Australia: Maddocks further changes to the Building Act 1993 commenced on 1 September 2016
The second wave of amendments to the Building Act 1993 (Act) commenced on 1 September 2016. This follows the first round of amendments that occurred on 4 July 2016.
The amendments are found in Building Legislation Amendment (Consumer Protection) Act 2015, which we summarised in an alert in December 2015 (New building Bill introduced into Parliament). Remaining amendments are to be implemented some time in 2017.
Changes to the Building Act 1993 effective from 1 September 2016
Abolition of Building Practitioners Board
The Building Practitioners Board (BPB) has been abolished and its functions and powers will be transferred to the Victorian Building Authority (VBA). This means the VBA will now be responsible for:
- the registration of building practitioners
- the supervision and monitoring of building practitioners’ conduct and ability to practice
- issuing certificates of consent to owner-builders.
The transitional provisions provide that any inquiry commenced by the BPB before its abolition on 1 September will continue to be heard by the BPB meaning that it will remain in existence to the extent necessary to complete those inquiries. We understand that the there are several inquiries on foot so the BPB will continue to hear those matters over the months ahead.
The VBA can delegate its decision-making role to any person, staff or contractor. Unlike the BPB whose membership included individuals appointed in respect of each category of registered building practitioners, the amendments do not specify the decision maker must be a registered building practitioner or hold similar industry experience in order to decide the application.
From 1 September 2016, a new disciplinary process will be administered by the VBA. Where the VBA considers that reasonable grounds exist for taking disciplinary action, the VBA will issue a Show Cause Notice to the practitioner. The Show Cause Notice must set out specific information including the type of disciplinary action proposed to be taken, the ground for the proposed action and outline of facts and circumstances forming the basis for the ground of the proposed action. The practitioner will be invited to say why the proposed action should not be taken.
Following those submission the VBA will then decide whether to impose the action proposed in the Show Cause Notice or some lesser action. This process could streamline the disciplinary process if the Show Cause Notice gives the practitioner a degree of certainty about the worst action that could be taken about them and is content to accept that action rather than defend the matter. For example, if a Show Cause Notice says that the VBA will reprimand and fine the practitioner, the practitioner might decide that they can live with this outcome and will not seek to defend the matter other than to give a written reply on matters that mitigate or explain the conduct. If the Show Cause Notice is not specific about the action that may be taken, ie. it just lists all of the possible actions open to the VBA, the practitioner will be none the wiser about what might happen to them and would be more inclined to defend the matter for fear of having their registration suspended or cancelled. It remains to be seen what approach will be taken by the VBA to this new process.
Once the show cause process is complete and a decision is made by the VBA, a practitioner is entitled to seek an internal review of that decision by a senior VBA decision maker. If the practitioner remains unsatisfied with the review they may apply directly to VCAT for a review of the decision.
The Act introduces new grounds for disciplinary action against a registered building practitioner including:
- failing to comply with an order or direction given by the relevant building surveyor
- failing to comply with a determination, a direction of the VBA or VCAT under the Domestic Building Contracts Act 1995
- accepting an appointment as a building surveyor from a domestic builder in contravention of the new s 78(1)(a) (discussed below).
Practitioners registered from 1 September 2016 will be registered for a maximum period of five years. Practitioners must seek renewal after the expiration of five years and practitioners must:
- hold prescribed qualifications
- comply with prescribed continuing professional development requirements
- comply with any other renewal criteria or conditions prescribed by the Regulations.
Practitioners who were registered prior to 1 September 2016 will be required to transition to the new five year registration period by reapplying for registration.
The previous requirement to be of ‘good character’ is replaced with a new ‘fit and proper person to practice as a building practitioner, having regard to all relevant matters, including the character of the applicant’. This test will be applied to all registrations and re-registration applications received from 1 September 2016.
Codes of Conduct
A new provision gives the VBA authority to approve Codes of Conduct for building practitioners. The provision provides that a code of conduct may be prepared by the VBA or it may be prepared and submitted to the VBA by an organisation representing the building practitioners. In preparing a code of conduct, the VBA must consult with any prescribed organisation representing building practitioners and may consult with any other organisation.
The code of conduct must be published in the Government Gazette and the building practitioners are required to comply with any code of conduct that is applicable to the building practitioners’ category or class of registration. The provisions provides that disciplinary action may be taken by the VBA against a registered building practitioner who failed to comply with an approved code of conduct.
Appointment of relevant building surveyor
The amendments provide that a domestic builder must not appoint a private building surveyor on behalf of the owner. This applies whether or not the builder has formally entered into a major domestic building contract with the owner. Furthermore the private building surveyor must not accept appointment from a builder.
As noted above, accepting an appointment from a domestic builder is a new ground for disciplinary inquiry.
The effect of this new provision is that it requires the owner to directly appoint the private building surveyor where the building work is domestic building work. The appointment of a relevant building surveyor can be distinguished from the application for a building permit. The appointment is the agreement between the owner and the building surveyor for the provision of services by the building surveyor. Provided an owner appoints the chosen building surveyor, they could then ask their builder to deal directly with the appointed surveyor from that point on, including to apply for the building permit, answering any questions about the application and dealing with any requests for variations to the permit or the like.
There is nothing to prevent a builder from recommending a private building surveyor to an owner provided the appointment is made by the owner. This is best evidenced by the owner personally signing the building surveyor’s’ terms of appointment and/or contract terms. However, there is a difference between recommending a building surveyor to an owner and ‘forcing’ an owner to use a particular building surveyor. If a builder forces an owner to use a particular building surveyor, they may be in breach of consumer laws.
If you require advice on the changes to the Building Act and their implications for you please contact Bronwyn Weir.