Two new laws have been passed to restore public confidence in the NSW building industry and to stop 'dodgy' builders and developers.

The laws are part of the reforms promised by the NSW government in order to improve the quality of construction and provide better protections for consumers against non-compliance within the building sector. 

The recently appointed NSW Building Commissioner David Chandler OAM will lead the implementation of the new laws, and will focus on the investigation and audit strategies.

Design and Building Practitioners Act 2020

NSW Government Fair Trading states on its website that this Act:

• Will improve the quality and compliance of construction work in NSW;
• Requires the registration of practitioners involved in design and building work, together with new obligations on these practitioners to declare the compliance of their work with the Building Code of Australia;
• Introduces important protections for property owners by clarifying that a legal duty of care is owed to them by people who carry out construction work; and
• Provides for the registration of professional engineers and specialist practitioners.

The key reforms in the Design and Building Practitioners Act 2020, as passed by Parliament, are:

• Introducing the concept of regulated designs which are designs prepared for a building element for building work, and designs prepared for a performance solution for building work, and other classes of designs that are set out in the regulations;
• Defining building element to include the fire safety systems of a building; waterproofing; an internal or external load bearing component of a building that is essential to the stability of the building, or part of it; a component of a building that is part of the building enclosure; and those aspects of the mechanical, plumbing and electrical services for a building that are required to achieve compliance with the Building Code of Australia;
• Requiring that design practitioners who prepare regulated designs issue a compliance declaration to declare that the design complies with the Building Code of Australia;
• Requiring that building practitioners obtain, rely upon and build in accordance with declared designs, and issue a compliance declaration to declare that building work complies with the Building Code of Australia;
• Requiring that any variations to declared designs are reprepared and declared by a design practitioner if they relate to a building element or performance solution, or in any other case, are documented by the building practitioner;
• Introducing the optional role of principal design practitioner to ensure design compliance declarations have been provided by design practitioners who are duly registered and authorised;
• Establishing a new registration scheme for design practitioners, principal design practitioners and building practitioners who are required to make a compliance declaration;
• Establishing a new registration scheme for professional engineers and specialist practitioners;
• Providing the Secretary and authorised officers with investigative, compliance and enforcement powers to monitor and assess compliance with the requirements of the Act; and
• Establishing a duty of care owed by persons who carry out construction work, which extends to existing buildings in certain circumstances.

When do these changes start?

The duty of care provisions in the Act started on 10 June 2020.

The majority of the remaining reforms in the Act will start on 1 July 2021, as regulations need to be developed to support their operation. Fair Trading state that these regulations will be developed throughout 2020 and will be subject to public consultation.

Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020

NSW Government Fair Trading states on its website that this Act:

• Will improve the quality and compliance of construction work in NSW; and
• Provides a suite of comprehensive investigation, rectification and enforcement powers to the Secretary of the Department of Customer Service and other delegated persons, including the Building Commissioner, for certain types of residential apartment building work and completed buildings, and establishes a mandatory developer notification scheme for building work which is at least six months from completion.

These obligations apply to Class 2 buildings, and buildings including a Class 2 component. These are typically multi-storey, multi-unit apartment buildings.

The key reforms in the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020, include:

• Establishing a new defect category of serious defect for the purposes of the Act
• Requiring one or more developers to notify the Secretary at least 6 months, but not more than 12 months, before applying for an occupation certificate for any part of a residential apartment building
• Allowing the Secretary to make a prohibition order preventing the issue of an occupation certificate or registration of a strata plan for any part of a residential apartment building if the developer has not notified the Secretary of the expected completion date within the required time, or has failed to notify the Secretary of a change in the expected completion date and in other prescribed circumstances
• Prohibiting a principal certifier from issuing an occupation certificate in contravention of a prohibition order, and providing that an occupation certificate issued in contravention of a prohibition order is invalid
• Providing the Secretary, the Building Commissioner and other authorised officers with a range of investigative, compliance and enforcement powers, including the ability to undertake inspections of notified building work, to monitor and assess compliance with the requirements of the Act while the building is under construction and at any time within ten years of the occupation certificate date
• Providing the Secretary with complementary powers to monitor compliance under the Act, including the power to accept undertakings, apply for orders to restrain or remedy contraventions, investigate developers and residential apartment buildings and issue a stop work order in prescribed circumstances
• Allowing the Department to issue a stop work order if the Secretary is of the opinion that the building work is to be carried out in a manner that could result in significant harm or loss to the public, occupiers or potential occupiers of the building;
• Establishing a rectification scheme to empower the Secretary to issue a building work rectification order when serious defects are identified through inspections, and to recover the costs and expenses incurred by the Secretary in connection with a rectification order.

When do these changes start?

From 1 September 2020

If you have any questions relating to the information in this piece, or you would like to speak with a member of Holman Webb's Property Group with respect to a matter of your own, please don't hesitate to get in touch today.