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Residential Focus

28 January 2020

#Property & Real Estate

Published by Divya Chaddha, Adrian Zagami

Residential Focus

‘Dodgy developer’ database: The NSW Government takes a further step in its crack-down on ‘dodgy developments’

The NSW Government has been particularly active in the past year following high profile defect related evacuations of residential high rises, with the introduction of multiple reforms to strengthen compliance and standards in the industry. 

The momentum continues with the Minister of Better Regulation and Innovation, Kevin Anderson’s proposal announced on 21 January 2020 to introduce a risk-ratings tool to identify risky projects (coined the ‘dodgy developer’ database) allied with new powers given to the NSW Building Commissioner to halt projects and prevent occupation certificates from being issued on the suspect or risky developments. 

If the NSW Building Commissioner exercises this power and disallows the issuing of an occupation certificate, it would effectively prevent the settlement of the off-the-plan development and the affected buyers would have their deposits returned.

The risk-rating tool will factor in dozens of metrics such as history of the company in areas such as workplace safety, customer complaints, age of the business, suspicions of ‘phoenix’ activity and financial credibility. It is anticipated that the ‘dodgy developer’ database will be developed by this July and the data will be available for purchase by prospective apartment buyers by mid-2021.

There are concerns that the tool, being developed by credit rating agencies, will focus on credit risks and there will be difficulty in obtaining information about defects and suspected phoenix activity.

This proposal is set to be discussed at a meeting of interstate building ministers next month.

Author: Divya Chaddha & Adrian Zagami

In the media

RICS delivering better fire safety with new UN backed global standard
The Royal Institution of Chartered Surveyors (RICS) has collaborated with a coalition of over 70 international organisations to develop a new fire safety global standard. The International Fire Safety Standards will be open for global consultation until 23 March with the final international standard to be published later in 2020 (23 January 2020).  More...

Australia’s Construction Sector Must Change
Both around the world and in Australia, construction project delivery must change if needs associated with building and infrastructure are to be met, a leader in construction technology says (23 January 2020).  More...

Arup: Five-minute guide to zero net energy in buildings
As the concept of Zero Net Energy gains traction around the world, Arup have published a Five-minute guide to zero net energy in buildings. The guide provides a brief introduction to the some of the key definitions, approaches, metrics, strategies and essential items required to help achieve zero net energy and carbon (23 January 2020).  More...

Holcim achieves Australia-first milestone with EPD for ViroDecs
Holcim has become the first Australian company to publish an Environmental Product Declaration (EPD) for its ready-mix concrete range known as ViroDecs. Holcim can now quantify for customers the total environmental impacts of its ready-mix concrete (22 January 2020).  More...

Australian solar set to bounce back to ‘record’ 1.96GWac roll-out in 2020
Yet another bright forecast has emerged for renewable energy prospects in Australia this year, with record installations now being predicted after a slump in the second half of 2019, according to consultants at Rystad Energy (22 January 2020).  More...

Top eight styles for houses in 2020
Almost 100 years later, the home design of the new 20’s may not be ‘roaring’, but rather defined by energy efficiency, new building technologies and evolving design trends, according to experts from across the industry (22 January 2020).  More...

Cratered confidence locks Australia into slow growth’
Amid drought and housing-related negatives, including cautious consumers and a downturn in housing construction, Australia now faces a third threat: cratered confidence among consumers and businesses, Deloitte cautioned (21 January 2020).  More...

Challenges for the Construction Industry
A recent report sponsored by Procore, a US based construction project management software company, examines the top challenges facing the construction industry today and how firms are leveraging technology to combat them (18 January 2020). More...

CEFC launch green home loan
The Clean Energy Finance Corporation (CEFC) has launched a new green home loan to encourage the construction of energy efficient homes throughout Australia. CEFC has committed $60 million to the program, which will deliver discounted interest rates to qualifying builders and home buyers. Read the CEFC fact sheet on financing sustainable design principles for new homes (14 January 2020).  More...

Tiny houses could ease housing pressures
According to the ALGA paper on tiny houses, Australia lacks a national affordable housing strategy, and there has been no national dialogue between the three levels of government on housing or planning. (13 January 2020).  More...

Financial shock looms for those looking to rebuild, RFS boss warns
Those who lost homes during the state’s ravaging bushfires may face higher than expected re-building costs because of the need to comply with tougher standards, Rural Fire Service Commissioner Shane Fitzsimmons has warned. He said the RFS had been given a role in advising on building and planning regulations in bushfire prone areas since the early 2000s, but that left the “legacy development” of the previous 200 years (17 January 2020).  More...

HIA: Lending for Construction of New Homes Falls in November
The ABS has released monthly data tracking lending for construction and purchases of new homes, lending for home renovations, and purchasing established homes for November 2019. Lending to households building a new home dropped considerably during the month. The number of construction loans slid back8.4 per cent, dropping to the lowest level since 2012(16 January 2020).  More...

MBA: New Home Starts Hit 7-Year Low As Infrastructure Finally Grinds Into Action
Official results released this morning by the ABS indicate that new home building starts suffered an 11.7% reduction during the September 2019 quarter. The volume of engineering construction work done inched up by 0.5% over the same period (15 January 2020).  More...

Australian building codes don’t expect houses to be fire-proof – and that’s by design
More than 2,000 homes have been destroyed in Australia since the start of the bushfire season. Appropriate building codes are about weighing costs and benefits. Only analysing the reasons buildings were destroyed will tell us if more needs to be done (14 January 2020).  More...

Greenlight for Pagewood Green
Developer Harry Triguboff has been given the green light to embark on the second and final stage of the biggest residential project in his 56-year property career, Pagewood Green (28 January 2020).  More...

Reforms to improve the building and construction industry
Plans to overhaul the building and construction industry will improve transparency, accountability and quality of work. The plan outlines how the NSW Government will overhaul the building and construction industry under six reform pillars (23 January 2020).  More...

NSW Government proposes ratings scorecard for builders to prevent construction disasters
The NSW Government wants to introduce a range of measures to clamp down on dodgy developers and prevent a repeat of the Opal and Mascot towers cracking crises (21 January 2020).  More...

Builders hail proposed construction site reform plan as a ‘game-changer’
The building industry has welcomed the NSW government’s plan to overhaul management of construction sites and restore confidence to the sector, calling the reforms a “game-changer” that will prevent unscrupulous operators from erecting apartment blocks (21 January 2020).  More...

Published

Australia Bureau of Statistics
15/01/2020 Building Activity, Australia, Sep 2019 (cat no. 8752.0)
15/01/2020 Construction Activity: Chain Volume Measures, Australia, Sep 2019 (cat no. 8782.0.65.001

Practice and courts

MBA: building and construction trade skills shortages
The latest information on indicative skills shortages from the Department of Employment, Skills, Small and Family Businesses (Ratings Summary – Labour Market Analysis of Skills Occupations, published September 2019) shows construction trade shortages by state (metro and regional) (15 January 2020).  More...

BDAV: Australian Housing Data Dashboards
The CSIRO have developed a suite of dashboards to help those involved in the residential building industry to get greater understanding of how we are going at moving our new dwellings and suburbs towards higher energy efficiency and lower emissions (14 January 2020).  More...

New NatHERS certificate to be rolled out by 30 April 2020
A new NatHERS certificate will soon come into use as software tools transition to Chenath Engine version 3.21.The new NatHERS certificate has been developed after significant consultation with industry users and will replace the previous “universal certificate” for all new assessments from 1 May 2020.  More...

Green Building Council of Australia (GBCA) draft credits
GBCA have introduced eight categories to more accessibly define a building’s sustainability. Within these categories there are a number of draft credits that all buildings seeking a Green Star rating are expected to comply with: these are proposed as new Minimum Expectations for every Green Star rated building. Feedback is invited until the end of February 2020.  More...

Cases

Goncalves v Bora Developments Pty Ltd; Bora Developments Pty Ltd v Goncalves [2020] NSWCATAP 9
CONTRACTS — Construction and interpretation — Parol evidence rule — evidence of subsequent conduct inadmissible in the interpretation of a contract wholly in writing — Termination — Breach of term — Remedies — Damages — After repudiation – Quantum Meruit - Contract price providing a ceiling on the amount recoverable

Samimi v Commissioner for Fair Trading, Department of Customer Service [2020] NSWCATAP 7
APPEAL - Civil and Administrative Tribunal (NSW) – Home Building – Review of decision to refuse application for contractor licence – Whether Tribunal denied appellant procedural fairness – Whether Tribunal biased – Whether Tribunal had regard to an irrelevant consideration – Whether the Tribunal’s decision was legally unreasonable

Akbarian v Stibilj
APPEAL – home building – claim for variations on quantum meruit basis – leave to appeal refused – no error of law – leave to appeal declined (NSW) Home Building Act 1989 (NSW) Cases Cited: Beale v Government Insurance ... and therefore within the time required by the Home Building Act 1989 (NSW) (HB Act) in s 48K(8)

Al-Shinawa v NSW Fair Trading, Department of Customer Service [2020] NSWCATOD 1
REVIEW – Home Building – Application for contractor licence – general building ... Decisions Review Act 1997 Home Building Act 1989 ... work. ADMINISTRATIVE REVIEW – Home Building – Application for contractor licence – general building ... Cited: Administrative Decisions Review Act 1997 Home Building Act 1989 Cases Cited: Briggs v Commissioner for Fair ... relevant law governing this application? The Home Building Act 1989 regulates the residential building industry ... full-time building experience stipulated in the Home Building Act, the director of the company, Mr Touma, had refused

Leclere v Commissioner for Fair Trading [2020] NSWCATAD 15
ADMINISTRATIVE REVIEW – decision to grant contractor licence under Home Building Act 1989 (NSW) – whether applicant is fit and proper person. Home Building Act 1989 (NSW); Home Building Regulation 2014 (NSW)

Legislation

Proclamations commencing Acts
Better Regulation Legislation Amendment Act 2019 No 23 (2019-623) — published LW 16 December 2019
Schedule 1 amends the following Acts—(a)Building and Construction Industry Security of Payment Act 1999 No 46,(b)Building and Development Certifiers Act 2018 No 63,(c)Building Professionals Act 2005 No 115,
Reminder: Proclamation, appoint 23 March 2020 as the day on which Schedule 1.8[3] and [4] to that Act commence.

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

Published by Divya Chaddha, Adrian Zagami

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