POWERS OF INFLUENCE: A Recap Of The NSW Building Commissioner’s Compliance And Enforcement Powers

In 2020, fundamental legislative changes were introduced in NSW that delegated far-reaching powers to the NSW Building Commissioner, David Chandler OAM, to investigate and enforce non-compliance throughout the design and construction process for residential apartment buildings.

Serving as a major keystone in the NSW Government’s reform of the residential building industry, the Residential Apartment Buildings (Compliance and Enforcement Powers) Act (NSW) 2020 (RAB Act) has equipped Chandler with new abilities to stop work, halt occupation certificates (OC’s), and order immediate rectification work on NCC Class 2 developments.

As of July 2021, the Commissioner has personally attended over 65 site inspections including 30 audits of projects approaching OC and issued 22 orders to numerous developers - all of which can be viewed publicly on the NSW Fair Trading website.

So, what do the Commissioner’s new powers entail? And how have they influenced the industry during their relatively short time in existence?

Stop Work Orders

In accordance with the RAB Act the Commissioner, and his authorised delegates, can order a developer to ensure that work stops on a building by a specified date if he forms the opinion that the building work is likely to result in significant harm or loss to the public, occupiers, or potential occupiers of the building or cause significant damage to property.

So far, only one stop work order has been issued by the Commissioner after serious concerns were raised over the developer’s failure to appoint a principal certifying authority to supervise the work, and no scope of works or appropriate technical specifications were included in the building contract.

Rectification Orders

If the Commissioner, or his authorised delegates, reasonably believe that building work was or is being carried out in a manner that could result in a serious defect to a building, they may order a developer to carry out building work to remediate the serious defect or potential defect. The cost of which may be directed back to the developer.

Over 13 building work rectification orders have been enforced since November 2020, for reasons ranging from insufficient waterproofing methods and inadequate tiling adhesive to a failure to install safety barriers in the vicinity of a car stack parking system. Importantly, these orders are now being applied to buildings that have already achieved OC and now require considerable rectification works.

These rectification orders are directed at the developer but have clear flow on impacts to the parties involved in designing, constructing, and approving the works.

Prohibition Orders

Developers must now provide at least 6 months’ notice of their intention to apply for an OC. In this regard, a prohibition order preventing a certifier from providing an OC can be issued in circumstances where the developer has either failed to provide the required notice, or where the Commissioner is satisfied that a serious defect exists in the building.

An OC issued in contravention of a prohibition order will be invalid, and certifiers that disobey the order can land themselves with a penalty notice of $3,000 for an individual or $11,000 for a corporation. More than eight prohibition orders have been served on developers since the power came into force, which creates considerable impact for projects that need to reach OC for settlements to occur.

To assist the Commissioner and his team to ensure compliance with the new laws, further investigative powers are in place which allow ‘authorised officers’ to request information and records relating to the construction of a residential apartment; require a person to attend an interview to answer questions; and enter a building site or business premises without notice. Whilst on premises, officers may inspect, examine, and take samples of the building work by means of reasonable force to break open or otherwise access an element of the works. ‘Destructive testing’ is also permitted if the officer considers it reasonable in the circumstances.

When considered in conjunction with other recent reforms, like the new registration requirements under the Design and Building Practitioners Act (NSW) 2020, it is clear that the government is serious about bringing a compliance and responsibility focused regime into this industry. The message is clear, get the plans right, build in accordance with those plans, and deliver compliant buildings with a full set of plans to back up the physical.

These changes are already having an impact on not only the upfront compliance costs, but time and costs incurred during programming, however, those costs pale compared to the considerable rectification costs required to lift orders of the commissioner.

Hamish Geddes and Josh Mills

Morrissey Law + Advisory