Finger pointing at developers nonsense

First it was the leaky buildings now it appears the fingers are being pointed at property developers for the installation of sub-standard fire systems.

The systemic failure by cost-cutting apartment developers to build fire-safe apartment blocks in New Zealand’s major city is being kept under wraps by secret legal settlements.

The Sunday Star-Times has learned of a number of secret settlements to homeowners involving professional fire engineers and the Auckland Council for sub-standard fire systems in multi-unit dwellings although the council denies its involvement.

While the fire safety problems are not restricted to Auckland or apartment buildings, the Star-Times understands settlements so far have related to Auckland apartment complexes.

The finger cannot and should not be pointed at developers. Particularly for apartment buildings.

All big apartment buildings are built on contract by construction firms who make it their job to add value to contracts through variations (charging extra for changes or design detail that is missing) and ‘value engineering’ (the art of substituting products for cheaper variants to save money and improve the margin for fixed price contracts). Banks and financiers expect fixed price contracts and constructors price lean to get contracts then manage greater margins during the process as described.?

Developers have very little influence over what constructors do within the limitations of construction contracts. If a contractor finds a way to save money and contractually they can, then they will and there is nothing a developer can do about it.

Developers also have no influence over design consultants. There are no developers in New Zealand who ‘know it all’ and therefore can find a way to scrimp on design to save money. What developer knows the intricate detail of fire engineering, civil engineering, architecture, structural engineering, hydraulic engineering, ventilation services, lift design, facade engineering, electrical engineering and so on?


Each discipline requires years of study at university. Each discipline is specialised and require years of experience to garner particular knowledge. For these reasons it it absolute nonsense to suggest property developers can possibly know it all.

Developers are reliant on consultants to determine the outcomes for all the components of a building. They have to be.

And what developer is going to squeeze a fire reticulation budget on a $40m build job to save a $50,000? It is actually a minuscule value saving to be had.

But a constructor would.

And of the consultants? Most design consultants in New Zealand are professional and their work is scrutinised by Councils with peer reviews by external consultancies. Too many people to be in on it to make it happen.

The reality is where buildings typically fail is where substitution of product has occurred and where it isn’t picked up.

That’s at the construction end of the process when constructors are trying to save bucks. It’s very hard for an engineer to contract, design consultants and council inspectors to pick up every change made by constructors who can easily get away with it.

Finger pointing at developers however is nothing more than frivolous and vexatious nonsense.

But news outlets aren’t in the business of actually understanding about that which they write, they just want a convenient blame-hound and developers are easy to hate.