New NSW Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020

On 2 June 2020, the New South Wales Minister for Better Regulation and Innovation, Kevin Anderson, introduced the Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020 (NSW) (“the Bill”) into the Legislative Assembly. The Bill passed the lower house with amendments on 3 June 2020, and passed the upper house on 4 June 2020 with further amendments. The Legislative Assembly agreed to the Legislative Council’s amendments on the same day and the Bill was assented on 10 June 2020. The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (“the Act”) is due to commence on 1 September 2020.

The Act contains provisions aimed to prevent developers from carrying out construction that may result in building defects, which can lead to significant harm or economic loss. This Act and the Design and Building Practitioners Act 2020 (NSW) are part of the reforms promised by the government in order to improve the quality of construction and provide better protections for consumers against non-compliance within the building sector. The Design and Building Practitioners Bill 2019 (NSW) was discussed in an earlier TimeBase article.

Completion of Building Work

Part 2 of the Act establishes a scheme for developers to notify the Secretary of the Department of Customer Service (“the Secretary”) of intended completion of building work. The scheme requires developers to notify the Secretary at least 6 months before an application for an occupation certificate is made. However, the notification can be made no more than 12 months before the application. An occupation certificate is defined in section 3 as a certificate issued under the Environmental Planning and Assessment Act 1979 (NSW) in order to authorise occupation and use of a new building according with development consent. Subsequent notices to notify of change in circumstance and change in the date of application for an occupation certificate are also required.

This scheme aims to provide the Secretary with a framework to enable them to actively monitor and regulate the performance of building work of residential sites, and support early detection and rectification of serious building defects. Failure to comply with this Part will allow the Secretary to issue an order prohibiting the issue of an occupation certification, and registration of a strata plan for strata schemes.

Investigations and Stop Work Orders

Part 3 of the Act introduces investigative powers for authorised officers in order to conduct proactive in-depth inspection processes to detect serious building defects. Under section 20, authorised officers are permitted to enter premises at a reasonable hour when building work is in progress without a search warrant. However, this power does not authorise officers to enter residential premises without the permission of the occupier or the authority of a search warrant. Section 24 empowers authorised officers to do the following in the course of a lawful investigation at the premises:

• Examine and inspect anything
• Take and remove samples
• Direct a person to produce records for inspection
• Open up, or otherwise demolish part of building work, if the officer has reasonable grounds to believe that it is necessary to do so because it is connected with an offence or a serious defect in the building

Obstruction or interference of these investigative powers, or failure to comply with the direction of an authorised officer can lead to fines of up to $110,000 for body corporates, or $22,000 in other cases.

Part 4 of the Act provides the Secretary power to issue stop work orders, where the Secretary is of the opinion that building work is (or likely is) carried in a manner that could result in significant harm or loss, or lead of serious building defects. These orders will allow the Secretary to manage immediate non-compliance, and additional conditions can be imposed. These orders can be appealed within 30 days of the notice being given.

Rectification of Serious Defects

Part 5 of the Act slows the Secretary to issue building work rectification orders. While a rectification order is in force, the Secretary can prohibit the issue of an occupation certificate or the registration of a strata plan until the defect is rectified.

Section 33(1) of the Act states:

The rectification order may:

• Specify the standard that the building work must meet
• Indicate the nature of the work that, if carried out, would satisfy the standard required
• Require certain building work to be completed
• Require the developer to refrain from certain building work to be done

Failure to comply with either a stop work order or a rectification order can lead to a penalty of up to $110,000 for developers, with an additional fine of $11,000 for each day the offence continues. For body corporates, the penalty increase to $330,000, with an additional fine of $33,000 for each day the offence continues.

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Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) and Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020 (NSW), including supporting documents available from TimeBase's LawOne Service