Building Regulation Compliance Reforms 2021

The Design and Building Practitioners Regulation 2021 (NSW), which commenced on 1 July 2021, was released in April 2021. The Regulations were made under the Design and Building Practitioners Act 2020 (NSW) which is currently partly in force with the remaining provision to come into full effect on 1 July 2021. The legislation introduces new obligations for professionals who work on developing multi-unit residential buildings.

The legislation is part of the NSW Government’s response to the Shergold Weir Report. Its aim is to provide consumers with additional protection, strengthen compliance in the building sector, restore confidence in the residential construction industry and ensure apartments being built are trustworthy.

Once the Act is in full effect, there will be a new statutory duty owed by design and building practitioners and professional engineers to exercise reasonable care to avoid economic loss caused by defects.

Economic loss includes not only the cost of rectifying defects, including damage caused by defects but also the reasonable costs of providing alternative accommodation where necessary and is owed to each owner of the land, including owners corporations as well as to each subsequent owner of the land.

The duty is imposed on building practitioners retrospectively (for loss that became apparent within the 10 years immediately prior to 11 June 2020), meaning designers and builders on completed projects will now also be subject to this duty of care.

This new duty of care will exist in conjunction with the statutory warranties in the Home Building Act 1989, however, this legislation will make claims able to be brought after the statutory warranty limitation periods under the Home Building Act have expired.

The Act will also introduce regulated designs for fire, waterproofing, structural elements and services and designs prepared for a performance solution under the Building Code of Australia (BCA). Designers will need to provide a declaration that the design complies with the BCA and be adequately insured.

Key changes in the Design and Practitioners Act include:

• A new duty of care to owners by people carrying out “construction work” to exercise reasonable care to avoid economic loss caused by defects.
• A registration regime for Professional Engineers provides that Professional Engineers are to have the right qualifications and level of competency to ensure the work carried out under a particular class of registration, is within the practitioner’s competence.
• A registration regime for Building Practitioners
• A registration regime for Design Practitioners which will require design practitioners such as architects, electrical engineers, fire safety, drainage, geotechnical, structural engineers and so forth, to be registered and declare that designs and building work is compliant with the Building Code of Australia and other relevant standards before building work can start, and declared designs will need to be lodged on the NSW Planning Portal. Builders must then declare the building work will be constructed in accordance with complaint designs and the BCA prior to an occupation certificate being issued.
• Any person who gives a compliance declaration must be adequately insured.

The Act also gives the Secretary of the Department of Customer Service grounds to take disciplinary action against a registered practitioner, including imposing fines or suspending registration. It also introduces new powers of investigation for authorised officers and enforcement powers which include the ability to issue stop-work orders where works are in breach of the Act.