Artboard 1Icon/UI/CalendarIcons/Ionic/Social/social-pinterest

Residential Focus

02 June 2021

#Property, Planning & Development

Published by:

Nicholas Achurch

Residential Focus

Design & Building Practitioners Act – building practitioners snapshot

In this third instalment of our series on the Design and Building Practitioners Act 2020 (NSW), we look at the key provisions of the Act and Regulation which apply to building practitioners.

With the bulk of the Act commencing on 1 July 2021, now is the time to examine whether it applies to your business and to consider what you will need to do to achieve compliance.

In our two previous editions, we looked at the implications for design practitioners and principal design practitioners and this latest instalment builds from there.

Do I do work which is caught by the Act?

If you do construction work on Class 2 buildings, or buildings with Class 2 elements, then likely, yes. See our first instalment for a longer discussion on the application of the Act. 

A quick reminder though, that Class 2 buildings are any buildings which contain two or more sole-occupancy units, each being a separate dwelling. If you carry out work in the space from a duplex through to mixed use high rise, you are likely to be caught by the Act and will need to register as a building practitioner.

Am I a building practitioner?

A building practitioner is:

  • a person who agrees under contract or another arrangement to do building work, or
  • if more than one person agrees to do building work, a person who is the principal contractor for the work.

A registered building practitioner is a person who is registered as a building practitioner under the Act.

What do I need for eligibility to register? 

In the case of a body corporate, it must:

  • hold a contractor licence authorising the holder to do general building work under the Home Building Act 1989
  • nominate an individual who is registered as a building practitioner (either as a body corporate nominee or as a building practitioner general) to provide building compliance declarations on behalf of the body corporate.

In the case of body corporate nominee, they must satisfy the following:

  • qualifications must be a holder of a supervisor certificate authorising the holder to do general building work under the Home Building Act
  • experience – must have five years recent relevant practical experience
  • knowledge – must know and understand the following:
    • the Act and this Regulation
    • the Environmental Planning and Assessment Act 1979, including regulations made under that Act, to the extent that the legislation is relevant to this class of registration
    • the Building Code of Australia, Volumes 1 and 2, including documents adopted by reference in the Building Code of Australia
    • building design and construction, including methods, materials and planning.
  • skills must be able to interpret, apply and assess compliance with the relevant requirements of the Building Code of Australia.

In the case of a general building practitioner, they must:

  • as to qualifications, be a holder of an endorsed contractor licence authorising the holder to do general building work under the Home Building Act
  • satisfy the same experience, knowledge and skills criteria as would a nominee.

This is not a dissimilar format to licensing under the Home Building Act, that is, a corporation has to nominate a suitably qualified individual, through which it acts, such that the same expectations are held of a corporation, as an individual.

What is relevant practical experience? 

Relevant experience for a building practitioner is the carrying out of building work involving a Class 2, 3, 9a or 9c building.

Although this will prevent a barrier for experienced Class 1 builders to branch out, in practical terms and assuming the experienced Class 1 builder is a body corporate, it would simply buy talent to satisfy the experience requirement through a nominee. If the experienced Class 1 builder is expanding, this is probably necessary in any event.

How do I apply for registration? 

To apply for registration as a building practitioner, a form must be completed and lodged with NSW Fair Trading, accompanied by supporting evidence that demonstrates the practitioner’s relevant practical experience.

NSW Fair Trading may require further documents or the applicant to submit to an exam to demonstrate the applicant’s skills.

A person’s registration as a building practitioner can be for the period of either one, three or five years.

I  have projects ready, how long will registration take? 

The transitional period from 1 July 2021 to 31 December 2021 allows for prescribed applicants to obtain deemed registered upon application if they meet the list of requirements in clause 100(1) of the Regulation.

Registration will be deemed to be effective on the date that NSW Fair Trading accept the application, which is to be duly made in accordance with section 43 of the Act.

What are my ongoing obligations for continuing registration? 

Building practitioners must complete three hours of approved relevant education and training each year[1], although exemptions may be allowed. The guidelines providing further details about the required relevant education and training, which are not yet published, will be made available on NSW Fair Trading’s website.

The Regulation requires that, in order to maintain their registration, building practitioners must comply with:

  • a code of practice which includes duties to:
    • act in a professional manner
    • act within a level of professional competence and expertise
    • maintain a level of competence
    • avoid conflicts of interest
    • maintain confidentiality.
  • mandatory insurance requirements under section 14 of the Act, which have been deferred until 30 June 2023.[2]

Building practitioners will need to keep this last requirement under review in the lead up to June 2023, although we expect that industry organisations will be making moves to arrange opt-in cover for their members.

As a registered building practitioner, what do I need to do before building work commences? 

A registered building practitioner must, prior to the commencement of building work:

  • obtain copies of all regulated designs from duly registered design practitioners for each aspect of the building work
  • issue a notice of building work commencing to a registered principal design practitioner (if applicable) no earlier than 14 days prior to the date that the Building Work is proposed to commence.

Penalties apply for non-compliance, of up to 200 penalty units in the case of a corporation, or 100 penalty units in any other case.

Where a principal design practitioner has not been appointed, it will be the responsibility of the builder to take all reasonable steps to ensure that:

  • each regulated design for the building work is prepared by a duly registered design practitioner
  • a design compliance declaration is obtained for those designs from a registered design practitioner.

Where a principal design practitioner has been appointed, then the building practitioner must ensure to obtain a principal compliance declaration in relation to all regulated designs used for the particular project.

Failure to ensure that all compliance declarations have been prepared by a duly registered practitioner (including principal design practitioners if applicable) may attract a penalty of up to 3,000 penalty units for a corporation, or 1,000 penalty units in any other case.[3]

What do I need to do when the building work is approaching completion?

In the lead up to an application for an occupation certificate being made, a person making the application must give at least 14 days’ notice, to each building practitioner who did the building work, of the making of the application.

Within seven days after making the application for an occupation certificate, a person making the application must give notice of the lodgement to the building practitioner.

This puts the registered building practitioner on notice that it is required to do two things, dealt with under the headings below.

Building compliance declaration – before OC application lodged

A registered building practitioner must provide, to a person for whom the building practitioner does the building work, a compliance declaration for completed building work, contractor documents and any other required documents. This must be done before making any application for an occupation certificate.

With the minimum notice period in mind, the building practitioner will need to have had a system in place to assemble the required information well in advance of receiving the 14-day notice.

The compliance declaration is to cover:

  • whether or not the building work complies with the requirements of the Building Code of Australia
  • whether or not the building work complies with other applicable requirements
  • if the building work does not comply with the requirements, the steps required to be taken to ensure compliance
  • for a regulated design used for the building work, whether or not the design was prepared by a registered design practitioner and the building work was built in accordance with the design
  • whether or not a design compliance declaration has been obtained in relation to regulated designs used for the building work
  • whether or not a registered principal design practitioner was appointed in relation to the building work
  • whether or not a principal compliance declaration was obtained in relation to the regulated designs and design compliance declarations relating to the building work.

The building compliance declaration must not be false or misleading in any material particular. The maximum penalty for providing false or misleading information is 2,000 penalty units or imprisonment for two years, or both.

The required contractor documents are:

  • a list of people who have agreed under a contract or arrangement with the registered building practitioner to do any of the building work
  • a list of any other people prescribed by the Regulation who have done building work on the building
  • a list of the work done by each of those people in relation to the building work
  • copies of final designs used for the building work that are not regulated designs and are designs of a class prescribed by the Regulations for the purposes of this paragraph
  • other documents prescribed by the Regulations, as follows[4]:
    • a copy of each variation statement that is required for building work, where a variation statement must cover:
      • the type and purpose of variation
      • the part of the building to which the variation relates
      • an explanation of how the variation meets the requirements of the Building Code of Australia, including a list of the applicable provisions of the Code
      • a list of the other standards or codes that have been applied in carrying out the work to which the variation relates.
    • a copy of each regulated design that contains additional details not reflected in the construction issued regulated design, but only if the additional details do not cause the building work to which the design relates to being varied
    • if a principal design practitioner is appointed for building work, the principal compliance declaration for all regulated designs from a registered principal design practitioner whose registration authorises the practitioner to provide a declaration as to the matters to which the declaration relates.

Provide relevant documents to the Secretary – after OC issued

Within 90 days after an occupation certificate has been issued for part or all of the building to which the building work relates, the building practitioner must provide relevant documents to the Secretary.[5]

The relevant documents include each regulated design for which a design compliance declaration has been provided that reflects the building work that was carried out.[6]

Non-compliance may attract a penalty of up to 300 penalty units in the case of a corporation, or 100 penalty units in any other case.

How should I prepare for 1 July?

Building practitioners should seek deemed registration within the transitional period until 31 December 2021, simply to avoid basic non-compliance through lack of registration.

The next focus should be on:

  • integration of the requirements of the Act into business processes, with the aim of effectively managing the obtaining of design compliance declarations and the issuing of building compliance declarations
  • training staff and sourcing CDP for nominees and generals
  • updating risk registers.

Building practitioners should stay in touch with their brokers and industry organisations as products are brought to market in the lead up to June 2023, to deal with the new insurance requirements under the Act.

For work in progress, that is, commenced before 1 July 2021 but not completed by that date, a modified form of the regime under the Act is imposed and building practitioners should familiarise themselves with the transitional provisions in this regard.

Authors: Christine Jones & Nicholas Achurch

[1] Clause 4.1 of the Draft Continuing Profession Development (CPD) Guidelines for Prescribed Practitioners
[2] Clause 106 of the Design and Building Practitioners Regulation 2021 (NSW)
[3] Section 18 of the Act
[4] Clause 18(2) of the Regulations
[5] Section 15 of the Act
[6] Section 15(4) of the Act

In the media

Consultation open on building surveyor registration discussion paper
A discussion paper in response to the Shergold Weir Building Confidence Report (BCR) is now open for public comment. Recommendation four of the BCR suggested action on career pathways for building surveyors (27 May 2021).  More...

Home building hits six-year high
The total value of home building work surged by 5.1 per cent to $18.95 billion in the first quarter of 2021 – the biggest lift in six years – with construction of detached houses and renovations leading the way (26 May 2021).  More...

HIA: A record year of housebuilding is underway
A record number of detached housing starts will occur in the 12 months to September 2021 with more than 146,000 detached houses commencing construction. This is more than 20 per cent higher than the peak of the previous boom in 2018. This forecast is contained in HIA’s economic and industry Outlook Report (20 May 2021).  More...

Sydney’s new buildings soar towards net-zero
New buildings will be more energy-efficient, use more renewable energy and support the transition to net-zero emissions under an Australia-first plan to include energy targets in development applications (25 May 2021).  More...

Surge in insurance premiums to push up reno costs for apartment owners
A hike of up to 50 per cent in premiums for building work on apartment blocks, terraces and townhouses will start to be passed onto owners from late July (22 May 2021).  More...

NSW building standards unsuitable to meet future climate conditions
Current benchmarks for residential energy and water efficiency, under the NSW Building Sustainability Index, are outdated and unsuitable for contemporary climate change projections, according to a recent report (20 May 2021).  More...

Safe cladding products endorsed by expert panel
NSW Minister for Better Regulation Kevin Anderson has announced a major milestone for Project Remediate with the release of an independent report outlining four safe and non-flammable product categories that represent the first tranche to replace high-risk cladding (19 May 2021).  More...

'It's gut-wrenching': Another house cracking fiasco unfolds in Sydney's west
Homes in Spring Farm near Camden are sinking and cracking at "every door and window", prompting homeowners to launch a class action and more calls for better regulation of Sydney's constant expansion (18 May 2021).  More...

Published – articles, papers, reports

ABS Statistics
26 May 2021: Construction work done increases in March.
Construction Work Done, Australia, Preliminary.

AS ISO 12006.2:2021
Building construction – organization of information about construction works – framework for classification. Standards Australia AS ISO 12006.2:2021.

SA TS 5342:2021 – technical specification for building commissioning
Standards Australia SA TS 5342:2021.

Practice and courts

ABCB consultations

Consultation open: Guide on evidence of experience for building surveyor registration
24 May 2021 – a discussion paper in response to the Building Confidence Report is now open for public comment. Responses to questions in the discussion paper are welcomed until 19 July 2021. Click here to learn more.

Consultation on NCC 2022 public comment draft (stage one) now open
Consultation on stage one of the National Construction Code (NCC) 2022 public comment draft is now open. This first stage of consultation seeks comment on all proposed NCC amendments except energy efficiency and condensation proposals that arise from project work. Responses are invited until 2 July 2021.

Discussion paper: Draft National Building Product Assurance Framework – a response to the Building Confidence Report
A discussion paper is now open for public comment in response to the Building Confidence Report. The Framework seeks to address the problems associated with building product safety. Closes 6 June 2021.

ABCB: Improvements to the code’s structure and format will be implemented for NCC 2022
To guide users through the changes, the ABCB has developed a range of supporting resources that will be released in stages leading up to the publication of the NCC 2022 public comment draft on 10 May 2021.

Adoption of NCC 2022 to be delayed
The delayed adoption will also see adjustments to key dates in the amendment cycle process for NCC 2022 to allow stakeholders time to participate. These adjusted dates include:
May – July 2021: NCC 2022 public comment draft released for public consultation.
May 2022: NCC 2022 preview published here.
If you have any questions regarding the delayed adoption of NCC 2022, please submit an online enquiry.

Comcare consultation: Proposed change to plant registration – removal of a condition
Comcare is considering removing its imposed condition on all plant registrations that “a registration holder must notify Comcare annually of any maintenance, repair, inspection or testing of an item of plant”. Plant includes items such as cranes, machinery, vehicles, forklifts, lifts, boilers, gas cylinders, Comcare invites submissions on the proposed removal of the condition until 24 June 2021. Read more here.

RICS cost prediction professional statement, global first edition
This professional statement provides an overview of global best practice in cost prediction and the implementation of international construction measurement standards for cost management professionals. The standard becomes mandatory for RICS professionals and RICS-regulated firms on 1 July 2021. Click here to learn more.

NSW

The draft Design and Building Practitioners Regulation 2020
The NSW Design and Building Practitioners Act 2020 provisions of the Act will commence on 1 July 2021.

Have your say on changes to how building design and construction is regulated in NSW
The development of supporting regulations is the next step on delivering on this piece of the Government’s building reform agenda, with the scheme commencing on 1 July 2021. In response to your feedback, we've drafted a report that explains the changes that were made to the draft regulation. Click here for more information.

Conflicts of interest – savings and transitional arrangements
Clause 71 of the regulation introduces savings provisions for certain conflict of interest situations where the certifier was appointed before 1 July 2020 and the work will be completed before 1 July 2022. The provisions relate to council-certified developments and to developments where the certifier gave advice on how to comply with the BCA deemed to satisfy provisions. For all the changes, access the amendment regulation here.

New mandatory standards for building rectification
The standard will be reviewed and updated prior to the 1 July 2021 commencement of the Government’s game changing building reform agenda underpinned by the Design and Building Practitioners Act 2020. The first Practice Standard will initially apply to certifiers working on residential apartment buildings, where the majority of problems and complaints have been received. The Practice Standard for registered certifiers is available on the Fair Trading NSW website.

Cases

Anjoul v Anjoul [2021] NSWSC 592
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – residential building work – consequences of failure to obtain contractor licence and insurance – where the owner-builder defendant pleaded that the Act barred the plaintiff from being entitled to recover any money under a deed in respect of the residential building works because he did not have a contractor licence or insurance as required by the Act – where the Court found that the Act did not prohibit the plaintiff from enforcing the deed if it was enforceable or from obtaining proper restitution if the deed was not unenforceable.
CONTRACTS – remedies – liquidated damages – penalty – where the defendant claimed that a term of the deed was a penalty and therefore unenforceable – where the Court found that the provision was not a penalty because it could not properly be characterised as having the function of inducing performance of another provision of the deed.
CONTRACTS – unjust contracts – Contracts Review Act 1980 (NSW) – unjust – where the plaintiff sought to enforce a deed of acknowledgement of debt – where there was a material inequality of bargaining power between the plaintiff and defendant – where the plaintiff exercised unfair pressure or unfair tactics in causing the defendant to enter into the deed – where the Court found that provisions of the deed were unjust at the time the deed was entered into within the meaning of s 7 of the Act.
EQUITY – equitable remedies – restitution – contract unenforceable – where the plaintiff claimed in the alternative that the defendant held the property on constructive trust in favour of the plaintiff in proportion to the plaintiff’s contributions to the renovation of the property – where there was no joint endeavour between the parties in the sense of Muschinski v Dodds – where the Court found that the plaintiff was not entitled to an equitable interest in the property on the basis of a partial constructive trust.
EQUITY – unconscionable conduct – special disability or disadvantage – whether unconscientious advantage taken – where the defendant claimed that her signature to a deed was the product of duress or undue influence or unconscionability, and that she signed the deed in reliance upon a representation by the plaintiff – where the Court found that there was no relationship of influence between the plaintiff and defendant to establish undue influence – where the Court found that the deed should be set aside in equity on the ground that it was procured by the plaintiff taking unconscionable advantage of the defendant’s special disadvantage.
LAND LAW – caveats – caveatable interest – where the defendant claimed that a deed executed by her did not grant a charge over the property in favour of the plaintiff to secure the payment of monies under the deed so that the plaintiff did not have a caveatable interest to support the caveat that he lodged – where the Court found that the defendant’s consent to the lodgement of the caveat demonstrated an intention that a charge would be created over the property by the lodgement.
RESTITUTION – nature of restitutionary liability – unjust enrichment – at the plaintiff’s expense – where the plaintiff’s claim for the enforcement of a deed of acknowledgment of debt failed – where the defendant disputed the amount claimed by the plaintiff – where the defendant was not given an opportunity to verify the amount claimed – where the plaintiff failed to provide proof at the hearing for the amount claimed – where the defendant should not in principle enjoy the whole benefit of the renovation works for nothing – where the Court found that the plaintiff may be entitled to restitution from the defendant for the reasonable costs of the residential building work done and materials supplied, and the value that his participation in the renovation added to the property.

Touma v Colantuono [2021] NSWCATAP 152
1. Time to lodge the appeal is extended, to the extent necessary, to 23 February 2021. 
APPEAL – failure to comply with directions – adjournment – procedural fairness – contracting parties. 
Civil and Administrative Tribunal Act 2013 – Civil and Administrative Tribunal Rules 2014 – Home Building Act 1989.

Seraglio v Le Sommet Pty Ltd [2021] NSWCATAP 150
BUILDING AND CONSTRUCTION – contract – written term that any variations to the contract were to be in writing – alleged oral variation – tribunal not persuaded oral variation occurred – finding of fact not glaringly improbable, contrary to incontrovertible facts or compelling inferences.
APPEALS – procedural fairness – failure to give reasons – adequacy of reasons – minimum acceptable standard – standard met.

Housman v Camuglia [2021] NSWCA 106
CONTRACT – damages – claim for consequential loss – construction works caused damage to neighbour’s land – claim for lost rent – trial judge found apartments unlettable in light of damage to stairway – finding based on evidence of landlord and letting agent – no reference in reasons to unchallenged engineering evidence that stairway safe – whether reasons of trial judge inadequate – inutility of inadequate reasons as a ground where appeal is by way of rehearing – whether trial judge misused evidence admitted on limited basis – no error made out.
APPEALS – requirement of leave – whether appellants required leave for separate challenge to costs order based on rejection of Calderbank offer in circumstances where there was an appeal as of right – construction of “an appeal from a judgment or order as to costs only” in District Court Act 1973 (NSW), s 127(2)(b) – history of s 127(2)(b) and s 101(2)(c) of Supreme Court Act 1970 (NSW) – history of United Kingdom antecedents – appellants entitled to challenge special costs order as of right.
COSTS – Calderbank letter – whether error in finding that appellants had unreasonably rejected offer – significance of factual error in letter – significance of offer being rejected before service of all evidence – no error made out.

Bell Solar Pty Ltd v Commissioner for Fair Trading [2021] NSWCATOD 70
ADMINISTRATIVE REVIEW – home building – electrical contractor licence – installation of solar panels – refusal to renew licence – application for stay.

Style Tiles and Bathrooms Pty Ltd v Commissioner for Fair Trading [2021] NSWCATOD 69
The application to extend time for the lodging of the application is refused. 
PROCEDURAL – application for extension of time – length of delay – whether reasonable prospects of success.
Civil and Administrative Tribunal Act 2013 – Civil and Administrative Tribunal Rules 2014 – Home Building Act 1989.

Impala Kitchens Pty Ltd v Yunaev [2021] NSWCATAP 146
HOME BUILDING – effect of agreement during earlier proceedings and withdrawal of earlier proceedings.
1. Time for filing the notice of appeal is extended to and including 6 January 2020.
2. Leave to appeal is refused.
3. The appeal is dismissed.

Benjamin v Geneville Constructions Pty Ltd; Geneville Constructions Pty Ltd v Benjamin [2021] NSWCATAP 138
Home building – pre-contractual work – scope of contract compensation mechanism on termination for unforeseen conditions – whether residential building work.

Esteban v 2M Projects Pty Ltd [2021] NSWCATAP 137
APPEALS – leave to appeal – appeal from exercise of discretion – miscalculation of claim – no factual error – decision not unreasonable – leave to appeal refused.
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – building dispute.

Legislation

Regulations and other miscellaneous instruments
Residential Apartment Buildings (Compliance and Enforcement Powers) Amendment Regulation 2021 (2021–252) – published LW 28 May 2021.

Environmental Planning Instruments
State Environmental Planning Policy (Activation Precincts) Amendment (Wagga Wagga) 2021 (2021–245) – published LW 21 May 2021.

Regulations and other miscellaneous instruments – reminder
Design and Building Practitioners Regulation 2021 (2021–152) – this regulation commences on 1 July 2021 and is required to be published on the NSW legislation website.

Disclaimer
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 article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Nicholas Achurch

Share this