Update: A Busy Month for Construction Regulation in NSW

Anish Wilson

4 December 2023 

It has been a busy month or so that has seen a few changes in the regulatory landscape for construction in NSW.

This insight provides a summary.

Building Commission NSW

From 1 December 2023, the newly formed Building Commission NSW will regulate building and construction in NSW.

The Building Commission brings teams from NSW Fair Trading and the Office of the Building Commissioner together into one unit, aimed at providing an integrated and consistent approach to building and construction regulation in NSW.

Certifiers, design and building practitioners, developers, home building tradespeople, business and others will be under the eye of the Building Commission with respect to their compliance with the following laws (in some cases, together with other governmental bodies and ministers):

1. Architects Act 2003

2. Building and Development Certifiers Act 2018

3. Building and Construction Industry Security of Payment Act 1999

4. Building Products (Safety) Act 2017

5. Design and Building Practitioners Act 2020

6. Environmental Planning and Assessment Act 1979

7. Gas and Electricity (Consumer Safety) Act 2017

8. Home Building Act 1989

9. Plumbing and Drainage Act 2011

10. Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020

11. Strata Schemes Development Act 2015

For more information, see https://www.fairtrading.nsw.gov.au/news-and-updates/notices/new-regulator-for-building-and-construction-industry

Changes to building legislation

The Building Legislation Amendment Bill 2023 was passed by Parliament in November 2023.

“Anywhere, anytime” inspections and stronger powers regarding licenses

The changes allow for:

1. Site inspections of residential buildings, including freestanding houses and terraces. However, these inspections no longer need to be triggered by the lodgement of a building dispute.  Essentially, this is an “anywhere, anytime inspection power”; and
2. Stronger powers entitling the regulator to refuse an application, cancel a license or disqualify a person from holding a contractor licence if the relevant person has been involved in the management of a company that has become insolvent in the previous 10 years.

Decennial Liability Insurance and the Strata Building Bond Inspection Scheme

To provide security in relation to the rectification of defects for residential apartment buildings, developers are required to:

1. Take out a decennial liability insurance policy that covers the common property of apartment buildings against defects for a period of 10 years; or
2. Pay a building bond calculated on the construction contract price for the building, under the Strata Building Bond and Inspections Scheme (SBBIS).

The rate a developer is required to pay as a bond against defects will increase from 2% to 3%.

New suspension powers

Powers have been strengthened to allow for the immediate suspension of a certifier, design practitioner, principal design practitioners, building practitioner or professional engineer while disciplinary action is being finalised, if there is a particular risk of re-offending conduct.

Building products safety

Set to come into force during 2025, there will a chain of responsibilities and new duties for manufacturers, suppliers, importers, designers and tradespeople involved in the building product supply chain.

For further information in relation to the legislative changes, see https://www.fairtrading.nsw.gov.au/about-fair-trading/legislation-and-publications/changes-to-building-legislation-in-nsw

CONTACT US

For further information regarding the above changes, please do not hesitate to contact Anish Wilson, Associate Director on (02) 8239 6500.

Related articles from Anish:

1. Construction Law Reform – The Design and Building Practitioners Act 2020 (NSW) and the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW), at https://staging.kreisson.com.au/construction-law-reforms/
2. A Builder’s Guide to the Design and Building Practitioners Act and Regulation Part 1 – Introduction to the Legislation, ‘Building Work’, and Registration, at https://staging.kreisson.com.au/a-builders-guide-to-the-dbpa-part-1/
3. A Builder’s Guide to the Design and Building Practitioners Act and Regulation Part 2 – Regulated Designs and Compliance Declarations, at https://staging.kreisson.com.au/a-builders-guide-to-the-design-and-building-practitioners-act-and-regulation-part-2-regulated-designs-and-compliance-declarations-part2/
4. A Builder’s Guide to the Design and Building Practitioners Act and Regulation Part 3 – ‘Reasonable Excuse’ and Emergency Remedial Building Work, at https://staging.kreisson.com.au/a-builders-guide-to-the-design-and-building-practitioners-act-and-regulation-part-3-reasonable-excuse-and-emergency-remedial-building-work/

This communication is sent by Kreisson Legal Pty Limited (ACN 113 986 824). This communication has been prepared for the general information of clients and professional associates of Kreisson Legal. You should not rely on the contents. It is not legal advice and should not be regarded as a substitute for legal advice. The contents may contain copyright. 

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