Sweeping building industry reforms pass NSW Parliament

12 JUN 2020

 

The following pieces of legislation passed the NSW Parliament last week representing the first round of significant reforms to the building industry to be introduced in the state in response to the national Building Confidence—Improving the effectiveness of compliance and enforcement systems for the building and construction industry across Australia report:

  • Design and Building Practitioners Bill 2020; and
  • Residential Apartment Buildings (Compliance and Enforcement) Bill 2020.

Design and Building Practitioners Bill 2020 (“DBP Bill”)

The DBP Bill introduces requirements for key practitioners preparing and carrying out construction in accordance with regulated designs to issue various declarations confirming their compliance with the Building Code of Australia (“BCA”) and other applicable requirements to ensure their accountability across the planning, design and construction stages of developments.

Important matters to note include the following:

  • The Bill prescribes categories of “regulated designs”, including (among other things) designs prepared for “building elements” such as fire safety systems, waterproofing and internal and external load-bearing components.
  • Registered design practitioners (including architects, engineers etc.) will be required to provide a “design compliance declaration” in connection with regulated designs prepared by the practitioner.
  • Building contractors will be required to provide “building compliance declarations” confirming compliance with the BCA and whether the building work was built in accordance with the regulated design.
  • Amendments in the upper house created an additional requirement for professional engineering work defined as “work that requires, or is based on, the application of engineering principles and data” to be completed by a registered professional engineer. 
  • The Bill clarifies that a person who carried out construction work owes a duty of care to exercise reasonable care to avoid economic loss caused by defects to each owner of land in relation to which construction work is carried out (and subsequent owners).

Residential Apartment Buildings (Compliance and Enforcement) Bill 2020 (“RAB (Compliance and Enforcement) Bill”)

The RAB (Compliance and Enforcement) Bill provides the Building Commissioner with significant powers to monitor the construction of residential apartment developments and address serious defects arising during the construction process.

Important reforms include the following:

  • Introduction of a much broader definition of the term “serious defect”, which now includes (among other things) a defect in a building element that is attributable to a failure to comply with the performance requirements of the Building Code of Australia, relevant Australian Standards or the approved plans.
  • Developers are now required to notify the Secretary at least 6 months (but no more than 12 months) before an application for an occupation certificate is made. Subsequent notices can also be provided where circumstances change and the date for the application is brought forward or pushed back. A failure to notify will empower the Secretary to make an order prohibiting the issue of an occupation certificate and the registration of a strata plan or strata scheme.
  • The Secretary is also empowered to prohibit the issue of an occupation certificate or registration of a strata plan where a rectification order has been issued and not complied with.
  • Wide-ranging powers are provided to the Secretary (and the Building Commissioner and authorised officers under delegation) to gather information, conduct inspections, enter construction sites and detect and investigate building defects.
  • The Secretary may issue a stop work order which requires a developer to ensure that building work stops where the Secretary is of the opinion that building work is, or is likely to be, carried out in manner that could result in significant harm or loss to the public or occupiers of the building or significant damage to a property.
  • The Secretary may issue a building rectification order where a reasonable belief is held that building work was or is being carried out in a manner that could result in a serious defect. The order requires the developer to carry out or cease carrying out work necessary to eliminate, minimise or remediate the serious defect.
  • Introduction of a right of appeal to the Land and Environment Court for developers against prohibition orders, stop work orders, rectification orders and compliance costs notices.

The provisions are currently scheduled to commence on 1 September 2020 and will apply to the construction of Class 2 buildings moving forward and all Class 2 buildings (including those with a Class 2 component) built in the last 10 years.

For further information on these planning and environmental law updates, please contact Adam Seton on aseton@marsdens.net.au or (02) 4626 5077 and David Baird on dbaird@marsdens.net.au or (02) 4626 5077.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.  

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