NSW Building Legislation Amendment Bill 2021 Receives Assent

Friday 16 July 2021 @ 12.02 p.m. | Legal Research

On 5 July 2021, the Building Legislation Amendment Act 2021 (NSW) (‘the Act’) received the Royal Assent. The originating Bill, the Building Legislation Amendment Bill 2021 (NSW) ('the Bill'), was introduced in the Legislative Assembly on 12 May 2021 by Minister for Better Regulation and Innovation Kevin Anderson (‘the Minister’).

Since its assent, the Act has partially commenced.

The goal of the Act is to transform the building regulations in NSW in an effort to encourage change in the behaviours of those within the building and construction industry. This Act makes up part of the Government’s reforms, which was a response to the 2019 Building Confidence Report. The Minister noted in his second reading speech that these reforms are:

“focused on improving building quality and restoring consumer confidence in the NSW construction industry”.

In regards to the Act itself, the Minister noted that:

“the amendments … will enhance compliance and enforcement powers of the regulator, ensure industry contributes to the cost of administering the new Design and Building Practitioners Act (‘the DBP Act’) compliance declaration scheme, and make minor machinery changes to other building legislation necessary to detect, investigate and require the rectification of serious building defects for the benefit of consumers in NSW”.

A New Levy on Developers and Building Owners

The Act amends the DBP Act in order to introduce a new levy on developers and building owners. This levy aims to support the new scheme for compliance with building safety standards, which is contained within the DBP Act. The levy is intended to support the costs associated with overseeing this new scheme.

The Minister commented in his second reading speech that:

“the building regulator has sufficient resources to support this scheme ... [but that] it is wholly appropriate that industry contribute to the costs of administering the scheme”.

The levy would cover costs such as:

  • risk audits on designs and building work; and
  • licensing of practitioners to undertake the design and building work.

The Minister further commented in his second reading speech:

“We have seen time and again that where construction projects do not have good-quality plans in place at the start of a project, or where designs are not followed, that defects occur all too frequently. This imposes expensive rectification work on the developer … or what happens too often is that the cost is passed on to the end consumer”.

The levy intends to support a scheme which will encourage compliance with building standards from the beginning of a project. The levy aims to prevent these costs from being transferred to developers and consumers.

Further Amendments

The Act also provides that variations to regulated designs can be required to be lodged on the NSW Planning Portal prior to the commencement of building. Prior to these amendments, initial designs were required to be lodged before building commences, while variations were not.

The Act also makes amendments relating to the registration of professional engineers. The Government found it necessary to introduce regulation-making powers to strengthen the competency of professional engineering bodies when it comes to assessing professional engineers, following public consultation on the Draft Design and Building Practitioners Regulation 2021 (NSW).

Closely related to the regulation-making powers introduced by the Act, is the insertion of section 55A to the DBP Act. Section 55A provides that a person who is aggrieved by certain decisions may apply for review in the NSW Civil and Administrative Tribunal. Such decisions include those relating to:

  • refusal to grant recognition;
  • suspension or cancellation of recognition; or
  • imposition of conditions on the grant of recognition.

Additionally the Act also amends the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) ('the RAB Act'). The Minister comments that the amendments introduces another levy, which is intended to help:

“meet the costs of administering the Home Building Act and other prescribed Acts through contributions from industry”.

Furthermore, there will be strict circumstances governing when this levy will be imposed, which will be later prescribed by the Government.

The RAB Act also includes grounds for prohibition orders. The Minister explains in his second reading speech that these orders:

“prevent an occupation certificate being issued so that the developer has a financial incentive to fix the defective building work”.

The Act adds new grounds for issuing a prohibition order, including where a develop has failed to comply with an order to produce designs in order to fix defects.

According to the Minister, the overall aim of the Act is to:

“regain public confidence in a new, customer-facing industry by 2025 ... it is about accountability, transparency, and quality”.

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Building Legislation Amendment Act 2021 (NSW), Bill and explanatory materials available from TimeBase's LawOne service. 

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