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Residential Focus

07 October 2020

#Property & Real Estate

Published by:

Rebecca Weakley

Residential Focus

Building Commissioner makes first prohibition order under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act

Regular readers will recall our previous discussion on the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act), which has been in force since 1 September 2020, in our June, August or September article, or at one of our webinars.

The RAB Act gives the Building Commissioner power to (among other things) prevent the issuing of occupation certificates or the registration of a strata plan for residential apartment buildings where certain requirements are not met or if there is a serious defect.

A prohibition order “is the ultimate signal to the developer that they must resolve any noncompliance or face never having the building sold or occupied”.

Orders made under the RAB Act are listed on a public register on the NSW Fair Trading website and the Building Commissioner has lost no time in flexing his new powers, with the public register showing a Prohibition Order and a Building Work Rectification Order, each issued in late September in relation to a project in Caringbah South.

Grounds

Compliance officers conducted an inspection of the residential apartment building in question on 14 September 2020. During the inspection, it was observed that building work carried out had resulted in serious defects in relation to three elements, namely:

  • cladding, in relation to cavity masonry and masonry veneer construction adjoining the ground floor podium structural concrete slab
  • waterproofing, at the external ground floor podium structural concrete slab, including terraces and planter boxes
  • installation of the elevator, which provided access from the basement level car park directly into residential lots.

Under section 9 of the RAB Act, the Building Commissioner may make an order prohibiting the issue of an occupation certificate or the registration of a strata plan for a residential apartment building if he is satisfied that serious defects exist in the building.

Under section 33 of the RAB Act, if the Building Commissioner has a reasonable belief that building work was or is being carried out in a matter that could result in a serious defect, a building work rectification order may be issued, requiring a developer to carry out or refrain from carrying out building work as specified in the order, to eliminate, minimise or remediate the serious defect or potential serious defect. The Building Work Rectification Order (BWRO) issued by the Building Commissioner on 30 September 2020 was issued in relation to the cladding and waterproofing defects only.

Nature of serious defects

A ‘serious defect’ is defined in section 3 of the RAB Act to include the following (among other things):

  • a defect in a building element attributable to a failure to comply with the performance requirements of the Building Code of Australia (BCA) or the relevant Australian Standards (AS); or
  • a defect in a building product or building element that is attributable to defective design, defective or faulty workmanship or defective materials, that causes or is likely to cause the inability to inhabit or use the building (or part thereof) for its intended purpose, or the destruction of the building or any part of the building.

In relation to the cladding, the compliance officers found no evidence of cavity flashing discharging from the wall to turn down and over the waterproofing membrane at the planters and adjoining the entire ground floor podium slab area during their inspection. This absence prevents the continuity of the flashing and waterproof membrane installation. The Prohibition Order (PO) indicated that the building work constituted a serious defect due to a failure to comply with the performance requirements of clause 2 of AS 4654.2 and that the defect was attributable to either defective design or defective workmanship, which caused or was likely to cause the inability to inhabit or use the building for its intended purpose or the destruction of the building.

The compliance officers found that insufficient heights for termination of the planter and podium waterproofing had been allowed on the external ground floor podium structural concrete slab including terraces and planter boxes. This was found to constitute a serious defect for the same reasons as the cladding.

In relation to the elevator, the compliance officers observed the unpacking, preparation and component assembly for the elevator installations. The developer, however, was unable to provide clarification of details and the personnel carrying out the work were not elevator installation technicians. A week later, a notice was issued requesting further information relating to the design, certification and installation of the elevators. The information had not been received in its entirety by the date of the PO. The elevator installation was found to be a serious defect due to its failure to comply with the BCA, and the defect was attributable to either defective design or defective workmanship, which caused or was likely to cause the inability to inhabit or use the building for its intended purpose or the destruction of the building.

The PO remains in force until revoked by the Building Commissioner or Secretary. Under the BWRO, the developer was ordered to remediate the cladding and waterproofing defects within 28 days and to notify within two business days of completion. The BWRO remains in force until either complied with or revoked by the Building Commissioner or Secretary.

Be warned

This first suite of orders sends a message that the Building Commissioner is willing to exercise, and has shown no hesitation in exercising his new powers. In doing so, it is clear that audit inspections will encompass not just an examination of work carried out but also extend to irregularities observed on site in work in progress. The nature of the defects subject of the BWRO confirm that the potential for water penetration in its various forms is one of the main areas of focus in the audit process.

This is a level of regulatory oversight not before seen in the NSW building industry.

Authors: Christine Jones & Rebecca Weakley

In the media

HomeBuilder scheme: construction industry warns of ‘bust’ if program isn’t extended
The scheme has a looming December 31 end date everywhere except Victoria, forcing some builders to turn potential customers away to meet their obligations with current clients who have signed contracts. Victorians have a three-month extension given the strict, stage four lockdown (02 October 2020).  More...

Helping Builders and Tradies Staring Down Barrel of Destruction
Master Builders Australia commends the Federal Government’s expansion of the First Home Loan Deposit Scheme.  Boosting home ownership and residential building activity are among the most effective ways to fire up aggregate demand, which is exactly what we need right now (02 October 2020).  More...

CFMEU and ACA urge reforms to spark housing construction boom
The CFMEU and the Australian Constructors Association are calling for targeted reforms to drive construction in Build-To-Rent and social housing to stimulate the economy and boost jobs ahead of the Federal Budget (02 October 2020).  More...

HIA: Impact of HomeBuilder evident in detached Building approvals
The impact of HomeBuilder is now emergingin the ABS Building Approvals Dataand there is a significant divergence between the outlook for detached and multi-unit dwellings (30 September 2020).  More...

How Australia’s construction industry can adapt and build resilience in today’s landscape
In Australia, our construction industry comprises nine per cent of GDP and the sector is the largest non-service related industry. Investment in innovation and technology is required to adapt and build resilience both in the short and longer-term, and the most digitally mature organisations are recognising the need for this (29 September 2020).  More...

MBA: Lending Changes Big Boost for home ownership and economic recovery
Master Builders backs removing overly restrictive lending rules that act as a barrier to mortgage and small business finance. Access to finance, land titling and planning approvals can substantially delay building of new homes and measures are needed to remove these impediments and speed up processing of HomeBuilder applications (25 September 2020).  More...

Australia’s Biggest Home Builders Get Even Bigger
Even as the market slowed, Australia’s largest home building companies have increased their activity and revenues over the past year as they edged out smaller rivals and took a larger market share, the latest report shows (24 September 2020).  More...

Taxpayers risk 'missing out' on share of land value surge near new projects
A British rail expert who advised the NSW government says there's a "very short window in which to place" levies on developments and rezoned land (26 September 2020).  More...

SafeWork NSW focusing on falls from heights
SafeWork NSW announced inspectors targeting construction sites for their working at heights compliance. The focus of the inspectors will be on verifying compliance in relation to scaffolds, voids, roofs, edges and skylights (22 September 2020).  More...

Practice and courts

ABAB September 2020 forum communique
The Advisory Board looks to influence digital adoption in construction projects through the various government stimulus packages (25 September 2020).   More...

ABCB Consultations

WMTS-522:2020
For Public Comment Technical Specification for the WaterMark Certification Scheme WMTS-522:2020,incorporates amendments to allow an addition of similar products of alternate design to obtain certification. Closes 28 October 2020

Definition for building complexity
The defined term for 'Building complexity' has been developed in response to a decision of the Building Ministers’ Forum (BMF) that a definition be prepared regarding the design, construction and certification of complex buildings. Closes 01 November 2020

Standards Australia: Drafts open for public comment
Standards Australia are seeking your feedback on a range of standards concerning the plumbing and drainage trade. On this page you will find a complete list of drafts currently  open for public comment from September to October 2020. For more information, please consult the Standards Australia Public Commenting Guide..  More...

GBCA: draft Green Star Homes Standard for consultation
Part of the Green Building Council of Australia’s Future Homes Strategy, the Standard is a key tool to help drive transformation in the residential sector to create a market for healthier, more resilient, energy efficient homes.
Consultation on the draft standard will run until 30 October 2020. A copy of the Green Star Homes Draft Standard and information on how to provide feedback is available here.

2020 National Housing Research Program commences
Research is underway for the suite of projects funded by AHURI as part of the 2020 National Housing Research Program (NHRP). The research will be undertaken by collaborative teams from AHURI’s eight national university research partners. For more details of the 2020 NHRP projects please click here.  More...

NSW

Developers must provide advance notice of building completion
Building developers must provide an expected date that they will apply for an occupation certificate. This notice must be provided at least 6 months in advance and no later than 12 months.   If building developers do not provide notice, fines may apply and/or a prohibition order may be made that stops or delays an occupation certificate being issued. Notice can be given through the NSW Planning Portal or online via here. Reminder: A transitional period applies to developers with residential apartment buildings due for completion within the first six months of the Act starting 1 September 2020. In these cases, notice must be given within two weeks of the new legislation coming into effect.

NSW Revenue: HomeBuilder program
HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.  More...

Cases

NSW

Dave King Building Services Pty Ltd v LeLievre; LeLievre v Dave King Building Services Pty Ltd [2020] NSWCATAP 204
APPEAL – expert opinion evidence – failure to refer to or comply strictly with Expert Witness Code – potential conflict of interest – discretion to reject the tender of an expert report filed and served late APPEAL – application for extension of time to lodge appeal – length of delay – prejudice to other party – prospects of success
Civil and Administrative Tribunal Act 2013; Home Building Act 1989

Legislation

Environmental Planning Instruments
Local Environmental Plan Amendment (Major Infrastructure Corridors—Maps) 2020 (2020-596) — published LW 2 October 2020
State Environmental Planning Policy (Infrastructure) Amendment (Sydney Metro West Interim Corridor) 2020 (2020-591) — published LW 2 October 2020
State Environmental Planning Policy (Western Sydney Aerotropolis) Amendment (Commencement) 2020 (2020-586) — published LW 30 September 2020

Bills introduced  Non-Government – 23 September 2020
Restart NSW Fund Amendment (Rural and Regional Infrastructure Funding) Bill 2020

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:

Rebecca Weakley

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