In a previous edition, we examined the special circumstances required to be shown to enliven the discretion for the approval of owner builder permits (OBP) for dual occupancy projects.
The recent decision in Wu v Commissioner for Fair Trading, Department of Customer Service[2024] NSWCATOD 161 builds on the existing caselaw in this area.
In this case, the applicant's purpose for the dual occupancy dwelling was not to sell either or both of the dwellings, but to live in one of them and rent out the other or to have the applicant's parents-in-law stay in the other. The applicant was the director and nominated supervisor of a licensed builder, but did not want to incur the cost of obtaining a policy of insurance under the Home Building Compensation Fund (HBCF).
The internal review decision had confirmed the rejection of the application, noting that:
- the intent for family members to reside in one of the residences was not an uncommon, unusual nor exceptional scenario
- it was not the intent of the OBP scheme to provide rental income through property development
- the preference not to obtain HBCF through the applicant's company was not preventative of the development.
The applicant filed no additional supporting evidence when the matter came before the Tribunal.
The Tribunal considered the facts and reasons in its earlier decisions on special circumstances, which followed the purpose revealed in the second reading speech, namely, to ensure appropriate controls on building and construction work and to avoid development of dual occupancies for commercial purposes and/or financial advantage by owner-builders.
The Tribunal concluded that no factors causing financial hardship to the applicant had been shown, nor had it been suggested that the development could not proceed unless an OBP was granted. The preference for the applicant's company not to incur the cost of HBCF was held not to prevent the development, either by the company or another licensed builder. The alternative commercial motivation (to generate rental income) was also determinative.
In contrast, in the earlier decision of Hammoudi, which allowed an application, there were issues of future provision for accommodation for a family member who cared for the applicant and his wife as they entered old age, as well as evidence of no intention to subdivide and that the applicant could not afford to build a home using a contracted licensed builder.
Interestingly, the draft Building Bill 2024 does not provide a specific pathway for dual occupancy OBPs in the same way as section 32(1A) of the Home Building Act 1989, but provides a discretion to the Secretary to grant an application if special circumstances are shown, despite not being satisfied that "the intended principle place of residence is not a secondary dwelling" or that the applicant or a co-owner hadn't had held another OBP within the five year period prior to the application. It is unclear if the secondary dwelling concept in the draft bill is intended to refer to a dual occupancy context or a holiday home context. If the latter, then the policy direction is to close down the dual occupancy exception altogether.
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