The Regulation Concerning Amendments to the Regulation on the Practice of Building Inspections ("Regulation"), published in the Official Gazette dated 29 December 2018, has introduced major changes in the practice of construction inspections.
One of the most important changes concerns the choice of building inspection companies and how service agreements may be terminated. Once the changes go into effect, which inspection companies the owners may engage will be determined electronically by the Ministry.
The amendments will permit the termination of service agreements only in certain limited circumstances. Some of these are: (i) the parties not performing in accordance with the agreement's provisions; (ii) a change in the building's ownership; (iii) the owner's failure, following the execution of the contract, to obtain a construction license for a period of at least two months, and the owner's reporting to the competent administration that he/she no longer wishes to obtain a construction license; and (iv) the building's construction being stopped for a period of at least six months due to any reason. In addition, termination on the basis of one of these reasons will only be effective with the consent of the Provincial Directorate of Environment and Urbanization, in light of the actual reason for termination.
Another significant amendment to the Regulation concerns the service fee. According to the adjustment, the service fee will be determined by multiplying the approximate cost of construction by the base rate that applies to the construction. The approximate cost of construction, in turn, will be calculated by multiplying the building construction area by the unit costs set out in the Regulation. Thus, the unit cost to be used in this calculation will now be the unit costs provided in the Regulation, rather than those listed in the Communique Regarding the Approximate Construction Unit Costs to be Used in the Calculation of Architectural and Engineering Service Fees.
Unit costs will be updated annually, on the basis on the previous year's domestic producer price index.
The Regulation entered into force on 1 January 2019. Service agreements for inspection that were signed before 1 January 2019 will remain in effect, and termination of such agreements will be governed by their own terms. The termination procedure as set out in the Regulation will not apply to such agreements.