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New legislation overhauling the building certification industry – changes you need to be aware of

11 March 2020

#Planning, Environment & Sustainability, #Construction & Infrastructure

Peter Holt

Published by Peter Holt, Georgia Appleby

New legislation overhauling the building certification industry – changes you need to be aware of

When the Opal Tower disaster first grabbed headlines back in December 2018, the building certification industry was thrust (unwillingly) into the spotlight.

A few months on from that and the Mascot Towers incident further amplified the many voices calling for a crackdown on building certification.

Since then, a raft of legislative changes have been introduced which attempt to overhaul the industry.

Firstly, on 1 December 2019 (after a considerable delay) the new building and subdivision provisions of the Environmental Planning and Assessment Act 1979 (EP&A Act) came into effect.

Among other things, these reforms introduced new powers and responsibilities for principal certifying authorities – now known as “principal certifiers”. This included, for example, a requirement that a private principal certifier issue a written directions notice to a responsible person within two business days of becoming aware of any non-compliance with a development consent or complying development certificate. Additional changes were also introduced removing interim occupation certificates and creating a new certificate for subdivision works, thereby separating out subdivision works from construction certificates.

Overall, these changes to the EP&A Act introduced a new scheme which undoubtedly required the thousands of people operating in the building certification industry to reassess their role, responsibilities and liabilities.

Also from 1 July 2020 the new Building and Development Certifiers Act 2018 (Certifiers Act) and the corresponding Building and Development Certifiers Regulation 2020 (Certifiers Regulation) will both take effect.

These statutory reforms, which replace the former Building Professionals Act 2005 and Building Professionals Regulation 2007, introduce even further changes to the building certification industry.

With the commencement of the new Certifiers Act, the Building Professionals Board will be abolished and the shift to move the regulation of building certifiers under the wing of the Fair Trading (a move that has been underway for some time) will be complete.

Certifiers will no longer be accredited, but rather as registered certifiers they will be subject to new conflict of interest provisions which effectively prohibit a certifier from providing professional services with respect to design and compliance with the Building Code of Australia, as well as acting as the principal certifier for the same development. This means that the work available to a certifier in a project is effectively halved which could have significant commercial ramifications for the industry.

The new legislative framework for regulating the conduct of certifiers also establishes a code of conduct which must be conceded is framed in extremely broad terms. For example, the code of conduct includes a requirement to act “in the public interest”, to not bring the “profession of certifiers into disrepute”, and to remain “informed of developments in building design and practice”. A failure to comply with these requirements could leave a certifier open to maximum penalty of $11,000 per offence.

Some of these changes will certainly introduce some more rigour and prescription into an industry which plays a very important role in the building and construction space. However, it is unclear whether the full impact of these changes on the certification industry has been properly considered.

Private certifiers (those not employed by councils) carry out the lion’s share of certification work. Those certifiers have less than four months to prepare for the commencement of the Certifiers Act and Certifiers Regulation as well as adapt to the recent changes to the EP&A Act. Four months seems like an unreasonably short period of time, especially considering the scope of the changes introduced and the financial impacts which may result.

It is very possible that certifiers will seek to increase their price so as to balance their increased risk of liability and the fact that they can now only perform one part of the role that they were once able to perform. This change will inevitably impact project owners, particularly those with large scale developments who will not have factored this into their project costings.   

We also anticipate that these reforms may result in delays in the delivery of services by certifiers as they come to terms with their new role.

Despite misgivings about the introduction of private certification in 1998, the private certifiers are here to stay.

Those in the industry would certainly feel that they have been somewhat unfairly and unnecessarily targeted as part of the fallout from Opal Tower and Mascot Towers and the wider debates about flammable cladding and building defects. 

Given the difficulties certifiers are having obtaining professional indemnity insurance, the pace of legislative change governing the industry and the fact that the Government’s wider push to impose obligations on all building professionals (not only the certifiers) and establish a wider duty of care have stalled in the Legislative Assembly – for now they may just be right.

For a full discussion of the new Certifiers Act and Certifiers Regulation, see our article here.

Authors: Peter Holt & Georgia Appleby

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.

Peter Holt

Published by Peter Holt, Georgia Appleby

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Peter Holt

Peter Holt

Special Counsel

Sydney

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