NSW Law Effective on September 1st Set to Change the Game in Protecting Apartment Owners

September 1, 2020 Updated: September 1, 2020

Apartment owners in New South Wales (NSW) will have unprecedented protections against defective buildings from Sept. 1, with the state’s landmark Residential Apartment Buildings Act 2020 coming into effect as part of its sweeping reforms aiming to rebuild confidence in the residential construction industry.

Under the Act NSW’s first building commissioner David Chandler OAM will be able to wield broad-ranging investigative powers to prevent defective residential buildings being built and allotted to consumers.

“The days of shonky certifiers and dodgy developers ripping off unknowing apartment buyers are numbered. They are officially on notice —we can now stop you pushing defective buildings onto consumers,” NSW Minister for Better Regulation Kevin Anderson said in a media statement on Aug. 31.

New powers will allow the commissioner and his team to inspect construction sites, issue stop-work orders, oversee developers rectify defects,  and withhold the issuance of Occupation Certificate (O.C) where the building is not up to standard.

Other changes include a compulsory six-month notification that a developer will be applying for an O.C, and on-the-spot inspections of buildings up to six years old, and in extreme circumstances up to ten years old.

Anderson said the new law would provide a massive increase in the level of assurance and protection for consumers.

“They are a critical step in the NSW Government’s commitment to restoring consumer confidence in the building sector,” he said.

The new commissioner Chandler also signalled on Aug. 31 that his team would set its sight on the small percentage of industry players that are not doing the right things.

“Whether you are a builder cutting corners or a certifier passing work that isn’t good enough – expect action from our new team of inspectors,” Chandler warned.

Significant Improvement in The Accountability System

Housing Industry Association (HIA), Australia’s peak residential building, renovation and development industry recognised the new reform as a significant improvement in the accountability system.

The NSW executive director of HIA David Bare told The Epoch Times in an email that the organisation is supportive of the reforms as this means that all participants are now held responsible for the quality of the building, not just builders.

“All those responsible from design to completion are now accountable for their component of the building process, “he said. “This alone will provide greater confidence in the build quality of Class 2 buildings in NSW and ensure clear and traceable records are also maintained on these buildings.”

Bare also revealed that the association had already taken steps to orientate its members to new regulatory regimes, including arranging for meetings between HIA members and the commissioner, organising webinars and other briefings to keep their members informed.

The Association of Accredited Certifiers (AAC) CEO Jill Brookfield also welcomed the new powers granted to the commissioner, with the confidence that this will usher in a new era of customer-oriented regulation that holds all practitioners accountable for the work they produce.

“For too long there has been a lack of accountability from un-registered building practitioners in NSW, and a lack of oversight from regulators, “she told The Epoch Times in an email.

“The Building Commissioner has been clear that those days are ending and that is something we welcome,” she said.

Brookfield is looking forward to working with the commissioner to uplift the practice standard of certifier profession.

“We also recognise that driving these reforms is not just a matter for government,” she added. “Industry must do its fair share in lifting standards, improving the culture, and ensuring consumers are put front and centre.”

Legislations Are Not Perfect But “Hit the Mark”

Despite the support for the reform, Bare is concerned though that the greater oversight will push up construction costs and lead to a decrease in housing affordability.

“Compliance costs in NSW are already very high,” he said. “If the reforms proposed only add more red tape and don’t deliver broader efficiencies for the industry, then housing prices will increase accordingly.”

Bare singled out the duty of care provisions introduced in June 2020 as an example of overlapping, saying the provisions were unnecessary to HIA as there are already statutory provisions in place to protect consumers.

According to the provisions, apartment owners can claim damages for any breach of the duty of care by any person who carries out construction work, including head contractors, subcontractors, manufacturers, suppliers and consultants.

The Residential Apartments Act 2020, along with  Design & Building Practitioners Act 2020 which will come into effect in July 2021, and provides the legislation needed to support the state’s sweeping building reforms following a series of high-profile building defects in Sydney including those at Opal Tower.

In his January article on the vision for the reform,  Chandler conceded the legislations are not perfect, but hit the mark, emphasising that “legislation is important, but it is not the sole driver of change.”