There’s great news for the New South Wales construction industry as the NSW parliament passes two new building reforms including the Design and Building Practitioners Bill 2019 on Wednesday 3 June 2020 and the introduction of the Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020 passed on Thursday 4 June 2020.
Not only do these laws mean NSW building regulators have new boosted powers to withhold occupation certificates for apartments and other buildings that are not compliant, they can also prevent developers from settlement – the point at which they turn a profit.
These major changes in NSW’s residential property development industry are a game changer and will ultimately raise the standard of property construction in NSW, placing the state way ahead of other Australian states and territories. This is because the industry regulator in most other states and territories only focus on licensing and disciplinary issues. Local authorities have control of the building sites, however with limited resources they are often unable to assist.
These changes also finally put the customer first, helping to restore customer confidence after high-profile apartment defects were revealed at Mascot Towers and Opal Tower which left consumer confidence at an all-time low.
What is the Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020?
The object of this Bill is to prevent property developers from carrying out building work that may result in serious defects to building work or result in significant harm or loss to the public or current or future occupiers of the building. In particular, the Bill makes provision for the following—
- To enable the Secretary of the Department of Customer Service (the Secretary) to
- Issue a stop work order if building work is being carried out, or likely to be carried out, in a manner that could result in a significant harm or loss to the public or current or future occupiers of the building, or
- Issue a building work rectification order to require developers to rectify defective building works, or
- Prohibit the issuing of an occupation certificate in relation to building works in certain circumstances,
- To impose an obligation on developers to notify the Secretary at least 6 months, but not more than 12 months, before an application for an occupation certificate is intended to be made in relation to building works,
- To provide investigative and enforcement powers for authorised officers to ensure compliance with the requirements of the proposed Act,
- To establish penalties for the contravention of the requirements of the proposed Act,
- To make provision for the recovery of costs associated with compliance with the requirements of the proposed Act by a developer where there is more than 1 developer for the building work, or by the Secretary where the developer fails to comply,
- To enact other minor and consequential provisions and provisions of a savings and transitional nature,
- To make consequential amendments to other legislation
What does this Bill mean for the property industry?
The passing of the Bill is a massive win for the construction sector which can start to rebuild itself into a transparent and accountable industry that puts the customer first, whilst rebuilding and restoring public confidence and trust. The Bill lays the foundations to prevent consumers from purchasing defective buildings or properties riddled with problems now and into the future and instead allows consumers to purchase and invest in high quality apartments and other buildings.
These changes are also warmly welcomed by the building sector NSW and quality developers, designers, contractors and suppliers who have been competing against dodgy developers and builders notorious for cutting corners for far too long.
Sydney strata managers and NSW strata management companies can also breathe a huge sigh of relief as these new building regulations will ensure quality property construction and less issues with building defects and meetings with owners corporations.
When does the Residential Apartments Building Bill take effect?
The Residential Apartment Buildings Bill will take effect from 1 September 2020, whilst the Design Practitioners Bill, still requires regulations to be drafted.
To help identify which developments to focus on first to ensure they are compliant, the NSW Building Commission will use a ratings tool. This tool, designed by data company Equifax rates the track record of developers, builders and certifiers on factors including building failures, finances, complaints and insurance claims.
These two pieces of legislation forms one part of the NSW Government’s comprehensive six-part reform agenda to raise standards and accountability in the building sector.
To find out more about the Residential Apartment Buildings Bill 2020, speak to your strata manager or contact The Strata Collective.