Dodgy NSW builders, developers and certifiers are expected to get a kick up the backside as sweeping new powers come into force, with the state’s construction watchdog aiming to shake up the industry to provide confidence for prospective buyers.
In June 2020, two new laws passed NSW Parliament – first, the Residential Apartments Act 2020, which provides the Building Commissioner with broad ranging investigative powers to inspect building sites.
Second, the Design and Building Practitioners Act 2020 requires the registration of designers and engineers alongside practitioner declarations of compliance of their work. This Act also introduces a new Statutory Duty of Care to the homebuyer.
“We’re out to shake the game for those who aren’t operating good businesses and who aren’t delivering good projects,” David Chandler, NSW Building Commissioner, told The Sydney Morning Herald.
“Whether you are a builder cutting corners, or a certifier passing work that isn’t good enough, expect action from our team of new inspectors.
“The game is changing. If I was a customer thinking about buying an apartment in NSW right now, I’d be confident to do so.”
To those dodgy operators, Chandler has a blunt warning – the days of a small group of these people choosing to act as ‘signatures for sale’ are over.
“If they think they can continue to treat the issuance of occupation certificates lightly, then it is time to think again,” Chandler continued.
Industry sources say other states and territories are contemplating action to clean up their own construction industries but senior leaders approached by The Fifth Estate declined to comment, saying only they were keeping a close eye on events in NSW as they unfold.
The Fifth Estate reached out to industry organisations such as the Australian Building Codes Board, Master Builders, Victorian Building Authority and the Queensland Building and the Queensland Building and Construction Committee.
Ross Taylor, specialist consultant on waterproofing issues and advisor to Mr Chandler, told The Fifth Estate that Sydney’s high-rise residential sector is home to “plenty of cowboys who have run amok, employing sub-standard design and building practices”.
“With the new Act, operators who have been having a free run at transferring the risk and cost of defects to consumers have reason to be nervous,” Taylor continued.
“Over many years, I have witnessed severe shortcomings in the regulations that were supposed to protect consumers who buy into high-rise residential buildings, so it’s great to see effective regulatory reform under way.”
There are two key focuses of reform – the first enables new inspection powers to hold serial offenders to account, and the second, coming into effect in July 2021, requires new mandatory minimum design documentation before any work is done on a development.
“We have set up a team of 12 industry professionals, with representatives from the Institute of Architects and Masters Builders Australia, and we are putting forward recommendations for changes to the Building Code of Australia, with particular regard for waterproofing,” Taylor said.
The team includes well known sustainability architect Caroline Pidcock and Kathlyn Loseby, chief operating officer of Crone Architects and former chapter president of the Australian Institute of Architects.
Mr Taylor said deficient waterproofing is consistently shown to be the industry’s main problem, followed by fire safety and structural issues.
“There’s billions of dollars spent on rectifying defects across the building industry, and 80 per cent of the rectifying costs that are found in most high-rise residential buildings are water-related, such as leaching or staining.”
He said there were also intentions to upgrade Australian standards and documents, including technical specifications, in order to align them more accurately with current building methodology.
“Some of the recommendations we are putting in are to shift emphasis on designing buildings that take into account waterproofing risks as an integral part of the design.
“We want to change the paradigm to one of water-shedding before waterproofing, which is based on ancient principles of using drainage more efficiently.”
Taylor believes that if things don’t change, these issues will just keep getting worse, as all future high-rise residential buildings will be affected by this in one way or another.
“On average, with new high-rise residential buildings getting developed, we find to have around $6-10 million worth of defects built right into it, meaning consumers will unsuspectingly acquire these issues when they first move in, and it’s only a matter of time before they become apparent,” Mr Taylor said.
“Under the current legislation, consumers have very little course of action to recover defects that occur. This legislation seeks to correct that.”
“Our work is indeed working on preventing this from occurring in the first place, and, through the auditing process, will make it plainer to the industry the consequences of not complying. The National Code, the way it stands, is not serving the industry well.”
There are six working groups that the Building Commissioner has convened to look at key areas such as the regulatory framework, information transparency, skills development, contracts and standards, digital platforms for capturing and storing data, and using data to drive continual improvement, and the Housing Industry Association (HIA) is a member of them all.
David Bare, HIA NSW executive director, is supportive of the reforms, as it now means that it is not only the builder that is held responsible for the quality of the building.
“All those responsible from design to completion are now accountable for their component of the building process,” Bare continued.
“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.”
But, Bare feels that the Act’s new Statutory Duty of Care provision to the homebuyer is unnecessary, as there are “already substantive statutory provisions in place to protect consumers”.
“HIA is particularly at odds with the duty of care being retrospective, meaning that a building completed up to 10 years ago can now be subject to the new provisions within this Act,” Bare said.
“Compliance costs in NSW are already very high, and if the reforms proposed only add more red tape and don’t deliver broader efficiencies for the industry, then housing prices will increase accordingly.”
The Board of Professional Engineers of Queensland (BPEQ) welcomes the NSW government’s commitment to adopting a registration scheme for engineers.
“Registration of engineers provides a public safeguard and other states and territories could learn a lot from Queensland’s mandatory registration scheme for engineers, which has existed since 1930,” a BPEQ spokesperson said.
“Under the registered professional engineer of Queensland scheme, only people who are deemed to be qualified and competent are registered and legally entitled to carry out professional engineering services.
“The conduct of any person who provides a professional engineering service in or for Queensland can be referred to BPEQ for investigation and disciplinary action if something goes wrong with the service.”
Recently, the NSW Building Commissioner has put four developers on notice under the sweeping new powers, telling them his office will audit their apartment projects to make sure they conform with the approved plans.
“We’d expect to be receiving 100-120 notices a month going forward and we’d be expecting to see eight to 10 projects in a typical month to commence an OC audit,” Chandler concluded.