Posts

Fitz Jersey under fire: Building Commissioner issues Prohibition Order under new powers

Whilst the Residential Apartment Building (Compliance and Enforcement Powers) Act 2020 (NSW) (RAB Act) was only enacted 6 months ago, the Building Commissioner has shown his commitment to exercising the new powers conferred on his Department to regulate non-compliant developers and protect the interests of buyers in new residential developments.

The RAB Act commenced on 1 September 2020 and introduced a range of measures to regulate the carrying out of residential building work by developers, including:

  1. a new occupation certificate notification scheme; and
  2. the conferral of broad investigatory and enforcement power on the Building Commissioner.

(For more information on the RAB Act generally, please see our article from last year.)

As part of the Building Commissioner’s enforcement powers, on 21 December 2020, a Prohibition Order was issued to property developer, Fitz Jersey Pty Ltd (Fitz Jersey), preventing the issue of an occupation certificate and the registration of a strata plan in relation to its development at 563 Gardeners Road, Mascot NSW 2020.

Pursuant to section 9(1)(c) of the RAB Act, the Building Commissioner can make an order prohibiting the issue of an occupation certificate and/or the registration of a strata plan for a strata scheme in relation to a residential apartment building, if it is satisfied that a serious defect exists in the building. On two separate occasions last year, compliance officers from the Department of Customer Services conducted inspections of the building at Gardeners Road. During these inspections it was observed that building work carried out in relation to the fire safety systems was non-compliant with the performance requirements in the Building Code of Australia, which could result in serious defects.

The issue of a Prohibition Order has serious implications on a developer. Not only does it reflect poorly on their reputation in the industry (a register of Prohibition Orders issued is published publicly on the Fair Trading website), but it also has serious financial consequences as a developer cannot settle on contracts for sale and purchasers cannot lawfully occupy a building without an occupation certificate.

In November 2020, the Building Commissioner issued a Building Work Rectification Order pursuant to section 33 of the RAB Act also in relation to the building’s inadequate and non-compliant fire safety systems.

Residential developers should take heed of this as an example of the Building Commissioner’s willingness to exercise the new powers conferred by the RAB Act.

If you have questions about how the RAB Act may affect your project or would like further information on any of the above, please contact us at info@bradburylegal.com.au or (02) 9248 3450.

Regulatory Overhaul and Reform Pillars: building confidence and stronger foundations for the NSW building and construction industry

Transparency, accountability and quality of work are always issues at the forefront of the building and construction industry. In the wake of many high profile instances of defects in newly built developments, these are also the big issues that the NSW Government is tackling in 2020.

Where it began: the Shergold Weir Building Confidence Report

Back tracking to early 2018, the Shergold Weir Building Confidence Report recommended the implementation of a national best practice model. The purpose of this was to enhance public trust in the building and construction industry and strengthen the effective implementation of the National Construction Code. The best practice model comprises 24 recommendations relating to:

  • registration and training of practitioners;
  • roles and responsibilities of regulators;
  • the role of fire authorities;
  • integrity of private building surveyors;
  • collecting and sharing building information and intelligence;
  • adequacy of documentation and record keeping;
  • inspection regimes;
  • post-construction information management;
  • building product safety; and
  • how the above recommendations will be implemented.

The NSW Government’s Response: Building Stronger Foundations Discussion Paper

The NSW Government welcomed the Shergold Weir Report and announced that it is committed to improving the building and construction industry through a number of new reforms. In June 2019, the NSW Government presented its Building Stronger Foundations Discussion Paper seeking input from stakeholders on its four key reforms. These reforms are:

  1. requiring practitioners defined as ‘building designers’ (e.g. architects, engineers) to declare that their building plans/specifications/solutions are compliant with building regulations, including the Building Code of Australia;
  2. introducing a registration scheme for ‘building designers’ who will be making declarations;
  3. ensuring that building practitioners owe a duty of care to owners’ corporations and subsequent residential homeowners; and
  4. appointing a Building Commissioner who is a consolidated regulator for the whole of the NSW building and construction industry.

What to expect in 2020 and beyond

It has been just over a year since the NSW Government committed to implementing regulatory reform and six months since it consulted with stakeholders to shape the direction of these reforms. So what progress has been made in that time?

In October 2019, the first tranche of reforms was introduced with the Design and Building Practitioners Bill 2019 (the “Bill”). The Bill seeks to deliver the NSW Government’s first, second and third key reforms by imposing new obligations on design and building practitioners. The Bill is currently before the NSW Upper House. Make sure to read our next newsletter as we will be providing a detailed explanation of the substance of the Bill.

In relation to fourth key reform, the NSW Government has appointed David Chandler OAM as the NSW Building Commissioner. In January 2020, Mr Chandler announced the Six Reform Pillars, which is the public’s first insight into his plans and implementation strategies for the reforms. The Six Reform Pillars are:

Pillar Actions Outcomes
Building a better regulatory framework

 

Implementing legislation and regulation and transforming the focus of the regulator

 

Ensure that NSW has a strong customer focused regulatory framework
Building rating systems

 

Work with ratings agencies, insurers and financiers to assist in better selection of industry participants

 

Move away from one-size-fits-all participant recognition and better identify risky players

 

Building skills and capabilities

 

Improve accreditation of construction related programs through improved standard modules

 

Shared minimum learning content and open source resources for all institutions

 

Building better procurement methods

 

Establish clear standards for engagement and outputs

 

Viable risk allocation and performance accountability

 

Building a digital future

 

Digitise the NSW Building Industry and move away from analogue record keeping

 

Shared industry wide platforms that build confidence

 

Building the reputation for quality research

 

Evidence based approach to accessing and closing the gap via case studies and other research

 

Baseline and measurement against our ability to improve confidence in the industry

 

 

This article provides a snapshot of the NSW Government’s plans to implement effective and wide ranging regulatory reforms of building and construction industry. This summary demonstrates that there is a significant task ahead in implementing these reforms, so watch this space for future updates.

If you or someone you know wants more information or needs help or advice in relation to this article, please contact us on (02) 9248 3450 or email info@bradburylegal.com.au.