Strata building defect bond and inspection scheme amendments take effect
On 1 July 2020, the Strata Schemes Management Amendment (Building Defects Scheme) Act 2018 (NSW) (Amendment Act) commenced. The Amendment Act, which received assent in September 2018, amends Part 11 of the Strata Schemes Management Act 2015 (NSW) to make further provision with respect to the rectification of building defects in new strata schemes. The amendments affect developers, owners corporations, builders, building inspectors and building owners of new strata residential and mixed-used buildings four storeys and above.
To recap, the strata building defect bond and inspections scheme (Scheme) commenced on 1 January 2018. The Scheme introduced a process aimed at streamlining the identification and rectification of defects for the benefit of strata residents, builders and developers.
A bill was introduced in 2018 which proposed various amendments to the Scheme, which was to commence on a date to be proclaimed (1 July 2020). We discussed the Strata Schemes Management Amendment (Building Defects Scheme) Bill 2018 (NSW) in a previous edition here. The amendments introduced in the Amendment Act seek to further improve the operation of the Scheme by providing greater certainty, reducing costs and minimising time delays.
Key changes include:
The amendments will impact all parties in the residential strata development sector. Further, the timing of the Amendment Act’s commencement coincides with the introduction of the Design and Building Practitioners Act 2020 (D&BP Act), which commenced on 11 June 2020 (with a number of provisions commencing on 1 July 2021), and the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act), commencing on 1 September 2020. These new pieces of legislation come as part of the NSW Government’s overhaul of the building and construction industry, in a bid to restore public confidence in the sector by cracking down on poor building and construction practices.
The D&BP Act gives the NSW Government the power to regulate almost everyone involved in the design and construction of new buildings, while the RAB Act gives NSW building regulators the unprecedented power to prevent the issuing of occupation certificates or the registration of a strata plan for residential apartment buildings where certain requirements are not met.
In essence, the combined effect of the new legislation will have a significant impact on how the NSW building and construction industry operates, with increased regulation and stricter compliance measures.
Authors: Christine Jones & Rebecca Weakley
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Australian Bureau of Statistics
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El-Rihani v Hotait  FCA 912
CONTRACT – construction – Deed of Separation - meaning of “future liabilities” – whether claims lodged before execution of Deed but unpaid at date of execution are “future liabilities”
CONTRACT – frustration – whether Deed of Separation frustrated by appointment of a liquidator Corporations Act 2001 (Cth) ss 198G, 461, 474, 588FA, 601AA The projects undertaken by Mr Hotait and Mr El Rihani included “residential building work” for the purposes of the Home Building Act 1989 (NSW).
MJH Built Pty Ltd v Robinson  NSWCATAP 133
APPEAL – HOME BUILDING – onus of proof, credibility, leave to appeal. Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014; Home Building Act 1989
Bao Long Guo t/as GD Brother Projects v GB Electrical Services Pty Ltd  NSWCATAP 131
(1) In relation to the application for miscellaneous matters filed by GB Electrical Services Pty Limited on 17 February 2020, a hearing is dispensed with pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (NSW). APPEAL – Building and Construction – Quantum Meruit
Home Building Act 1989 (NSW); Civil and Administrative Tribunal Act 2013 (NSW)
McKenzie Group Consulting (NSW) Pty Ltd v Building Professionals Board  NSWCATOD 76
TRADES AND PROFESSIONS – accredited certifier – disciplinary action – application for review – consent orders
Cohen v Zanzoul trading as Uniq Building Group (No 2)  NSWSC 838
BUILDING AND CONSTRUCTION – contract – defects – whether defendant had opportunity to rectify works – whether plaintiffs failed to mitigate their loss
BUILDING AND CONSTRUCTION – consideration of incomplete works and defective works – use of Scott Schedule
Regulations and other miscellaneous instruments
Environmental Planning and Assessment Amendment (Occupation Certificates) Regulation 2020
(2020-391) — published LW 8 July 2020
Environmental Planning and Assessment Amendment (Modification of Consent) Regulation 2020
(2020-367) — published LW 3 July 2020
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.