11 July 2024
16 min read
#Property, Planning & Development
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In this edition we review some new and proposed changes to building legislation in NSW, including:
While the changes are small, a number of them are particularly significant in terms of the deferral of requirements or the restriction of rights.
The BDSA Reg amends the Building and Development Certifiers Regulation 2020 and the Strata Schemes Management Regulation 2016.
Building and Development Certifiers Regulation 2020 (BDC Reg)
The BDC Reg allows exclusions to be made in professional indemnity polices so that indemnity may not be provided for cladding that does not comply with the requirements of the Building Code of Australia, Australian Standards or other Commonwealth laws, or that does not comply with the manufacturer’s conditions of use in the cladding.
This had been limited to policies providing indemnity for a period not exceeding 12 months and commencing on or before 30 June 2024.
The BDSA Reg has extended this for another year to apply to policies commencing on or before 30 June 2025. This is a further example of the deferral of the full impact of insurance reforms in the building space so that the market can catch up.
Strata Schemes Management Regulation 2016 (SSMR)
The Strata Schemes Management Act 2015 (SSMA) and the SSMR require the developer of a residential strata scheme to provide a ‘building bond’ for building work comprising the strata development equal to:
The BDSA Reg has now extended these dates from 1 July 2024 to 2 November 2024.
This four-month extension has been welcomed by developers in difficult market conditions and is consistent with the Government’s focus on increasing housing supply.
The BRLA Bill proposes amendments to, relevantly, the Building and Construction Industry Security of Payment Act 1999, the Home Building Act 1989 (HBA) and the SSMA.
Building and Construction Industry Security of Payment Act 1999 (SOPA)
SOPA establishes a right to progress payments for a person who, under a construction contract, has undertaken to carry out construction work or has supplied related goods and services.
The BLRA Bill proposes to restrict this right if the construction contract does not comply with section 4 (unlicensed contracting) of the HBA or involves construction work that is residential building work done in contravention of section 92 of the HBA (the requirement of a policy of insurance under the Home Building Compensation Fund).
This aims to ensure that the powerful rights under SOPA (and their consequences for residential principals) are limited to building work which is carried out lawfully.
HBA
The BLRA Bill proposes to amend the competencies in the construction, plumbing and services training package from install medical gas pipeline systems to install and test, and to remove references to a Certificate IV in gas fitting which is not a valid qualification in NSW.
SSMA
The BLRA Bill proposes to extend the scope of section 191 of the SSMA to include, in building work for which a building bond is required, parts of a building that are not within the strata scheme, but which the strata scheme is required to service, maintain or repair. This recognises the growth in and complexity of mixed-use buildings.
The proposal will amend section 191 of the SSMA to provide:
"(1) This part applies to the following building work –
(a) residential building work carried out on a building or part of a building that is part of the parcel of a strata scheme,
(b) building work carried out on a building or part of a building that is –
(i) part of the parcel of a strata scheme, and
(ii) used or proposed to be used for mixed use purposes that include residential purposes,
(c) building work that –
(i) is carried out on a building or part of a building that is not part of the parcel of a strata scheme, and
(ii) the owners corporation is liable to pay for under a strata management statement or a building management statement registered under the Conveyancing Act 1919, Part 23, Division 3B.
(1A) Building work specified in subsection (1)(c) is taken to be carried out on a building in a part of the parcel of a strata scheme for the purposes of this part."
Vale BIG Corp
The Home Building Amendment (Compensation Reform) Act 2017 had already, among other things, closed the Building Insurers’ Guarantee Corporation (BIG Corp) to any new or reactivated claims and prohibited the lodging of new claims or revival of former claims.
The BLRA Bill proposes amendments to a variety of legislation to omit reference to BIG Corp, its claims administration functions and the Building Insurers’ Guarantee Fund.
If you have any questions about the above legislation, please get in touch with our authors below.
Authors: Christine Jones & Ryan Smith
Why so many Australian homes are either too hot or too cold
Much of Australia is enduring the coldest start to winter in decades. But chances are the reason you are cold is not only due to a polar air mass sweeping the country, but because millions of Australian homes are not well insulated. The average Australian home built before 2003 averages just 1.8 stars on a scale from zero to 10 stars under the Nationwide House Energy Rating Scheme (3 July 2024). Read more here.
‘Build more houses’ sure sounds great as a solution to the housing crisis, but a few factors scream ‘buyer beware’
This week marked the beginning of the five-year period over which the Albanese government has claimed its Housing Accord will deliver "1.2 million new, well-located homes". To achieve this target, we will need to build 240,000 new homes each year – or 20,000 a month. This seems as good a time as any to evaluate the reliability of what politicians tell us about housing, and how they're going to make things better (3 July 2024). Read more here.
Inspectors to boost NSW construction industry compliance with first permanent regional team
In response to serious defects in several major building projects, the NSW Building Commission has announced it is establishing a permanent presence in the Illawarra. There are more than 4,000 active construction sites in the region. The government says it will see how the regional pilot works before rolling out permanent teams in other regional areas (28 June 2024). Read more here.
Building homes for New South Wales: First sites identified
The Minns Labor Government is delivering on its commitment to leverage surplus government land to build more homes, more quickly, with the first tranche of sites announced today. In the recent budget, the NSW Government announced it will deliver up to 30,000 well-located homes, close to infrastructure and transport, with amenities and work opportunities, with surplus land to be made available for housing over the next four years (1 July 2024). Read more here.
Historic, world-leading engineered stone ban now in force
The historic ban on engineered stone in NSW and other Australian jurisdictions is in force. This world-leading change prohibits the use, supply and manufacture of engineered stone, and fulfils a vital election commitment. Silicosis, caused by breathing in small particles of silica dust, has devastating effects on the lungs and has become more prevalent in the engineered stone industry (1 July 2024). Read more here.
Low and mid-rise reforms start to take effect
The first of the Minns Labor Government’s low and mid-rise housing reforms that increase the permissibility of housing types on low-rise residential land and deliver more homes across NSW, is in effect from 1 July 2024. This will allow development applications for dual occupancies and semi-detached dwellings to be submitted in more R2 residential zones, meaning this option will now be available in 124 local government areas across NSW (29 June 2024). Read more here.
Building Commission expands its quality operations to the Illawarra
Builders considering cutting corners on construction sites in the Illawarra and Shoalhaven should think again with Building Commission NSW establishing a permanent presence in the region from Monday. Following the establishment of the Commission in December 2023, it has moved quickly to broaden its focus to one of the state’s busiest building and construction hubs, south of Sydney (28 June 2024). Read more here.
NSW Government to sell land near Sydney CBD to private developers despite affordable housing crisis
A prime parcel of government-owned land in inner-city Sydney is to be sold off to private developers with no requirement for any social or affordable housing to be built. The site on Parramatta Road in Camperdown is just 20 minutes from the CBD and sits on a major transport corridor with a bus stop right outside. Opposition parties have accused the government of breaching a key election commitment (8 July 2024). Read more here.
Engineered stone ban now in effect
Today marks the commencement of the landmark ban on engineered stone aimed at protecting Australian workers from silicosis. The ban prohibits the manufacture, supply, processing and installation of engineered stone benchtops, panels and slabs across all Australian states and territories. However, the ban does not apply to the controlled processing of previously installed engineered stone benchtops, panels or slabs for the purposes of removal, repair or minor modification. It also does not apply to the controlled processing of installed or uninstalled engineered stone benchtops, panels or slabs for the purposes of disposal (1 July 2024). Read more here.
Have your say – Australian Constructors Association releases third paper for Foundations and Frontiers
The third paper, drawing attention to the financial health of the construction industry, has been released to inform discussions at Foundations and Frontiers in August 2024. Recent reports indicate that the industry is facing significant financial challenges, which is alarming given its crucial role in the economy. Australian Constructors Association CEO Jon Davies emphasised that this crisis affects all sectors and extends throughout the entire supply chain. Read the article here, the paper here and make a submission here.
NCC 2025 Draft – Engineers Australia submission
This paper restates Engineers Australia’s submission to the Australian Building Codes Board in response to their National Construction Code (NCC) 2025 Public Comment Draft made via the ABCB’s online form on 1 July 2024 (July 2024). Read more here.
Submission on the review into the Design Building Practitioners Act 2020
This submission addresses the Terms of Reference requiring the Public Accounts Committee to determine whether the policy objectives of the Act remain valid and whether the terms of the Act remain effective for securing those objectives (July 2024). Read more here.
The Owners Strata Plan 80867 v Da Silva [2024] NSWDC 263
BUILDING AND CONSTRUCTION – Home Building Act 1989 – contract to undertake residential building work– non est factum – purported oral variation to scope of works – waterproofing – failure to comply with Australian Standard and Building Code of Australia.
BUILDING AND CONSTRUTION – statutory duty of care under section 37 of Design and Building Practitioners Act 2020 – waterproofing – failure to comply with Australian Standard and Building Code of Australia.
Civil Liability Act, 2002; Design and Building Practitioners Act 2020; Home Building Act 1989; Home Building Regulation 2004; Uniform Civil Procedure Rules.
Kheder v Building Commission NSW [2024] NSWCATOD 88
PROFESSIONS AND TRADES – Refusal of general building contractor licence – administrative review of decision – scope of experience.
Administrative Decisions Review Act 1997 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW); Home Building Regulation 2014 (NSW).
Samchris Pty Ltd v Keogh [2024] NSWCATAP 125
APPEALS – appeal on question of law – scope of question of law – no material error of law – appeal dismissed.
APPEALS – leave to appeal – principles governing – leave to appeal refused.
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – building dispute – where the builder breached statutory warranties – work order made against the builder.
Civil and Administrative Tribunal Act 2013 (NSW), ss 80, 81, Sch 4, cl 12; Civil and Administrative Tribunal Rules 2014, r 25; Electronic Transactions Act 2000 (NSW); Environmental Planning and Assessment Act 1979 (NSW), s 4; Environmental Planning and Assessment Regulation 2000 (NSW), cl 98 (repealed); Home Building Act 1989 (NSW), ss 18B, 18E, 18F, Sch 2, cl 1.
The Owners - Strata Plan No 30691 v Pickard [2024] NSWCATAP 126
APPEAL – Strata Schemes Management Act 2015 – section 106(5) claim for damages – claim brought outside period of two years provided for by section 106(6) – whether time can be extended under section 41 of the Civil and Administrative Tribunal Act – statutory interpretation – whether the Appeal Panel should follow an earlier decision of an Appeal Panel – doctrines of stare decisis and comity.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014; Home Building Act 1989 (NSW); Interpretation Act 1987 (NSW); Strata Schemes Management Act 2015 (NSW).
Morgan v Pitch Perfect Constructions Pty Ltd [2024] NSWDC 235
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – jurisdiction.
Australian Consumer Law (NSW); Civil and Administrative Tribunal Act 2013; Civil Procedure Act 2005; Fair Trading Act 1987; Fair Trading Regulation 2019; Home Building Act 1989; Home Building Regulations 2004.
Sui v Jiang [2024] NSWCATAP 128
PROPERTY LAW – strata titles dispute – noise issue arising from installation of new flooring in a strata scheme unit – whether owner of the unit was in breach of relevant by-laws – expert evidence as to noise measurements and applicable noise rating – tribunal found breach of relevant by-law in existence when new flooring installed and breach of amended by-law after the new flooring had been installed.
APPEALS – whether appeal lodged out of time – whether time for lodging the appeal ran from the first decision making substantive orders – appeal lodged after lengthy delay from the first decision – the appeal lodged after the appellant obtained new expert evidence about the noise issue – merits of appeal considered on application to extend time – no substantial prospects of success on merits – application for extension of time refused.
Civil and Administrative Tribunal Act (NSW) (2013); Strata Schemes Management Act 2015 (NSW).
Owners SP 54026 v Kastri Aev Pty Ltd [2024] NSWCATAP 119
REAL PROPERTY – STRATA MANAGEMENT – strict duty of owners corporation to maintain and repair common property – lost rent claim arising from alleged breach of duty – limitation period in Strata Management Act 2015 (NSW) section 106(5) with (6) – nature of loss – extension of time under Civil and Administrative Tribunal Act 2013 (NSW) section 41.
Civil and Administrative Tribunal Act 2013 (NSW); Limitation Act 1969 (NSW); Strata Schemes Management Act 2015 (NSW).
AM Darlinghurst Investment Pty Ltd as trustee for AM Darlinghurst Investment Trust v Growthbuilt Pty Limited [2024] NSWSC 825
BUILDING AND CONSTRUCTION – adjudication – judicial review – Building and Construction Industry Security of Payment Act 1999 (NSW), section 19, section 21, section 22.
BUILDING AND CONSTRUCTION – adjudication – judicial review – whether jurisdictional error to fail to consider documents provided to the adjudicator – where those documents include report produced relying on material subject to ‘without prejudice’ communications.
BUILDING AND CONSTRUCTION – adjudication – judicial review – whether jurisdictional error for adjudicator to rely on grounds allegedly not advanced by either party.
Building and Construction Industry Security of Payment Act 1999 (NSW).
Marino v Building Commission NSW [2024] NSWCATOD 95
ADMINISTRATIVE LAW – administrative review – home building – application for licence – plumbing, gasfitting and related work – experience requirements – requirements of applicable Instrument – requirements of form – fit and proper person.
Administrative Decisions Review Act 1997; Home Building Act 1989; Interpretation Act 1987; Licensing and Registration Uniform Procedures Act 2002.
In the matter of Academy Construction & Development Pty Ltd (subject to Deed of Company Arrangement) [2024] NSWSC 808
CORPORATIONS – voluntary administration – deed of company arrangement – terminating deed of company arrangement under section 445D of the Corporations Act 2001 (Cth) – where deed disadvantageous to one creditor – where deed provided for third party releases – whether deed of company arrangement an abuse of process of part 5.3A of the Corporations Act 2001 (Cth).
Corporations Act 2001 (Cth), part 5.3A, sections 445D, 447A; Design and Building Practitioners Act 2020 (NSW), section 37; Evidence Act 1995 (NSW), section 136; Home Building Act 1989 (NSW), section 18B; Insolvency Practice Schedule (Corporations), sections 90-15, 75-42.
Fadel v Siotor [2024] NSWCATAP 123
APPEALS – internal appeal – jurisdiction – general jurisdiction – no jurisdiction to hear an internal appeal against a correction order made under section 50 of the Consumer Trader and Tenancy Tribunal Act 2009 (NSW) (repealed) – no jurisdiction to hear an internal appeal against a decision made in the Consumer Trader and Tenancy Tribunal in 2012 – consideration of transitional provisions in Clause 9 and 10 of Schedule 1 of the Civil and Administrative Tribunal Act 2013 (NSW).
PRACTICE and PROCEDURE – extension of time – refused where no jurisdiction to hear internal appeals.
Civil and Administrative Tribunal Act (NSW) section 29, section 32, section 41, section 63, section 80, section 81, Schedule 1 clause 6, 9 and 10; Consumer Trader and Tenancy Tribunal Act 2001 (NSW) (repealed); section 50, section 67 and section 68; Consumer, Trader and Tenancy Tribunal Regulation 2009 (NSW) (repealed); clause 22.
Bills introduced by Government
National Housing and Homelessness Plan Bill 2024 – introduced first reading 24 June 2024
National Housing and Homelessness Plan Bill 2024 (No. 2) – introduced first reading 25 June 2024
Bills assented to by Government
Residential (Land Lease) Communities Amendment Act 2024 No 46 – assented to 24 June 2024
Regulation and other miscellaneous instruments
State Environmental Planning Policy (Housing) Amendment (Dual Occupancies and Semi-detached Dwellings) 2024 (2024-274) – published LW 28 June 2024
Conveyancers Licensing (Approved Professional Indemnity Insurance Policy) Amendment Order 2024 (2024-246) – published LW 28 June 2024
Statutory Instruments
Administrative Arrangements (58th Parliament) Order 2023 (NSW) – start date 1 July 2024
Design and Building Practitioners Regulation 2021 (NSW) – start date 1 July 2024
Administrative Arrangements (Minns Ministry—Administration of Acts) Order 2023 (NSW) – start date 1 July 2024
Environmental Planning and Assessment Regulation 2021 (NSW) – start date 1 July 2024
Local Government (General) Regulation 2021 (NSW) – start date 1 July 2024
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.
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