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Residential Focus

09 October 2019

#Property & Real Estate

Christine Jones

Published by Christine Jones, Divya Chaddha

Residential Focus

Draft Design and Building Practitioners Bill 2019 released for public consultation

On 2 October 2019, the NSW Government released the draft Design and Building Practitioners Bill 2019 (Bill). The draft Bill will be open for public consultation until 16 October 2019.

The draft Bill forms part of the NSW Government’s plan to ‘build stronger foundations’, which is being implemented by the Government in response to the Shergold-Weir Report, which we wrote about in a previous article here.

The draft Bill introduces accountability measures for building practitioners involved in the design of certain buildings to be prescribed by the Regulations that will sit alongside the Bill (yet to be developed, although it is said that the relevant class of buildings will begin with multi-storey residential buildings and expand over time). It does so by introducing key reforms intended to improve the quality and compliance of design documentation with the Building Code of Australia (BCA) and other relevant regulations. 

In particular, the draft Bill introduces the concept of ‘regulated designs’, which include designs for a building element and performance solutions for prescribed classes of building work or a building element. If a design is recognised as a ‘regulated design’ for the purposes of the new legislation, design practitioners involved in those designs must be registered under a new registration scheme (and insured as a condition of registration) and will be required to declare in a form prescribed by the accompanying Regulations that the design is compliant with the BCA and other applicable requirements (‘design compliance declaration’). 

In addition, building practitioners (also to be registered and insured) who subsequently carry out the construction work for a project with a ‘regulated design’, are required to declare, amongst other things, if the building is constructed in accordance with the ‘regulated design’ and complies with the BCA (‘building compliance declaration’).  If any part of the building does not comply with the BCA, the builder may be at risk of a fine up to $330,000 (3,000 penalty units). 

By making a false and misleading statement, practitioners may be at risk of a fine up to $220,000 (2,000 penalty units) or imprisonment for 2 years, or both.

It appears that developers (who are not otherwise designing or carrying out the work) are not required to give declarations under the draft Bill.

In addition to the compliance elements with their associated civil penalty and disciplinary implications, the draft Bill also imposes on a person who carry out construction work (which includes building work and design work) a duty to “exercise reasonable care to avoid economic loss caused by defects in or related to a building for which the work is done”. 

The classes of buildings to which the duty relates are to be prescribed by the Regulations. The duty will benefit a wide range of owners, including owners corporations and successors in title. 

The draft Bill expressly provides that the new duty is in addition to duties, statutory warranties or other obligations imposed by the Home Building Act 1989 (NSW) (HBA), other Acts or the common law.  Unlike the statutory warranties under the HBA, the Civil Liability Act 2002 (NSW) will apply to the new duty, that is, an action for breach of the duty will be considered an apportionable claim.

If passed, the draft Bill would apply to arrangements for the preparation of regulated designs or the carrying out of building work entered into after commencement. 

Next stages

The NSW Governments intends on presenting a final Bill into Parliament by the end of 2019 and aims to consult on the Regulations which will sit alongside the final Act in 2020.

The draft Bill indicates that the Regulations will set out the categories of ‘regulated design’ to which the new legislation will apply.  It is also proposed that the Regulations may make provision for or with respect to prohibiting the issue of complying development certificate or a certificate under Part 6 of the Environmental Planning and Assessment Act 1979 unless one or more compliance declarations or final regulated designs have been provided to the issuer of the certificate.

Further updates will track the progress of the draft Bill and the all-important Regulations, which will reveal the full extent of the application of the new measures, in particular as to the classes of affected buildings.

Author: Christine Jones & Divya Chaddha

In the media

HIA: New approach to population planning a positive step
The Housing Industry Association (HIA) supports the Federal Government’s intention to take a new approach to population planning to underpin Australia’s economic growth and to ensure that our cities and regions are prepared for the future (04 October 2019).  More...

Lenders should pass on rate cut in full and without delay
Master Builders Australia’s Chief Economist Shane Garrett welcomes RBA’s decision given it has the potential to boost demand across the economy and reduce financing costs for the 370,000 small businesses in the building and construction sector (01 October 2019).  More...

HIA: Housing market warms up but home building still cooling
There may have been positive developments in the broader housing market since mid-year but both the HIA New Home Sales Report and ABS building approvals figures show that new home builders were still feeling the winter chill in August, stated HIA Senior Economist Geordan Murray (01 October 2019).  More...

Engineers Australia: the public release of the draft Design and Building Practitioners Bill
Engineers Australia has and continues to support the first recommendations in both the Shergold-Weir report and the Opal Tower report that there must be compulsory registration of engineers in NSW. Engineers Australia calls on the Government to make good on its promise to introduce compulsory registration of engineers (01 October 2019).  More...

Construction quality problems will not impact housing demand
Well known quality problems in Australia’s construction market will not impact overall levels of new housing demand but may cause some shift in demand away from high-rise apartments towards lower density dwelling stock, a leading housing industry economist says (30 September 2019).  More...

Construction companies collapsing at record rate as building slowdown bites
New figures reveal the number of construction companies going under in NSW hit its highest level in four years last quarter, as experts raise concerns about "phoenixing" — where a business is liquidated to avoid paying its debts (26 September 2019).  More...

Australia’s biggest home builders shrink
Australia’s biggest home builders have seen significant declines in revenues and new home starts as the slowdown in new residential construction continues to bite, the latest research has found (26 September 2019).  More...

HIA reveals Australia's top homebuilders for 2019
The market share of the Housing 100 builders has increased to 35 per cent this year from 33 per cent in 2017/18. This is the highest market share since 2013/14 and is consistent with previous trends where volume home builders gained market share in a contracting market (25 September 2019).  More...

Shergold and Weir report prompts NCC changes to aluminium composite panel labelling
Builders and specifiers may need to check the labels on aluminium composite panels (ACPs) being supplied for building projects because of a proposed out-of-cycle amendment to the 2019 National Construction Code (NCC). The amendment would require all ACPs to be labelled in accordance with recently-finalised Australian Technical Specification SA TS 5344. (25 September 2019).  More...

Have your say on Design and Building Practitioners Bill
This draft Bill introduces a range of reforms to improve areas of the building sector. It seeks to improve the quality and compliance of design documentation and to strengthen accountability across the design, building and construction sector (03 October 2019).  More...

Building reforms drive renewed confidence
Minister for Better Regulation Kevin Anderson said the fundamental objective of these reforms is to improve the transparency, accountability and quality of work within the sector by ensuring homes are designed and built in accordance with the Building Code of Australia (02 October 2019).  More...

Building reform surges ahead with new certifiers regulation
The NSW Government is continuing to deliver on its commitment to reforming the building and construction industry, with the release of the draft Building and Development Certifiers Regulation 2019. The regulation is aimed at simplifying and strengthening the certification system in New South Wales and will allow the Government to more effectively register and regulate the conduct of certifiers (30 September 2019).  More...

Sweeping building sector reforms… under the carpet
On Friday 27 September, Engineers Australia—along with a wide range of industry stakeholders—saw the detail of the NSW Government’s proposed reform for the state’s building sector. The NSW Government’s proposed plan only applies registration to an engineer who performs a ‘compliance declaration’ for a Class 2 apartment buildings (30 September 2019).  More...

'Lost forever': Developer fined for damage to heritage-listed building
The company pleaded guilty to ripping up the 131-year-old Sydney building's 'rare and outstanding' decorative plaster features and original ceilings (26 September 2019).  More... 

A deliberate strategy': Mascot Towers residents accused of 'forcing' Government to pay for repairs
The Government says the rejection by residents of a $10 million special levy loan was a "deliberate strategy" to force the state to pay for work to fix the beleaguered complex (25 September 2019).  More...

Unlicensed builder convicted and fined $70,000 following NSW Fair Trading prosecution
On 12 September 2019, the Parramatta Local Court convicted Mr Anthony Lee Francis and fined him a total of $70,000 for seven offences against the Home Building Act and two against the Australian Consumer Law. The result comes after NSW Fair Trading commenced prosecution against Mr Francis late last year (23 September 2019).  More...

In practice and courts

BDAV Alert: Building and Construction Industry Warned: Beware of Non-Conforming Soffit Insulation
Building practitioners and contractors are reminded to be on the alert for non-conforming soffit insulation as some importers and merchants try to liquidate obsolete stock (03 October 2019).  More...

ABCB: NCC 2019 will be amended out-of-cycle
The ABCB is undertaking an out-of-cycle amendment for the 2019 edition of the National Construction Code. It will be known as NCC 2019 Amendment 1. The amendment is intended to introduce enhanced fire safety measures for early childhood centres in high-rise buildings and address recommendations identified in the Shergold Weir Building Confidence Report. Consultation closes on 10 October 2019 (23 September 2019).  More...

AIBS Member Statement – Professional Indemnity Insurance update 27 September 2019
Professional Indemnity Insurance Update – This statement is to update members and provide information on the work being undertaken by AIBS relating to the current Professional Indemnity Insurance crisis faced by the building surveying profession.  More...

Cladding guideline
In early 2018, the Building Ministers Forum asked Standards Australia to develop the system. Standards Australia has developed a permanent labelling system of aluminium composite panel products to support the identification of these products throughout their life-cycle.   More...

NSW Fair Trading
The Building Professionals Board's website has permanently closed as of 2 October and visitors will be redirected to the NSW Fair Trading website. You’re encouraged to visit the certifier section of the NSW Fair Trading website and update any weblinks and bookmarks. The website closure is part of the Board’s integration into NSW Fair Trading.

Draft Regulations for Building Certifiers
The NSW Government is seeking feedback on a draft regulation for building and development certifiers. The proposed Building and Development Certifiers Regulation 2019 is open for comment until 28 October 2019. A new Building and Development Certifiers Regulation 2019 must be introduced in order to bring the Building and Development Certifiers Act 2018 into force.  More...

Draft Legislation for Design and Building Practitioners
The NSW Government is seeking feedback on new draft legislation governing the design, building and construction sectors. The Design and Building Practitioners Bill 2019 has been released as part of the government’s response to recommendations in the Building Confidence Report (by Professor Peter Shergold and Bronwyn Weir). A regulation will be developed in 2020 to support the bill. Submissions close 16 October 2019.  More...
Note: The reforms in the act and the supporting regulation will apply to certain categories of designs and to multi-unit and multi-storey residential apartment buildings (as set out in the regulation).

NSW Fair Trading: Security of Payment laws start soon
The Building and Construction Industry Security of Payment Amendment Act 2018 (the Amendment Act) and the Building and Construction Industry Security of Payment Amendment Regulation 2019 (the amending Regulation) will commence on 21 October 2019.  More...

NSW Fair Trading: Part 6 of the EP&A Act postponed until 1 December 2019
The Part 6 provisions of the Environmental Planning and Assessment Act have been postponed and will now start on 1 December 2019. This delay will allow time for the sector to adjust to the regulatory changes that have been progressing around fire safety and the Building and Development Certifiers Act 2018.  More...

Planning Circular – Commencement of Part 6 (building and subdivision certification provisions)
FAQ – Occupation certificate
FAQ – New mandatory compliance powers for private principal certifiers
FAQ – New subdivision works certificate
Environmental Planning and Assessment Act 1979
Environmental Planning and Assessment Regulation 2000
If you have any queries, please contact the Department of Planning, Industry and Environment via legislativeupdates@planning.nsw.gov.au.  More...

Cases

RSK Construction Pty Ltd v Caruana [2019] NSWCATAP 246
APPEAL – procedural fairness, damages or rectification, leave to appeal, no issue of principle

Commandeur v Building Professionals Board [2019] NSWCATOD 152
ADMINISTRATIVE REVIEW – accredited certifier – findings of unsatisfactory professional conduct – disciplinary orders

Ashton v Stevenson; Stevenson v Ashton (No 2) [2019] NSWCATAP 238
In AP 18/31090 – (1) The respondent pay the appellant’s legal costs on the ordinary basis, as agreed or assessed. In AP 18/32837: (1) The appellant pay the respondent’s legal costs on the ordinary basis, as agreed or assessed.
COSTS – Usual order for costs – Indemnity costs
Civil and Administrative Rules 2014; Civil and Administrative Tribunal Act 2013
On 28 June 2018 the Tribunal determined a Home Building Application HB 16/50587, after a hearing over three days (the first instance decision), concerning defects in the construction of alterations and additions to an existing terrace house in Darlinghurst (the Property).

Vella v Mir (No 2) [2019] NSWCATAP 240
Brownlow Hill Building Services Pty Ltd t/as Cathayne Constructions is to pay Sidney and Marie Mir the sum of $4,372.50 within 14 days of the date of these orders.
APPEAL – Home Building – Definition of major defect – s 18F defence – Method of rectification of defect
Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014
Home Building Act 1989; Home Building Regulation 2013

Elias v McGauley [2019] NSWCATAP 237
APPEALS – Civil procedure – Extension of time for appeal – Service of documents on corporation – procedural fairness – APPEALS – Building and Construction – Rectification of defective building work – Damages – Sale of property without rectification – Effect on assessment of damages

Legislation

Consultation or Exposure Bills – 01 October 2019
Design and Building Practitioners Bill 2019

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.

Christine Jones

Published by Christine Jones, Divya Chaddha

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