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Several benefits with the electronic construction log

Office Market

Sándor Habóczky, partner, Head of Real Estate Schönherr Hetényi Attorneys at Law New stories of the Budapest construction scene may no longer be written with pen and paper. The overall reform of building regulations last year introduced fully electronic administration of building matters and the mandatory use of electronic construction logs. Modern, IT-based solutions have been put in place to increase flexibility, transparency, and authority control across the entire construction process.  

Property developers have long been urging for an increase in the transparency, credibility, and predictability of the licensing procedure in the Hungarian building sector. Getting building licenses has traditionally been a burdensome and time-consuming process, specifically regarding the necessity of numerous sub-authority approvals, such as the consent of the environmental authorities, monument protection authorities, and numerous other special bodies.

As extreme bureaucracy hindered many projects through the years, the legislator appears to have realized the key importance to reflect on developer initiatives; a set of new building regulation rules, many technical, was put in place with new regulations.

Coming into effect via consecutive governmental decrees, the so-called National Building Registry (the “Registry”) has been established. The Registry represents a breakthrough, fully IT-based, comprehensive and consolidated, up-to-date, and authentic central system of electronic applications, data, and documents for all kinds of building activities and construction licensing matters.

The Electronic Documentation System (EDS), a major application supporting the Registry, was introduced to implement the e-administration of building licensing proceedings, e.g. electronic submission of petitions and plans, adoption of authority resolutions and communication between authorities and applicants.

A further inter-active sub-system of the Registry, also communicating with the EDS, is a regulated electronic construction log (e-log) application; with a few exceptions for certain building types, an e-log has been compulsory for all construction projects started after October 1, 2013.

A paper-form construction log has long been applicable for all building activities subject to authority licensing or acknowledgment procedures, and to public procurement rules. Among other purposes, a particular importance of the construction log lies with its later use for reference in authority and court proceedings, in case of any debate about legal compliance or the contractual adequacy of construction works performed.

The e-log is now functioning as an electronic application available for users with password protected client port registration through the National Building Registry subpage of the dedicated webpage (www-e-epites.hu).

Building authorities automatically put the e-log in standby mode upon the issuance of a building permit, and standby mode may also be ‘switched on’ by the property owner/developer. An actual e-log application is then activated and opened upon the takeover of the building site by the building contractor.

Unlike in the past, a single e-log record is associated with each construction project, irrespective of the number of associated contractual documents and the number of contractors. A so-called ‘main log’ section is opened and kept up-to-date by the general contractor in charge, while individual ‘sub-logs’ are kept by each of the sub-contractors. The main log and the sub-logs are further articulated to virtual title pages, registry parts, and summary sheets, as well as associated disclosures, such as: authority notes, fulfillment verification log, subcontractor registry, etc. All e-log chapters remain opened until the contractor leaves the building site post-completion.

Access and insight may also be possible for, among others, the building authorities, the tax authority, the property owner/developer and his proxies, the building technical supervisor, and the designer instructor.

Closed logs in the National Building Register remain available for subsequent authority surveys, such as to compare the planned, licensed, and realized status of the building.

Although the real usefulness and effectiveness of the new building regulations are disputed, the technical background and conditions of the authority licensing procedures have certainly improved. By means of an e-log, the construction project and its participants’ notes will be easier to follow and overlook. Any deviation from original construction drawings and developer instructions, any defaults or additional works, as well as any other circumstances that may affect financial settlement or allocation of responsibility will be much easier to identify and referred to later.

Practice will tell later whether the communicated goals of remote access and easy handling, decrease of bureaucracy and of chain debts of construction entrepreneurs, as well as the increase in transparency, authenticity and clarity are in fact reached, and whether all these really support a quicker licensing process and a more flexible implementation of construction projects in line with investors’ true interests.

 

 

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