25 October 2023
14 min read
#Property, Planning & Development
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On 12 October 2023, the NSW Government introduced the Building Legislation Amendment Bill 2023 (the Amendment Bill) to the NSW Parliament. It passed the NSW Legislative Council on 19 October 2023, read the Second Reading Speech here and is currently with the Legislative Assembly, awaiting concurrence.
The Amendment Bill is stage one of the reforms’ roll out. If passed by Parliament, the NSW Government intends to introduce the Building Bill 2022 (see the public consultation draft here) and the Building Compliance and Enforcement Bill 2022 (see the public consultation draft here) to Parliament in 2024. The three Bills were open to public consultation in 2022.
These Bills form the next stage of Construct NSW’s six-pillar transformation strategy, which aims to restore public confidence and create a customer-facing building and construction sector by 2025.
The Amendment Bill proposes to amend the following:
The Amendment Bill has shrunk since the public consultation draft, published 2 May 2022, which included an additional seven schedules. For a discussion of the public consultation drafts, access our webinar here.
Schedules deleted from the Amendment Bill include the amendments:
In relation to intentional phoenix activity, for example, the Amendment Bill no longer directly imposes a duty on registered practitioners to take reasonable steps to ensure those they are in business with have not been involved in intentional phoenixing activity in an industry relating to building and construction. Instead, the Amendment Bill increases regulators’ powers to target activities like intentional phoenixing through disqualifying persons from holding authorities under the proposed section 33A of the HB Act.
More importantly, the Amendment Bill will no longer amend the SOP Act. This was one of the key amendments proposed in the public consultation draft which involved:
Changes between the public consultation draft and the Amendment Bill have not been explained. Nor has the Government indicated if the removed amendments have been dropped altogether or will be included the proceeding Bills. The reforming building laws in NSW website still states that the public consultation is under review, with a final report still to come.
New duties for persons in the building product supply chain
Currently, not all persons in the supply chain for a building product are held to the same level of accountability.
The Amendment Bill proposes to impose a range of duties under the BPS Act on persons who form part of the building product supply chain, including designers, manufacturers and any person who imports or supplies building products.
The primary duty, in section 8E, imposes an obligation on persons to ensure that products used on buildings are conforming and complaint. Building products must meet the performance standards under the National Construction Code (NCC) or a prescribed standard. Further, they must be used in a way that conforms with how they have been manufactured to ensure they do not create a safety or build quality risk. If they fail to meet these requirements, they are deemed to be non-confirming building products (NCBP).
Persons in the building product supply chain will also have a positive duty provide certain information to the next person in the supply chain. This requires persons to making available certain information about building products as practicably as possible, including how the product meets the relevant Australian Standards for its intended use.
Powers of the Secretary
Under the amended BPS Act, the Secretary will have additional powers around:
The Secretary can also apply to the Supreme Court of NSW for an order to prohibit persons who engaged in supplying NCBPs from carrying on business.
Rectification orders
Proposed amendments to the RAB Act will enable rectification orders to be used proactively. This is to ensure that inspectors can identify issues early and therefore rectify defective work before the building is occupied.
The Amendment Bill does this by granting regulators the power to inspect, investigate and issue relevant orders while class 1 buildings are under construction. This includes the power to enter houses under construction and seek the production of information regarding building work.
Failure to comply with a rectification order will also attract large penalties of up to $330,000 for a corporation and $110,000 for an individual. For every day that the offence continues, corporations may incur penalties of up to $30,000 per day or $11,000 per day for individuals.
Strata Schemes
The amount of the strata building bond for class 2 construction will be allowed to increase from 2% and will be set by regulation, which will be 3% from 1 February 2024.
The holding of decennial liability insurance (which satisfies the Secretary) for class 2 building work will operate as an exemption to the strata inspection and building bond scheme. Further, regulation may provide for the holding of decennial liability insurance to exempt a person from complying with sections 92 and 96 of the HB Act.
The effect of these amendments will be to promote decennial liability insurance as the default option for defect risk management.
These are just some of the key elements in the Amendment Bill, which will impact the sector.
Professionals in the sector will need to be aware of their new, positive duties and the increased regulatory powers, in anticipation of the Amendment Bill passing. We would expect it to commence, at least in part, on 1 February 2024.
Implications for being unaware of these new duties may result in stringent penalties for both corporations and individuals. Tough penalties for failing to comply with rectification orders also apply.
For homeowners, these changes will likely prevent significant harm of loss caused by non-conforming building products or defects discovered after occupation.
We predict the Amendment Bill will pass both Houses. We therefore advise reading the Amendment Bill and its Second Reading Speech to understand the multitude of changes that will commence on its date of assent. This will likely be at the start of 2024.
Authors: Christine Jones & Caitlyn Trussell
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Is the sea of dark roofs raising the heat in Australia’s new suburbs?
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Refugee women learn construction skills at TAFE NSW to forge new careers and lives
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Sydney developer Jean Nassif drops appeal against 10-year building licence suspension
Embattled Sydney property developer Jean Nassif has withdrawn a legal challenge against a decision to suspend his building licence for a decade. In December, NSW Fair Trading suspended Mr Nassif's building licence for 10 years and permanently revoked his company Toplace's licence, after finding them guilty of improper conduct. The bans were imposed following an investigation by Fair Trading, which alleged it had found more than 40 defects in residential developments constructed by Toplace (16 October 2023). Read more here.
The National Housing Conference has wrapped. Here is a summary of the possible solutions
The three-day National Housing Conference in Brisbane ended with five possible solutions to find a way forward, including fast-tracking prefabricated home schemes and getting super funds to build ‘rent-to-buy’ high rises (13 October 2023). Read more here.
AAT Bulletin Issue No. 21/2023
The AAT Bulletin is a fortnightly publication containing information about recently published decisions and appeals against decisions in the AAT’s General, Freedom of Information, National Disability Insurance Scheme, Security, Small Business Taxation, Taxation & Commercial and Veterans’ Appeals Divisions (23 October 2023). Read more here.
Strata Legislation Amendment Bill 2023
The Strata Legislation Amendment Bill was passed in the Lower House on Thursday, 19 October 2023. This Bill seeks to amend the Strata Schemes Development Act 2015 and the Strata Schemes Management Act 2015. It will also make amendments to the Community Land Development Act 2021, the Community Land Management Act 2021 and regulations made under each once passed through both Houses (19 October 2023). View the Bill and Explanatory Note here.
Granny Flat Report October 2023 following national housing crisis summit
Following the national housing crisis summit, new analysis by Archistar, Blackfort and CoreLogic have found more than 650,000 residential properties in Australia’s three biggest cities with the potential to build granny flats. The Granny Flat Report 2023 concludes that there is untapped potential to boost housing supply (October 2023). Read media article here. Read the report here.
National Construction Code (NCC) – Thermal bridging in residential buildings resource
The NCC has published a Therman bridging in residential buildings resource which provides information about Performance Requirements and Deemed-To-Satisfy solutions regarding thermal bridging in Class 1 buildings (houses) and Class 2 buildings (apartment and common areas). It contains links to case studies showing the impact of thermal bridging in various types of commercial buildings using different materials (12 October 2023). Read more here.
Ikona Developments Pty Ltd v Tierney [2023] NSWCATAP 281
APPEALS – questions of law – procedural fairness.
APPEALS – measure of damages – fresh evidence.
Civil and Administrative Tribunal Act 2013 (NSW), s 36, 80, 81; Home Building Act 1989 (NSW), ss 18B, 48A.
Construction Development Management Services Pty Ltd v City of Sydney [2023] NSWLEC 1020
DEVELOPMENT APPLICATION – residential apartment development – residential flat building in SP5 Metropolitan zone – whether apartment design guide is mandatory – whether proposed development exhibits design excellence – Apartment Design Guide – whether public domain interface acceptable.
Architects Act 2003; Environmental Planning and Assessment Act 1979, ss 4.16, 8.7; Environmental Planning and Assessment Regulation 2021, ss 3, 29; Heritage Act 1977, s 140; State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004; State Environmental Planning Policy (Housing) 2021; State Environmental Planning Policy (Sustainable Buildings) 2022, ss 4.1, 4.2; State Environmental Planning Policy No. 65 – Design Quality of Residential Apartment Development, cll 28, 30, Sch 1; Sydney Local Environmental Plan 2012, cll 4.3, 4.4, 5.10, 5.21, 6.4, 6.16, 6.21, 6.21A, 6.21B, 6.21C, 6.21D, 6.21E, 7.13, 7.14, Sch 5.
In the matter of The Gosford Pty Ltd (Receivers and Managers Appointed) [2023] NSWSC 1232
CORPORATIONS – receivers and managers – company entered into contracts with numerous purchasers for sale off the plan of lots in a mixed residential and commercial development being undertaken by the company – purchasers paid deposits to stakeholder – secured creditor appointed receiver and manager to company’s assets, including the land – appointor later sold the partly-developed land as mortgagee in possession – company thereby became unable to complete contracts with purchasers – direction that receiver is justified in causing the company to direct the stakeholder to release the deposits to the purchasers.
Conveyancing Act 1919 (NSW), s 66ZT; Corporations Act 2001 (Cth), s 424; Property and Stock Agents Act 2002 (NSW), s 86.
Jiang v Sui [2023] NSWCATCD 127
LAND LAW – Strata Title – By-laws – noise – installation of floating floor – interference with the peaceful enjoyment of the owner or occupier of another lot – amendment of by-law after installation of floating floor – By-law as amended requiring compliance with particular standard – whether by-law as amended applies to pre-existing floor.
Strata Schemes Management Act 2015 (NSW).
Pearce v Commissioner for Fair Trading [2023] NSWCATOD 149
ADMINISTRATIVE REVIEW – disciplinary action – licencing – criminal offences – failure to disclose all past offence – assault on neighbour while performing building works – whether guilty of improper conduct - whether a fit and proper person.
Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013; Home Building Act 1989.
Stewart v Scott [2023] NSWCATAP 279
ADMINISTRATIVE LAW – particular administrative bodies – NSW Civil and Administrative Tribunal – renewal of proceedings in the Consumer and Commercial Division – Civil and Administrative Tribunal Act 2013 (NSW) Schedule 4 clause 8 – restriction on renewal application if the order not complied with “is or has been the subject of an internal appeal” – restriction does not apply where order not varied on internal appeal.
Civil and Administrative Tribunal Act 2013 (NSW) Sch 4 cl 8(5); Civil and Administrative Tribunal Amendment Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014, (NSW); Consumer Trader and Tenancy Tribunal Act 2001 (NSW); Fair Trading Act 1987 (NSW); Home Building Act 1989 (NSW); Strata Schemes Management Act 2015 (NSW).
Assented to
Environmental Planning and Assessment Amendment (Housing and Productivity Contributions) Act 2023 No 10 – commenced 1 October 2023
Regulations and miscellaneous instruments
Border Fence Maintenance Amendment Regulation 2023 (SI 563) – LW 13 October 2023
Conveyancing (General) Amendment (Miscellaneous) Regulation 2023 (2023-564) – LW 13 October 2023
Environmental Planning and Assessment Legislation Amendment (Housing and Productivity Contributions) Regulation 2023 (2023-547) – LW 29 September 2023
Protection of the Environment Operations Legislation Amendment (Miscellaneous) Regulation 2023 (2023-51) – LW 17 February 2023
Bills introduced by Government
Building Legislation Amendment Bill 2023 – introduced LC 12 October 2023
Strata Legislation Amendment Bill 2023 – introduced LC 12 October 2023
Climate Change (Net Zero Future) Bill 2023 – introduced LC 12 October 2023
Strata Legislation Amendment Bill 2023 – introduced LC 12 October 2023
Passed by both Houses
Work Health and Safety Amendment Bill 2023 – passed 12 October 2023
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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