IN THE KNOW —
More amendments to the Building Act You might not have known about it, but on 8 June 2021 big changes were made to the Building Act once again. These changes are to be found in the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Act 2021. A few of them came into force on 8 June, and the rest have been deferred until 15 months later, unless the Government chooses to bring them in sooner. These changes were first floated in a 190-page discussion paper released by MBIE in April 2019. Some of them were quite radical, such as extending licensing from the purely residential into the top end commercial sector, and reducing the number of specialist license categories but increasing their technical competence requirements. Another proposal was to require you to get a special supervision licence before you could supervise restricted building work. And it was also planned to make it compulsory for every residential project above a certain value to be covered by an insurance policy or guarantee issued by a third party.
The maximum fine for committing an offence under the Building Act, particularly where the health and safety of the public is at risk, is $1.5 million for a company and $300,000 for an individual. In addition to those radical proposals there were a number of more conventional changes planned, that nonetheless will be quite significant for the industry. It is those more conventional changes that have found their way into the Building Act this time around, whereas the others are either a work in progress or they have been abandoned because they are too impractical. The changes that are in force already mostly relate to increasing the penalties for committing an offence under the Building Act. In some cases these increases are substantial, particularly where the health and safety of the public is at risk, in which case the maximum fine for a company is $1.5 million and for an individual it is $300,000. For example, those maximum fines apply if someone who is in the business of on-selling homes that they either built or acquired for the purpose of resale, completes the on-sale or allows the purchaser into possession before a CCC is issued. That is, unless they have contracted out of that requirement with the purchaser. Apart from those, the penalties that are of most relevance to residential builders are: • The maximum fine for carrying out restricted building work that you are not licensed to do, or supervising restricted building work that you are not licensed to carry out or supervise, jumps from $20,000 to $50,000.
18
• The maximum fine for engaging someone to carry out or supervise restricted building work, knowing that they aren’t licensed to do so, is now $50,000 for an individual and $150,000 for a company. • The maximum fine for failing to comply with a notice to fix relating to residential swimming pool barriers, is now $20,000 for an individual and $60,000 for a company. • The maximum fine for failing to comply with a request to produce evidence of being licensed, or for failing to notify the Registrar of any change in the information you supplied in order to obtain or renew your licence, is now $5,000. • The maximum fine for representing that you hold a certain licence which in fact you don’t have, is now $50,000. • If you don’t supply the mandatory checklist or disclosure statement the maximum fine is still only $2,000, but if you knowingly make a non-trivial false or misleading statement or omission in your disclosure statement, the maximum fine is now $50,000 for an individual and $150,000 for a building company. • The maximum fine for knowingly making a non-trivial false or misleading statement or omission in any communication, application, or document that is required to be made or given under the Building Act or Regulations, is now $20,000 for an individual and $60,000 for a company.
