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

Residential Focus

09 September 2020

#Property & Real Estate

Published by:

Rebecca Weakley

Residential Focus

RAB Act – new audit process in action and September 14 deadline

The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act), which we previously discussed here, is now in force, having commenced on 1 September 2020.

The purpose of the RAB Act is to address the issues of non-compliance and serious defects in residential apartment buildings in NSW in an effort to boost public confidence in the NSW building and construction industry.

Additional information has now been provided to industry stakeholders on how the foreshadowed occupation certificate (OC) audit process will work in practice.

We also remind developers of buildings which are within six months of completion that they have up until 14 September 2020 to lodge their expected completion notice, otherwise, they will have to wait until at least 1 April 2021 to apply for their OC.

What’s the purpose of the OC audit process?

The OC audit process has been introduced to:

  • raise the construction standard of Class 2 buildings
  • give purchasers more confidence in their purchases of off-the-plan apartments
  • provide more scrutiny to projects where indicators suggest that work hasn’t been performed in accordance with approved designs, the Building Code of Australia, or using products that meet Australian Standards
  • reinforce accountability and responsibility amongst developers, builders and certifiers
  • reduce the prevalence of non-compliant work.

Applying for an OC

To apply for an OC, the developer must:

  • upload the Issue for Construction drawings or designs to the NSW Planning Portal
  • notify the Secretary of the Department of Customer Service (Secretary) through the NSW Planning Portal or the Fair Trading website (in the case of planning approvals not on the NSW Planning Portal) of the expected date of intent to lodge the OC, the date of which must be between 6 and 12 months away (expected completion notice)
  • upload the interim ‘As Built’ drawings or designs to the NSW Planning Portal
  • upload the building bond and associated documents to the Strata Portal, in accordance with the Strata Building Bond and Inspection Scheme.

How are sites selected for an audit by the Building Commissioner?

Sites will be selected for audit using risk rating tools, whereby all expected completion notices are passed through rating tools and a proportion of the projects that seek to apply for an OC within the following six months are selected.

The key rating tools used for the audit process are the Multi-Party Risk Rating Tool and the Single View of Building.

Sites may also be selected for audit at random. Further sites will be selected using indicators such as reported issues and referrals.

Initially, in September and October 2020, audits will be selected through a manual selection process.  From November 2020 to February 2021, the manual selection process will be accompanied by an automated selection process, with the aim being to move to a fully automated selection process from March 2021 onwards.

Being selected for an audit

The developer of the site will receive a letter to their registered address, notifying the developer that the site has been selected for an OC audit and a list of documents that need to be submitted to the Building Commissioner.

The letter will also contain instructions on how to upload the required documents to the NSW Planning Portal, as well as an invitation to a briefing session on the OC audit process.

The letter will also be sent to the builder and certifier, who will also receive invitations to the briefing session.

The OC audit process

The OC audit process begins after the developer uploads the required documents to the nominated portals.

The audit team begins by conducting a desktop review of the documents received, prior to visiting the site. The audit team may require further documents from the developer. The audit team will then spend one to three days onsite for an initial audit, with follow up audits intended to occur over the audit period (dependent on the audit findings).

The focus of the audit team will be on key building areas, including building structure and foundations, waterproofing, fire safety systems, external enclosures and acoustics.

The audit team will issue an initial report, with further reports issued for any subsequent site visits that occur. The developer will receive the report, which will include any recommendations, identified issues and non-compliances, with issues receiving a rating using a red, amber or green rating system.

Conclusion of the audit

The audit process can conclude by one of three ways, namely after:

  • the issue of a favourable final report, which occurs when no rectification work is required. Here, the OC application process continues with the lodgement of the strata bond and as-built drawings
  • satisfactory rectification of any non-compliances or defects; or
  • compliance with a Stop Work Order, Prohibition Order, or Building Work Rectification Order.

Urgent steps to be taken

In order to comply with the RAB Act, developers must notify the Secretary within 12 months, but not later than six months, of seeking an OC.

If on 1 September 2020, your building was within six months of completion, you must notify the Secretary within two weeks of 1 September of an intent to seek an OC.

Developers are strongly urged to consider whether they have current projects within six months of completion, for which notification of intent to seek an OC must be made by 14 September 2020. If they do not meet the deadline, they cannot apply for an OC until 1 April 2020.

Authors: Christine Jones, Peter Holt & Rebecca Weakley

In the media

House, Land Sales Spark REIT ‘Mini-Boom’
The residential market is going through a short “mini-boom” with house and land package sales expected to grow between 7 and 10 per cent on last year, according to UBS (04 September 2020).  More...

MBA: Builders Call For National Cabinet Consensus To Arrest Economic Decline
Building a National Cabinet consensus to deal cohesively and practically with the tension between the health and economic impact of the virus is the overwhelming imperative to be drawn from the 7% fall in June quarter GDP (02 September 2020).  More...

Top developer calls for post-COVID building code for wellness
One of Australia’s top developers is calling on the residential development industry and government to rethink building design standards so that they better foster physical and mental well-being in the post-COVID-19 world (02 September 2020).  More...

Pandemic proofing city buildings: using natural ventilation to reduce the spread of airborne viruses
In Australia, our practice has been a leader in designing contemporary towers comprising natural or mixed-mode ventilation systems – a feature that not only improves air flow and quality but significantly reduces a building’s carbon footprint (01 September 2020) .  More...

Building Approvals Increase 12 per cent in July
The HomeBuilder program has been very positive for the detached house sector but the impact of this program is yet to be seen in ABS approval data. The lift in detached house approvals in July is more likely to reflect building application lodgement and processing returning to normal after the shutdown,” stated HIA Chief Economist (01 September 2020).  More...

First Home Loan Deposit Scheme Should Grow: HIA
The report from the National Housing Finance and Investment Corporation (NFHIC)outlines the initial success of the first release of 10,000 guarantees under the First Home Loan Deposit Scheme (31 August 2020).  More...

MBA: Latest data on business impacts of COVID-19
The latest data confirms that the effects of the COVID crisis are making it increasingly tougher to run a building and construction business (28 August 2020).  More...

Release of AIHW Report: "Mesothelioma in Australia 2019"
At least 724 people died during 2019 from the aggressive and incurable cancer mesothelioma, which is chiefly caused by asbestos exposure, according to a report released by the AIHW. The report, Mesothelioma in Australia 2019, also identifies home renovations as the most significant ongoing risk factor for non-occupational asbestos exposure (27 August 2020).  More...

NSW will stop dodgy apartments from opening
Set to commence on Tuesday, the Residential Apartments Buildings (Compliance and Enforcement Powers) Act 2020 will give the NSW Building Commissioner new powers to act to stop dodgy construction (02 September 2020).  More...

Published – articles, papers, reports

Australian Bureau of Statistics
01/09/2020 Building Approvals, Australia, Jul 2020 (cat no. 8731.0)

Practice and courts

New Australian Standards
Personal equipment for work at height - Manufacturing requirements for full body combination and lower body harnesses. Standards Australia.  More...

Personal equipment for work at height - Manufacturing requirements for lanyard assemblies and pole straps. Standards Australia.  More... 

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 August 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.  More...

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...

Laws applying to multi-storey residential buildings
The Residential Apartment Buildings (Compliance and Enforcement Powers) Act (the Act) starts on 1 September 2020, giving the NSW Building Commissioner unprecedented powers to regulate and raise the standard of new residential buildings in NSW. These powers are part of the Office of the NSW Building Commissioner’s Construct NSW strategy

Starting 1 September 2020
Developers are required to notify (within certain timeframes) of the date construction is due for completion
a new inspection compliance program, Occupation Certificate Audits, gets underway
a new TAFE course to understand the Occupation Certificate Audit process is available for free for the first 60 days and a new process applies for the lodgement of strata bonds.

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. 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.  More...

Onsite inspectors have more power
A number of buildings will be selected for an Occupation Certificate Audit by NSW Government inspectors. The audit involves a review of designs and documents (including contracts) and a physical inspection of the building construction. If inspectors find a serious defect, they can enforce action to stop work, order defects to be rectified, and delay the occupation certificate being issued. Without an occupation certificate, the building can’t be occupied, and the sale of apartments can’t be settled, protecting buyers and residents from poor construction.

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

Penrith City Council v Settlers Estate Pty Ltd (No 2) [2020] NSWLEC 128
SEPARATE QUESTION: civil enforcement – whether the construction of a drainage line, culvert and channel were carried out contrary to approval by reason of their location – issues narrowed upon tender of further revised works as executed plan – construction contrary to stage 3 consent and stage 3 roads and drainage construction certificate – construction contrary to controlled activity approvals – separate questions answered in favour of the council – respondents to pay applicant’s costs.

X-Build Construction Services Pty Ltd v O’Rourke [2020] NSWCATAP 181
APPEALS – constructive failure to exercise jurisdiction – absence of a necessary finding of fact – Appeal Panel in as good a position as the Tribunal to make that finding of fact – consequential variation of the Tribunal’s orders EVIDENCE — interpretation of photographs — whether photographs may be used as substantive evidence or merely demonstrative evidence – restraint on use of photographs

Owners of Strata Plan No 30791 v Southern Cross Constructions (ACT) Pty Ltd (in liquidation) [2020] NSWCA 199
BUILDING AND CONSTRUCTION — Negligence — Miscellaneous forms of negligent conduct — Right of support — Application of Conveyancing Act 1919 (NSW) s 177 and common law — Whether loss of support caused damage to adjoining property.
TORTS — Negligence — Essentials of action for negligence — Whether there was a failure to take reasonable care — Whether any failure caused damage — Assessment of expert evidence.
TORTS — Negligence — Proof of negligence — Res ipsa loquitur.

Michael Kuehn & Jennifer Kuehn v Masterton Homes (NSW) Pty Ltd t/as Masterton Homes (NSW) Pty Ltd - Costs [2020] NSWSC 1130
COSTS – Multi-party contest – No issue of principle.
PROCEDURE – Damages case transferred to the Court from the NSW Civil and Administrative Tribunal (NCAT) because the first defendant argued that the proceedings had been compromised and that question was beyond NCAT’s jurisdiction – After transfer, the plaintiffs joined their lawyers claiming damages – The Court determined that the proceedings had not been compromised and dismissed the claim against the lawyers – Proceedings remitted to NCAT.

Samios Plumbing Pty Ltd v John R Keith (NSW) Pty Ltd [2020] NSWSC 1128
PRIVILEGE – Claim for legal professional privilege or settlement negotiation privilege – Where joint report was commissioned and prepared by second cross-defendant and a third party for the purposes ascertaining factual position in relation to allegedly defective pipes
HELD – Document not privileged – Not prepared for the dominant purpose of the second cross-defendant being provided with professional legal services relating to a proceeding or an anticipated proceedings – Document disclosed to third party in the absence of common interest.

Cappello v Hammond & Simonds NSW Pty Ltd (No 2)[2020] NSWSC 1199
COSTS – Indemnity costs – Where proceedings should have been commenced in the New South Wales Civil and Administrative Tribunal – Where plaintiffs should have appreciated part of the claim was doomed to fail – Indemnity costs awarded to successful defendant

Legislation

NSW

Acts

Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 No 9
This Act commences on 1 September 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

Share this