Draft Design and Building Practitioners Bill 2019 released for public consultation
On 2 October 2019, the NSW Government released the draft Design and Building Practitioners Bill 2019 (Bill). The draft Bill will be open for public consultation until 16 October 2019.
The draft Bill forms part of the NSW Government's plan to 'build stronger foundations', which is being implemented by the Government in response to the Shergold-Weir Report, which we wrote about in a previous article here.
The draft Bill introduces accountability measures for building practitioners involved in the design of certain buildings to be prescribed by the Regulations that will sit alongside the Bill (yet to be developed, although it is said that the relevant class of buildings will begin with multi-storey residential buildings and expand over time). It does so by introducing key reforms intended to improve the quality and compliance of design documentation with the Building Code of Australia (BCA) and other relevant regulations.
In particular, the draft Bill introduces the concept of 'regulated designs', which include designs for a building element and performance solutions for prescribed classes of building work or a building element. If a design is recognised as a 'regulated design' for the purposes of the new legislation, design practitioners involved in those designs must be registered under a new registration scheme (and insured as a condition of registration) and will be required to declare in a form prescribed by the accompanying Regulations that the design is compliant with the BCA and other applicable requirements ('design compliance declaration').
In addition, building practitioners (also to be registered and insured) who subsequently carry out the construction work for a project with a 'regulated design', are required to declare, amongst other things, if the building is constructed in accordance with the 'regulated design' and complies with the BCA ('building compliance declaration'). If any part of the building does not comply with the BCA, the builder may be at risk of a fine up to $330,000 (3,000 penalty units).
By making a false and misleading statement, practitioners may be at risk of a fine up to $220,000 (2,000 penalty units) or imprisonment for 2 years, or both.
It appears that developers (who are not otherwise designing or carrying out the work) are not required to give declarations under the draft Bill.
In addition to the compliance elements with their associated civil penalty and disciplinary implications, the draft Bill also imposes on a person who carry out construction work (which includes building work and design work) a duty to "exercise reasonable care to avoid economic loss caused by defects in or related to a building for which the work is done".
The classes of buildings to which the duty relates are to be prescribed by the Regulations. The duty will benefit a wide range of owners, including owners corporations and successors in title.
The draft Bill expressly provides that the new duty is in addition to duties, statutory warranties or other obligations imposed by the Home Building Act 1989 (NSW) (HBA), other Acts or the common law. Unlike the statutory warranties under the HBA, the Civil Liability Act 2002 (NSW) will apply to the new duty, that is, an action for breach of the duty will be considered an apportionable claim.
If passed, the draft Bill would apply to arrangements for the preparation of regulated designs or the carrying out of building work entered into after commencement.
The NSW Governments intends on presenting a final Bill into Parliament by the end of 2019 and aims to consult on the Regulations which will sit alongside the final Act in 2020.
The draft Bill indicates that the Regulations will set out the categories of 'regulated design' to which the new legislation will apply. It is also proposed that the Regulations may make provision for or with respect to prohibiting the issue of complying development certificate or a certificate under Part 6 of the Environmental Planning and Assessment Act 1979 unless one or more compliance declarations or final regulated designs have been provided to the issuer of the certificate.
Further updates will track the progress of the draft Bill and the all-important Regulations, which will reveal the full extent of the application of the new measures, in particular as to the classes of affected buildings.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.