thechristchurchfiasco

"Highlighting the inadequacies of the way in which the earthquakes of 2010-2012 were handled by the insurance industry! "

The DBH Guidelines and EQC – Operation ‘Hoodwink’ – Guest Blog by Adrian Cowie

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If you are a homeowner in Canterbury and have made an insurance claim for earthquake damage, then this article may be of interest to you.  However, reader discretion is advised – the conclusions may be alarming.

Homeowners in Canterbury are becoming very familiar with terms such as “DBH Guidelines”, “1 in 200 slope”, “50mm differential settlement”.

This article looks into the DBH Guidelines; how EQC and the insurance companies seem to be interpreting the guidelines so that they do not have to repair or replace damaged homes; some recent examples; and finally, recommendations for both the Government and Homeowners.

What prompted me to write this article was a video I watched of Roger Sutton (the Chief Executive of CERA) speaking at the Green Zone Community Meeting at Avondale Primary School on 30 August 2012.  I found this video on the CERA website.  why I was watching video’s on the CERA website I am not sure, desperation maybe.  Anyway, it was the content of this video that caused me great concern.

Around 41 minutes into the video, an audience member asked Roger Sutton the following question (I have quoted both questions and answers as closely as possible):

Why did they revise the guidelines on levels of foundations.  I defy any builder that would build a house 50mm out of level over 10 metres, yet the DBH guidelines, which EQC seem to want to adopt, is if your house is under 50mm, then EQC don’t want to fix it”.

What a great question to ask – something that has also been on my mind for the last 12 months.

Roger Sutton’s reply was simply stunning:

So, what happened was, the DBH went around and did some surveys around other parts of New Zealand to find out what sort of levels existed in other places.  And they found a large percentage of houses that were worse than the 50mm over 10 metres.  They found that Gerry Brownlee’s office in the Beehive was worse than that”.

The audience member replied:

I would absolutely dispute that”,

To which Roger replied:

That is the background.  The floor levels they found were in many places worse than that without an earthquake”.

There you go.  All straightforward.  No argument there.  The Chief Executive of CERA has spoken.  But, the question begs asking:  Was Mr Sutton correct in what he said?

As it happened, around the same time in August 2012 I had contacted the Department of Building and Housing (DBH) and spoke to the DBH Engineer who actually took these levels. He indicated that the levels he took were on new concrete floor slabs under construction by group housing companies, and that the levels showed that the floor level variations were actually not very large.  I requested copies of all of the information – and as usual with Government departments in this day and age, I was met with a point blank refusal.  You shall not get the information.  It must be noted that I did get the summarised report as presented to the DBH panel, but not the actual survey data or calculations.

It was at this stage that I made my first OIA (Official Information Act) request in my life. I requested all of the survey data, plans, fieldnotes, and calculations associated with the levelling of the floor slabs by the DBH.

The information received from the DBH concerned me, and it should be of concern for any Canterbury homeowner who has lodged an insurance claim for earthquake damage.

Firstly, the floor level surveys carried out by the DBH as a ‘control check’ on new floor slabs around New Zealand were not carried out by a Registered Professional Surveyor, nor a Licensed Cadastral Surveyor.  In fact, it wasn’t a Surveyor at all who took the levels.  It was a Structural Engineer who apparently uses his builders level maybe twice a year.  The builders level he used was not even checked for accuracy before these surveys.  Why is this important?  Because these level results are being used as a foundation for the assessment of all earthquake damaged buildings in Canterbury – it directly affects every home in Canterbury. Not only Canterbury, they now affect every home in New Zealand.  That is approximately 1.6 million homes.

Secondly, the fieldnotes indicated to me that the person who carried out the fieldwork was not “suitably qualified”.  There were numerous cross-outs and changes on the fieldnotes, and there did not appear to be any cross checks or independent checks on the survey information.  At the very least I would have expected a highly accurate control type survey carried out with specialist survey equipment.  Not so here with the DBH, it was just a common or garden builders level that had been kicking around under someone’s desk- a real “she’ll be right” attitude.

The DBH results are interesting.  I have made a summary below based on the information on the 9 sites that were given to me (note, I only have received 9 out of the purported 15 sites):

Site

Approx Floor Area   of Slab

Total Height   Variation on Concrete Slab

Height Variation   as Percentage of DBH Guidelines (50mm)

Height Variation   Around Perimeter of Concrete Slab

ChCh 1

163m2

23mm

46%

15mm

ChCh 2

173m2

16mm

32%

16mm

ChCh 3

168m2

19mm

38%

19mm

ChCh 4

132m2

17mm

34%

10mm

ChCh 5

82m2

13mm

26%

11mm

ChCh 6

217m2

16mm

32%

16mm

ChCh 7

206m2

18mm

36%

18mm

Wgtn 1

14mm

Wgtn 2

18mm

I have tried to make the table easy to understand, but what this table shows is of importance.

The largest observed height variation in these floor slabs was 23mm, or 46% of the DBH guideline of 50mm.

The largest height variation around the perimeter of the slab was only 19mm, or 38% of the DBH guideline of 50mm.

As can be seen, the height variations were between 13mm and 23mm, with the height variations of just the slab perimeter levels being between 10mm and 19mm.  These variations are actually relatively small – considerably less than the DBH’s 50mm.

The DBH Engineer did say the survey results showed surprisingly little height variation, and that the 50mm cut-off was based on what they thought would be an observable amount when compared to say a close-by boundary fence.

I cannot understand this rationale of whether it can visibly been seen when compared to a nearby fence.  Who erects a fence that is level?  Even on the flat in Christchurch, fences follow the ground levels and are almost never level.  Why base the 50mm on what is visibly perceived rather than actual damage?

But hold on, didn’t Roger Sutton say that the large percentage of floor slabs were above the 50mm height variation?  Maybe there is another set of DBH survey results floating around the CERA offices somewhere.

It was at this point that I became really confused.

So, I made another Official Information Act request, this time to CERA, requesting all of the survey information that Roger Sutton made reference to, including the floor level survey of Gerry Brownlee’s office in the Beehive.

I have another 16 working days to wait for this information, or so the Act tells me.

Why is all of this so important?  I suspect many home-owners already know the answer to this.  But in summary, the DBH have made a decision that if your floor levels vary by under 50mm, then they have deemed that no damage has occurred.  Now, before the DBH reply to state that there are other factors outlined in the DBH guidelines, yes, I am well aware of these.  There is a 1 in 200 slope cut-off, i.e. any floor slopes steeper than 1 in 200 require re-levelling or replacement.  And yes, the Explanatory Notes in the Guidelines state that these limits are ‘indicator criteria to provide guidance, they are not absolutes”.

To say that any vertical height variation less than 50mm does not constitute damage is incorrect.  I have surveyed many buildings which clearly need re-levelling which have floor variations less than 50mm.

What is interesting is that Gerry Brownlee visited the Re-Insurers in Monaco around September 2011, and in November 2011 revised DBH Guidelines came out which considerably relaxed the limits upon which repairs were required.  Is that a coincidence?

Why was the upper limit increased from 100mm for a concrete slab to 150mm?  From what I have read, it was because the repair contractors and product suppliers said they could repair slabs up to 150mm out of level.  Of course they would say that – why wouldn’t you if it guarantee’s your work for the next 10 years.  The question still remains – can the floor slab be re-levelled by 150mm and be no worse than before the earthquakes?

And this brings me to the next issue.

Why haven’t EQC and the Insurance Companies read the ‘Explanatory Notes’ that are outlined in the DBH guidelines?  I seen EQC and Insurance Company Representatives who religiously stick to the 50mm limit as if it is set in concrete, when in the guidelines it is not.  As mentioned above, it states that these limits are ‘indicator criteria to provide guidance, they are not absolutes’.  But the way the Guidelines are written favours both EQC and the Insurance Companies.

EQC as part of their assessments of homes for earthquake damage take floor levels.  However, their methodology has critical flaws.  Rather than using Registered Professional Surveyors as they should be doing, they are using anyone who can wear a fluorescent jacket.  A recent example was a chap who was an Architectural Technician, with his qualification from another country.  He had no formal survey qualification.  And yet his results determine whether the poor home-owner’s house will be repaired or not.  I have watched first hand EQC’s levelling techniques, and to say they are shabby and inaccurate would be an understatement.

EQC will only take levels in the ‘easy’ places to take levels, they won’t move furniture or crawl under desks to get to the places where levels are really necessary, i.e. close to load-bearing walls and exterior walls.

An example of the EQC’s floor levelling – a client’s 20 year old two-storey home in Burwood, concrete slab with timber frame.  It took me 6 hours work to take floor levels on both floors of the house with the owner taking the day off work to remove furniture and other items so that I could take levels in all of the corners of the rooms.

Not so with the EQC assessors.  Two of them waltzed in to the same house and proudly stated they were here to do the assessment for the Repair Strategy.  I questioned them, don’t you mean “Repair/Rebuild Strategy”?  Or had they made up their mind before even assessing the property?  Never-the-less, in their allocated one-and-a-half hours, they were able to carry out a full structural assessment AND take floor levels throughout the dwelling.  Maybe I too need to go to the EQC School of Speed Surveying and Engineering.  It reminds me of ‘That Guy’s’ (Leigh Hart’s) sketch of ‘Speed Cooking’.  The end results are strikingly similar.

It was a question that I posed to these two EQC assessors: “How can you take only 1.5 hours to do both a structural assessment AND floor levels when it took me 6 hours to do just the floor levels?”  They didn’t have an issue with it and were content with their timeframe.  They then started their survey with a methodology similar I suspect to the DBH engineer – no check of the level instruments calibration before the survey, taking levels to the top of the carpet (carpet with an underlay).  In short, what I was witnessing was total incompetence.

But their results would become the sole basis for determining whether the floor slab variation was above or below the magical 50mm limit.

So, not only could they do the survey over four times faster than myself, they didn’t need any furniture to be moved.  They didn’t attempt to go to the outside corners of rooms.  And yet, they claim their results are accurate.

I have carried out many forensic type building surveys over the last 2.5 years, and have found a regular coincidence.  That is, my results show that the actual floor level variation can be 2x to 3x worse than what the assessors for either EQC or the Insurance Companies have determined.  In fact, I can’t think of one instance where my results show less height variation than theirs.

But some examples, a commercial building which the insurers assessed as being 50mm out of level, was actually 150mm out of level.  A residential home where the Insurance assessor showed around 40mm height variation, where it was actually 60mm, above the critical 50mm cut-off.  Many houses that are over the 150mm rebuild limit, but the EQC levels show them considerably less than 150mm.  What about the assessors who level each room individually and find that each room is only 20mm out of level, without actually taking an overall level from one end of the house to the other.  And then the Assessors who simply don’t take floor levels at all (I guess they are not guilty of using the equipment incorrectly).

There are many more examples, some of which are now before the Courts, but there is a striking similarity in all of these cases (both residential and commercial), and that is both EQC and Insurance Companies are using non-qualified people to carry our floor level surveys, and their flawed methodology is resulting in thousands, possibly tens of thousands of homes that should be re-levelled to be classified as not having been damaged.

So, not only do we have DBH guidelines which seem to be based on simply reducing repair costs to both EQC and the Insurers, we also have EQC taking dodgy floor levels.  How could the owner possibly get a correct assessment from all of this?

In essence, the Government is asking (or rather, telling) the homeowner that they, the homeowner, are going to be taking a financial hit for their earthquake damage.  Not EQC, not the Private Insurer.  The homeowner.  And the fact that the homeowner has an individual legal insurance contract with their insurance company becomes a by-issue.

At present, with the shortage of rental accommodation, houses are being sold without a care of the floor level variation.  But wait until the rental shortage subsides and the housing market returns to ‘normal’.  What type of house will have more value, a new post-earthquake dwelling, or a pre-earthquake dwelling with a floor slope of 80-90mm (yes that’s right, because the EQC Assessor didn’t take the levels correctly, and so no repair was done).

In fact, it is happening already – I have carried out numerous floor surveys of dwellings for potential purchasers, and in every case, they have not purchased the property – the reason?  The floor level variations indicated damage.  Damage that both the DBH and EQC refuse to acknowledge exists.  To not have this damage repaired now puts all liability back onto the homeowner.

I won’t even start on the issue of ‘Pre-Existing’.  The number of EQC assessors that turn up, and within a matter of minutes have determined that everything is ‘Pre-Existing’ is concerning.  It sounds like they have just come out from an EQC team-building exercise with Mircrosoft’s Steve Ballmer ‘developers….. pre-existing, pre-existing, pre-existing ”.

I thought that EQC and the Insurance Assessors would be interested in the truth.  Sadly, I was wrong.  It seems to only be about minimising the claim amount and transferring liability to the homeowner.

Now, by this stage you may be thinking that I am being pedantic.  But, to most home-owners, their home is their largest and possibly only asset.  They have had to pay for their homes on tax-paid income, with mortgage interest on top of that.  To have a home incorrectly assessed for floor slab damage could make a difference of literally hundreds of thousands of dollars.  Multiply that by the 130,000 homes in just Christchurch , and it becomes an issue.  I don’t think I am being pedantic.

Another statement that people make to me is “look, the country would be bankrupt if the Government fixed all of the houses – we just have to accept them as they are”.

But that approach makes a mockery of people’s insurance policies.  From what people are saying, it sounds like the insurers and re-insurers are doing very well financially.  Why does the homeowner who has paid premiums for years, now have to shoulder the liability of a damaged house?

In conclusion, I have two recommendations to make.

The first is to the home-owner.  If you have made an insurance claim, I suggest you request (or rather, insist) that EQC and your Insurer have the floor levels of your home surveyed by a suitably qualified professional.  In case they don’t know what ‘suitably qualified’ means, – the words “Registered Professional Surveyor” or “RPSurv” are a good starting point.  Only then, will you have some certainty on the actual floor level variations in your home.

The second is to the DBH and EQC, i.e. the Government.  You require professionals to be “Suitably Qualified” and yet you do not keep to this rule yourself.  Why do you not?  From what I have seen of both the DBH and EQC’s methodology in respect to floor levels, it would seem that there could be thousands, if not tens of thousands of Canterbury homes that need to be re-levelled, and I don’t just mean levelled with survey equipment.  Therefore, you need to re-address this issue of floor levels and start by levelling and re-levelling floor slabs accurately so that the actual floor height variation and slope can be accurately determined.

Next week, I am going to look into the issue of Building Subsidence in the Flood Zones of Christchurch.  The waters are indeed murky, and before I start writing I will have to sort out my computer’s spell-checker as to why it insists on changing the word ‘LIDAR’ to ‘LIE’- dar.

Writer:    Adrian Cowie, Director of Topografo Ltd (a Christchurch Survey Firm)
Registered Professional Surveyor
Licensed Cadastral Surveyor
Bachelor of Surveying (Otago)
Member NZ Institute of Surveyors
Member Consulting Surveyors of NZ
Member Institute of Cadastral Surveyors
Member SESOC (Structural Engineering Society New Zealand)

Postscript: 5 July 2013: I have now received the OIA request back from Roger Sutton at CERA.  His reply was that this was the best information available from MBIE at the time.  He refused to provide me with the actual survey information. I have since made two more OIA requests, the first to Roger Sutton, requesting all of the information that MBIE provided to him; the second to MBIE, requesting all of the information that they provided to Roger Sutton. I have stated to Roger Sutton that it is either him, or MBIE that are lying.  It is important for Cantabrians that we determine who.

Author: Sarah-Alice Miles

I believe in the enormous power of the human spirit and the power within each of us to effect major change. "The only triumph over evil is for good men [and women] to do nothing". Trained as a lawyer, psychotherapist and mediator. My goal is to make my voice heard for the causes in which I believe so as to improve and contribute to a more sustainable and equitable society. https://thechristchurchfiasco.wordpress.com/

3 thoughts on “The DBH Guidelines and EQC – Operation ‘Hoodwink’ – Guest Blog by Adrian Cowie

  1. Dear Sarah/Adrian, Thank you for providing the information you have collected and distributed to the public. While I agree with most of your data, I cannot say the same regarding the opinion to discredit the structural engineering as not being “suitably qualified”. While some surveyors get their training through a few courses at a community college, this is part of a structural engineer’s core curriculum in addition to the field of structures, soils and foundations. I would want someone that is experienced in all aspects of the task under investigation instead of having a field technician surveyor go out and provide data on levels only and not understand why a house structure may have settled. While you may think using a level is rocket science, it is really not that difficult to use. You can even purchase a simple laser level from the local hardware and get satisfactory results. All structural engineers have to be properly trained on the typical survey equipment in addition to other areas. I suspect the topographical data you have listed is fairly correct even if an instrument was out of calibration. So, if you have some data to prove this data collected is incorrect, I suggest you add this to your article. Otherwise, this type of slander is not appropriate without proof. If this surveyor that is retained has the capacity to provide a topographical survey AND advice on the foundations, soils and structures, then by all means they would be suitably qualified.

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  2. In one EQC assessment, the assessor walked around the floors stamping with his foot. From this he was able to determine which areas need re-leveling. Needless to say, the dispute is still ongoing about whether this was an accurate assessment.

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  3. Guidlines – A guideline is a statement by which to determine a course of action. A guideline aims to streamline particular processes according to a set routine or sound practice. By definition, following a guideline is never mandatory. Guidelines are not binding and are not enforced. – Wikipedia
    The key aspect of repair is the policy wording – if the policy says repair to as new using currently available materials etc or similar then for instance filing floor slab cracks with Epoxy does not fulfill that promise and the INSURANCE CONTRACT can be enforced.It appears that Politicians/EQC/Insurers are colluding to deprive policyholders of their contractual rights and hopefully future court judgments will make this clear and set a precedent that will be followed .

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