house?

In one small word. No. Tell me something in this world that is guaranteed. (except taxes of course). The idea is that a professional investigation will minimise your risk.

Now you wouldn’t prefer years of legal battles, an unsafe house and related stress, would you?

Let’s summarise the key points

If you are buying a site to build on, discuss getting a Geotech report with your designer
Do this before you buy or start any design work
Use a professionally qualified firm or engineer (ask your designer for recommendations)

Clear as mud? Next step – call your local Council to get information on your prospective site. A question you can ask them is, “Does this site have any soil stability issues?” And you should be leaned towards to the appropriate department…we hope.

How To Ensure Your Concrete Driveway Outlives You

Sanjesh Lal — Fri, 19 Aug 2011 02:17:13 +0000

What does the Pantheon, the Coliseum, Pompeii, the megastructures of the Roman era, all have in common? One word. Concrete.

Drives don’t have to be concrete

But concrete is a star when it comes to performance in compression. Compression is when you press something.

Say when you sit on a sofa, its going to compress.

Um, depending on your weight, the sofa will decide if it can support you or be flattened like a pancake. And likewise for the failure of concrete.

Concrete failure is hugely dependant on two things

The recipe. And the bedding.

The recipe. Get the mix wrong and your cake becomes a brittle windowless building. These days concrete comes pre-mixed in a truck with all the correct ingredients. A small delivery fee and you will have your Black Forest gateau at your drive.

The bedding. This is the base on which the concrete sits on. The wise man builds his house upon the rocks….yep, a well compacted, strong base will ensure a longer life.

One of the few materials which actually increases in strength over time

Unlike like your sofa, that will eventually lose its bounce, concrete will stand the testament of time. But only if it’s looked after properly.

Remember your high school physics?

Heating expands, cooling contracts. Concrete looves heat. But alas sometimes it becomes too hot to handle. And it wants to expand.

But if there’s no room to expand. It stretches. And it pulls. Anywhere it can. And then it cracks to create it’s own room.

The solution is expansion cuts(sometimes called expansion joints)

Expansion cuts for concrete expansion. Get it? These are the straight cut lines that need to be cut partway through your smooth drive. Shallow cuts, say 25mm or so through the concrete, usually in a grid fashion, 2-3metre squares.

These “cuts” create a void to allow the concrete to expand into, when it wants to.

Stop cracking up

Expansion joints reduce cracks. Minor cracks will inevitably still happen. But expansion joints direct the cracks to follow a neat grid.

And the cracks get cunningly “hidden”. And your smooth drive doesn’t end up looking like spider veins on an otherwise gorgeous leg.

The Romans used concrete as early as 509 B.C.

They built extensively and impressively during the Roman Republic era. The ruins that people now flock to see the Pantheon, the Coliseum, Pompeii were built of, and stand in testament to the durability of, concrete.

But here we are merely talking about a humble drive. One that allows easy access to your house. And without getting your tyres dirty.

Ok, Now To Concrete The Main Points

Concrete is a great performer under compression

It can easily last many decades

Bedding and correct recipe determines its life

Maintenance is simple

One of the simplest maintenance tricks is to keep the expansion joints clean. If they get stuffed up with grime, expansion can’t happen. And yep, you guessed it. The unsightly spider veins will start to appear. And pretty soon become big varicose veins.

How To Balance Financial Shortfalls During A Building Project?

Sanjesh Lal — Fri, 19 Aug 2011 02:09:29 +0000

Ever been to a buffet? One of those coronary, “All You Can Eat” ones? Pay once and keep going back for more. And no one really cares. Right? Except perhaps your heart surgeon.

Do You Need A Heart Surgeon

When it comes to financing your project, you don’t really need your heart surgeon right there by your side. If you’ve done ample preparation, everything should flow seamlessly. And without any stress.

Let me explain.

Anyone who is building a house will know it is going to cost a whole pile of money. The three critical questions you need to ask yourself are:

How much do I actually need?

How much do I have?

How will I make up the balance?

It’s as simple as that.

So, how much do you have?

Well I can’t answer that, but usually we find the average Joe usually needs to borrow at least some money from his friendly bank. And we all know banks have loads and loads of cash that they are just dying to lend to you.

But, they also have a whole pile of conditions of how they will lend you the money.

Some of these are:

You’ll need to show them that you have some money to put towards your project

You have a reputable company undertaking the project for you on terms of a fixed price contract

Risk areas have been identified^[1]

A valuation of project upon completion is required

Now I’ve never worked for a bank so please check the specific conditions with your bank.

Be Very Very Careful As To How You Will Fund Your Project

Occasionally I run into some naïve people. And I know you’re not one of them.

They’ll get a quote for their building project. And that could be a number, let’s say $500,000. They also have some money to put towards the project. Let’s say they have $100,000 and they’ll go and borrow $400,000 from the bank. So that’s great, everyone’s happy…until the project starts.

The Projects Starts, But What Changes?

We all know that with the construction of a house, there are certain things that will inevitably end up costing a little more. And these are mainly due to unforeseen situations.

Also, you may survive the construction unscathed. But then at the end, there is a whole load of additional “stuff” that needs your buckaroos as well. Furniture, window coverings, landscaping amongst other things.

Like it or not, there’s always bound to be additional costs that will crop up one way or another.

So, Are You Prepared For That?

And have you got access to additional funds, should it be required? Don’t cut yourself short and only borrow what you need. You need to have a buffer. So, in case of emergency, you could go back to your bank.

Or you haven’t used all your personal funds in the house, and you’ve got some spare to actually manage some of these additional cost overruns.

Realistically, the house cost is likely to change. And this is usually upwards! The only way you can mitigate that, is to have a bit of a pre-arranged financial buffer.

So, What Should My Buffer Be?

I can’t tell you. It really depends on a myriad of factors, some of which are:

Site conditions

Size and complexity of house

What Provisional Sum allowances have been allocated^[2]

How strict YOU are with your budget? Will you change anything during construction(trust me it always happens)

The Trick Is To Engage A Reputable Builder At A Fair Price

Discuss the contract in detail. Be aware of what allowances have been made. Ask questions as to the areas where budget blowouts could happen.

If you go with the cheapest rogue in town, then you will most likely need to allow for a significant increase in construction costs. Cost increases of 10-20% are not that uncommon.

If You’ve Got A Very Thick Wallet, Then No Problem

No reason to stress at all. But, if you haven’t. And are depending heavily on the bank, then they don’t have a “All You Can Eat” buffet. They could deny additional lending if you don’t meet their “criteria”.

You need to make sure that you are very comfortable that your project can realistically be finished in the allocated borrowings. And of course, that you’ve got some spare cash to splash on the creature comforts when it’s all finished. If you haven’t, then perhaps keep your surgeon nice and handy

__________

[1] Please see article on Risk

[2] Please see article on Provisional Sums

How People Avoid Paying GST – The Cashie Method

Sanjesh Lal — Fri, 19 Aug 2011 02:05:54 +0000

“So when was your roof completed, sir?” the nice insurance lady asks. Gulp. “Um, um, just two or three years ago, I think” you mumble. “Perfect, that should still be under warranty, so what was the name of the roofing company?

Sweat breaks out on your forehead. You know that insurance people are trained to sniff better than bloodhounds. “Oh, I’m sorry, I really can’t remember, I’ll have to get back to you” you whine quietly.

The above could be a conversation someone who has avoided paying GST is having with his/her insurance company. Well, I presume being a taxpayer, you’d already know that GST is an acronym for Goods and Services Tax.

It’s known by various names in other countries and essentially it’s just another one of the many taxes a government collects to keep a country functioning.

In New Zealand, this tax is currently set at 15% and is applied additionally to the cost of any goods or services sold. With that out of the way, let’s explore how some people try and avoid paying this tax by being creative.

The Cashie Method

Paying for something using cold hard cash whist sneakingly avoiding GST is loosely called “doing a cashie.” Yep, just roll out the folding notes in a dark alley, or broad daylight…nothing seen, nothing heard. No receipts, no invoices, no problem, right? Wrong!

Ok, So What’s The Big Deal with Cashies?

For starters, no paperwork. What this means is that there’s no comeback on either side. For anything. A-n-y-t-h-i-n-g. Imagine a drug dealer reporting his stolen drugs to the police. You get the picture?

Why Would There Be Any Comebacks Anyway?

Well, there’s not many products in this world that never ever fail. Or have a lifetime warranty. Even if it did, remember, no paperwork. Imagine if you did a cashie for the new roof of your home.

Stops the rain, keeps the home dry. Perfect. Now fast forward three years.

The roof starts leaking. Drip, drip, drip, from the ceiling. Needless to say, by this time the timber in your ceiling has also been having quite a wet experience.

You’re fuming. You call your cashie roofing contractor.

The authorities have finally caught up and he’s either wound up his business or enjoying bread and water in the comfort of his cell. No problem.

There’s always insurance to fall back on. Quick phonecall to the insurer. See the opening paragraph, you quickly retract from continuing your conversation for the fear of further investigation.

Ok, so there’s two options

Share bread and water with your “friend” OR get the problem fixed at your own cost.

You opt for the latter and get a quote. Damage has been extensive, a large part of the roof needs to be taken off for access, temporary weather proofing, replacing and painting parts of the ceiling, all up cost could be around eight thousand dollars. Your heart sinks.

Now, here’s the interesting part, the original cost of the roof was twelve thousand dollars. GST on this at 15% would’ve been eighteen hundred dollars(this was your tax avoidance perceived savings).

So, let’s see, it’s been three years

You will now need to spend eight thousand dollars(two thirds of the original cost), you will have a roof without warranty for the rest of it’s life, and who knows if the future will bring any more leaks.

The message I’m trying to get across is that this exact same drama could unfold in any number of situations.

And it would be a no-brainer for most people not to take this risk

But then there are others. Those that don’t know. Or really don’t care. Until they get caught out.

In your journey, you may find two types of people

Some that foil the system, somewhat. Some that foil it dramatically. Watch out for these people, for it is them that slowly contribute to leaking the efforts of genuine hard working citizens of the country. Drop. By drop. By drop.

Boy Racer Overcapitalisation Of Your Home (And How To Prevent It)

Sanjesh Lal — Thu, 18 Aug 2011 13:59:00 +0000

We’ve all seen these “boy racer” cars. 3-inch exhaust pipe. Shimmering wheels. Custom paint. Ear-shattering stereo system.

These are just some of the accessories you might find in a young man’s car. Initial cost of car – $10,000. Cost of accessories – $15,000.

Now, this is where it starts getting interesting. It would be safe to expect a buyer to pay $25,000 for this babe magnet, or even $20,000, right? Wrong. This machine has just suffered a severe bout of overcapitalisation.

What is Overcapitalisation?

Well, it’s when someone goes crazy with expenditure and not a faintest clue whether they will be able to recoup their money. Ever. It’s okay (somewhat) when we are talking a few thousand dollars to enable a young man/woman to live out their dream.

The worrying thing is that people are doing this with their houses

Where at stake, is hundreds of thousands of dollars. But that’s okay; if you’ve got an endless supply of the printed stuff! Well, do ya?

If you don’t, then you need to be very careful not to overcapitalise when it comes to building a home. Like they say, horses for courses. It needs to be fit for purpose.

And you need a way out. That’s it.

Have an exit strategy

What will you do if things turn to custard? You lose your job, become disabled, lose a partner. Do I really need to go on? When the proverbial hits the fan, you need to jump off the plane.

And your parachute will only work if you haven’t overcapitalised. Otherwise, you are a dead duck (figuratively speaking of course).

But won’t my house go up in value over time

Of course, it will. But, remember it can still go up in value without overcapitalising its true value. Go on, splash out your hard earned dosh if you must, but just be a tad smart about it.

Summarise, shall we?

Make sure you know the resale value of your project before you start

Don’t spend your hard-earned income on frivolous accessories (unless you are absolutely sure of recovering this cost)

Your parachute is sure to fail if you’ve overcapitalised

Review the eventual cost of any existing or upcoming projects. Don’t live in denial, be honest with what the true resale potential is, at any given time. Review sales in the area.

Get a professional valuation if you need to. Don’t be a boy racer and spend $15,000 on a $10,000 car… with absolutely no hope of recovery. Ever

Why Do Indian Weddings Have So Much Hoopla?

Sanjesh Lal — Thu, 18 Aug 2011 04:34:19 +0000

The generalised term of the ‘Indian wedding’ is mainly associated with the Hindu marriage ceremony – an elaborate celebration lasting for several days. A non RSVP large scale family gathering.

An event for ladies to show off their carefully crafted attire. A networking event like no other, where old aunties will scout for their future sons and daughters-in-law.

An exuberant fun and exciting extravaganza.

The Tradition

Indian weddings used to be quite a traditional affair. The bride and groom would be confirmed for each other by their parents at the tender age of 5 or 6 years.

Then it slowly evolved into arranged marriages. Not these days. The western culture infiltration is allowing for self selection of partners. Which is great.

Could you imagine the bridezilla that cute 6 year old could become in her twenties.

Lets Set A Date

The wedding date is a very special date selected from astrology and superstition. An honorary priest would select this date. World Cup or Super Bowl, this date cannot be altered.

It’s A Very Religous Affair

Lots of prayers and rituals. The rituals are set in concrete. Well almost. Not many people know exactly why they are done. But then not many people dare ask either. Not just two individuals but two families come together as one.

Where’s The Party?

There is no consumption of alcohol or meat a week before and right upto the wedding. After the wedding, usually the next day, its all systems go. Drink, normal food, music and dancing into the wee hours.

Plump aunties and grandmothers have no inhibitions getting on the dance floor. Move over Madonna. Multiple belly folds – no one cares.

Am I Invited?

Indian weddings are like big family meets. Travel costs aside, it’s obligatory for close relatives from far and wide to attend. An average wedding can have anywhere from 500 to 1000 guests or as many as affordable.

Guests just won’t RSVP. It’s not cool. We’ll just turn up and we’ll invite Aunty Saroj and family who don’t know the couple but are just passing by.

Needless to say, the host family is kept guessing as to the exact numbers to cater for on the wedding day. And hence the supply of food is plentiful. Running out of food at a wedding, would be considered very shameful.

Does My Butt Look Big In this Sari?

There is no limit to the expenditure on wardrobe – the traditional female attire being the Sari. The ladies in particular all think that they themselves are the bride. Razzle dazzle and bling.

Matching shoes, jewellery. And yes, an Indian lady won’t be caught dead wearing the same outfit at two different weddings. Even if they were in different countries in different continents!

There Goes Dad’s Retirement Plan

An average Indian wedding could easily cost $60-100K. I’d hate to guess the cost of lavish Indian weddings. Is there really a need to spend so much? Centuries old tradition dictates most Indian celebrations are full of pomp and ceremony. The biggest day of a woman’s life burns the biggest hole in Dad’s pocket.

Let’s Farewell The Baraat (bridal car)

Indian wedding ceremonies are performed over several days

It’s an extravagant pompous affair based on tradition and religious rituals

It’s a marriage of two families rather than two individuals

A Word Of Warning

If you ever get invited to an Indian wedding. And for the full three or four days. Be sure to attend. You will be thrilled.

But if like me, you don’t want to sit through hours of rituals. Just attend on the wedding day. And don’t bother to RSVP, there will always be plenty of food!