The NSW Parliament has recently passed two Acts, introduced by the state’s Government, to address concerns and issues that have arisen over a long period of time with regards to deficiencies in the quality of building and construction work across the state. These Acts have been specifically tailored to protect purchasers from the repercussions of defective and inferior building methods and products.
The introduction of the Design and Building Practitioners Act 2020 (DBP Act) and the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act) follows the negative findings of the 2018 Shergold-Weir Report into the Building and Construction industry and the subsequent appointment of the first NSW Building Commissioner in August 2019.
The most significant change made by the DBP Act is the imposition of a statutory duty of care towards landowners and subsequent landowners on any person who carries out construction work. Builders must also be properly qualified and recognised by professional bodies, adequately insured and registered with the NSW Government, and issue compliance declarations that confirm their work complies with the Building Code of Australia (BCA).
The RAB Act is designed to increase the governance framework to minimise defective residential apartments and inadequate certification process by giving powers, delegated by the Building Commissioner, to issue stop work and building work rectification orders; prohibit the issuing of occupation certificates; and increase the regulatory and enforcement powers of government to investigate and prosecute building practitioners who have engaged in defective construction.
Practitioners involved in building design, building work, the manufacturing or supply of products used for building work and supervisory roles will be required to exercise reasonable care to avoid economic loss which would be caused by defects relating to, or arising from, construction work. If a practitioner breaches this duty of care, a property owner will be entitled to damages (regardless of whether there is a contractual arrangement to carry out that construction work).
The duty of care will apply retrospectively to existing buildings and contracts, if the economic loss has become apparent within the last 10 years or after the DBP Act commenced. The duty of care also extends to subsequent owners.
The regulatory framework means that a principal certifier can only issue an occupation certificate after it has determined and obtained all compliance declarations for the building work. The compliance declarations can be only issued by registered practitioners at various levels of the building cycle.
What all this means is gone are the days when shonky developers and builders can sell their properties and walk away pretty much scot-free on the basis of the past ‘buyer beware’ premise and various other legal loopholes working in their favour. Now you can buy off-the-plan property with far more confidence that the building you are buying into has been constructed under stringent quality controls and complies to the letter with the Building Code of Australia.