The Building Assurance Solution (BAS) – the shiny new tool to fix class 2 buildings
The NSW Government has announced the development of a risk rating tool that will assist insurers and purchasers in assessing the trustworthiness of building practitioners and the construction quality of Class 2 buildings.
Background
The Office of the Building Commissioner developed the Construct NSW strategy to improve the construction quality of residential apartment buildings and restore consumer confidence in the construction industry.
As part of Construct NSW, six main pillars of reform were established:
- customer-focused regulatory framework
- ratings systems to provide greater information transparency
- lifting skills and capabilities
- strengthening contracts and standards
- using digital platforms to drive enhanced accountability
- using data and research to deliver continual improvement.
In February, Construct NSW released a report with an update on the pillars. Relevant to the second pillar, the subject of this piece, the report stated that the Office of the Building Commissioner was "working with insurers, financiers, risk rating agencies and building industry practitioners to help develop new products that can evaluate the trustworthiness of developers and other industry practitioners".
In June, the NSW Government, in collaboration with the Centre for Smart Modern Construction at Western Sydney University, released an Industry Report on the Digitalisation of Design and Construction of Class 2 Buildings in NSW. As part of the report, builders and designers were asked which drivers they believe are most important for the digitalisation of the construction industry. The two highest-rated drivers were "achieving greater level of accuracy and trustworthiness" and "improving quality and standards in construction". These drivers, as rated by the industry, can be seen to align with the Office of the Building Commissioner's goal to develop a quality assurance rating system.
The Building Assurance Solution
In July, the Minister for Better Regulation and Innovation published a media release announcing a new tool to determine the quality and trustworthiness of NSW residential buildings, known as the Building Assurance Solution (BAS). The BAS will utilise "multiple data points to help Fair Trading and the insurance industry to access a residential apartment building's quality and compliance with construction standards".
The BAS will be implemented as part of the NSW Project Remediate program and will apply to residential apartment buildings (Class 2), including mixed-use buildings with a residential component.
It is a risk rating tool that will create a "digital DNA" for residential buildings, providing information on:
- the building materials
- the manufacturer of the building materials
- the relevant testing certifications of the building
- who installed and certified the building work.
The BAS will allow insurers and purchasers to access and compare buildings and will act as a portal for keeping detailed records. Digital records will also be kept for all phases of the building work. The objective is to provide purchasers and insurers with transparency and traceability from manufacturing to installation.
The system will assist regulators in identifying potential "risky" practitioners and facilitating the comparison of compliant and non-compliant buildings. This comes as no surprise given the Office of the Building Commissioner's focus on improving the quality of residential apartment buildings and restoring trust in the construction industry through the Construct NSW strategy. NSW Fair Trading, SafeWork NSW and other agencies will also have access to the BAS to assist them with identifying defective work and products.
A Project Remediate Briefing on " Assuring remediated buildings using smart technology" in September confirmed that the BAS will be used to record whether buildings are compliant with applicable building regulations by providing copies of certifications, material traceability and a risk rating for building practitioners.
A consortium of KPMG, Microsoft, Mirvac, ASX and Western Sydney University won the contract for building the BAS. KPMG is developing the tool and a Mirvac project will be used during the pilot. A working model of the platform is planned to be available by the end of 2021.
Benefit to industry participants and owners
The BAS tool will enable insurers, industry purchasers of goods and services, end-user purchasers and owners to access a depth of information not otherwise readily accessible. This information empowers better decision making and accountability. It will also assist in the event of defects, for example, in identifying those involved in the chain.
Should insurers embrace the tool, it may improve building and professional indemnity insurance, availability and affordability for buildings and practitioners whom the data reflects well on (and vice versa of course).
The Insurance Council of Australia has endorsed the BAS for its potential to benefit consumers and is open to working with the NSW Government to provide insight on areas for data collection.
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.
