From 11 June 2020, the NSW Government introduced their first tranche of reforms to the building and construction industry in the form of the Design and Building Practitioners Act 2020 (NSW) (the Act).
The Act is characterised by 3 main changes:
- duty of care owed to landowners;
- greater accountability and transparency of builders through the new regulatory framework; and
- broader investigative and enforcement powers of the Department of Customer Service (Department).
We deal with each briefly below.
1. Duty of Care for Construction Work
Under the Act, persons carrying out construction work have a duty of care to landowners (including subsequent owners) to exercise reasonable care to avoid economic loss caused by building defects or arising from the construction work.
Construction work is given a broad meaning under the Act, and includes without limitation:
a) building work;
b) preparing designs for building work;
c) manufacturing and supplying building products for building work; and
d) supervising, coordinating, project managing or otherwise having substantive control over the carrying out of such works.
Importantly, the duty of care applies retrospectively to losses that became apparent within 10 years of the commencement of the Act. Parties to a building contract may not contract out of this duty of care.
2. Regulatory Framework
Who and When: from 1 July 2021, design practitioners, principal design practitioners, professional engineers, specialist engineers and building practitioners (together, the Practitioners) will be required to register with the Department.
What and Why: Practitioners will be required to provide principal design and building compliance declarations to the Department, declaring that the design and building work complies with the requirements of the Building Code of Australia (Declaration). A Declaration:
a) can only be provided by a Practitioner who is registered under the Act; and
b) is required before an application for an Occupation Certificate can be made.
3. Investigation & Enforcement Powers
From 1 July 2021. the Department will be able to:
- investigate Practitioners;
- direct persons to provide information and records;
- enter premises and examine, take photographs and seize items; and
- issue “stop work” orders and penalty notices.
These changes can have significant impacts on new, existing and completed construction projects.
If you wish to discuss how these changes may impact you or your business, contact our team on (02) 9299 0112.