Regulatory Impact Statement (NSW). Building Bill 2022: Part 3 - Building compliant homes
NSW Department of Customer Service
Responses to recent building incidents have driven reforms under the Construct NSW transformation strategy to improve transparency, accountability, and the quality of work in the NSW building and construction industry. The reforms have highlighted the costs of substandard work, which are felt by everyday homeowners and building owners who rely upon building practitioners to produce compliant work.
Building failures across all building types increase costs to building owners, other practitioners, financiers, and insurers to remediate defects and are an increased risk to safety for people left with non-compliant building work. These failures tarnish the industry even for those who produce quality work and negatively impact overall confidence in the building and construction industry.
The Department has implemented significant reforms under Construct NSW, focused on creating clear lines of accountability and significant consequences when practitioners deliver substandard work, including the Design and Building Practitioners Act 2020 (DBP Act), and the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act). The focus of these reforms has initially been on residential apartment buildings.
The Building Bill 2022 (the Bill) is part of the next stage of Construct NSW and is intended to ensure best practice regulation of all building work, complementing and supporting the broader building framework.
Since August 2021, the Department has held five industry roundtables, two focus groups and two written submission processes to support the development of the Bill. A broad cross-section of building and construction organisations across the industry have been represented. Direct consultation was also held with individual stakeholders outside of the roundtables to deep-dive into their feedback on niche subject matter issues.
The purpose of the Bill is to create end-to-end accountability for building work in NSW. This Bill seeks to consolidate and regulate several key elements of the building and construction industry.
These include:
• what building work is intended to be regulated and who should be licensed to perform it
• the approval process for building work
• fire safety requirements for building work, and
• key consumer protections that have been preserved for residential building work.
The Bill also provides an opportunity to extend some of the key features of building regulation in NSW to all building work, including licensing tradespeople, building designers and professional engineers on all buildings.
Key features of the Bill include:
• expanding licensing requirements to cover trades operating in the commercial building sector
• expanding the definition of ‘developer’ to better cover those who should be responsible for contractual and statutory warranty responsibilities, obligations under the home building compensation scheme, and ensuring a definition that is consistent and fit for purpose for commercial developers
• clarify contract processes for residential building work around variations and payment processes. This includes prescribing when payments can be claimed in relation to major work contracts
• restricting the work an unlicensed person can do under the owner-builder permit system
• revising the statutory warranty scheme and the definition of ‘major defect’ for residential building work
• enhancing the dispute resolution model for residential building work to provide a more time and cost-effective way to resolve disputes between licence holders and residential customers
• making it a requirement for all licence holders to supervise the work of unlicensed people in accordance with gazetted practice standards
• bringing all certificates that come after development consent through the planning system into the building system
• consolidating all fire safety requirements for building work, from the design stage, through installation and certification and to maintenance and annual audits, under a single Bill to improve fire safety, and
• introducing a new regulatory scheme for pre-fabricated and manufactured housing.
The Bill aims to reshape consumer and industry interaction with each other and with the Regulator. The customer journey map below illustrates several pathways specialist and industry participants may follow under the proposed reforms. Please refer to Appendix 3 for a text description of the customer journey map.
Contents:
Commissioner’s Message
Glossary
Executive Summary
Consultation Process
1. Key Objectives Of The Bill
2. Home Building Work In The Bill
3. What Happens When Something Goes Wrong?
4. Home Building Compensation Scheme
5. How Do We Transition Industry Into A New Scheme?
Appendix 1 – Building Classifications
Appendix 2 – New Sections Guide
Appendix 3 – Alternative Text For Home Building In Nsw: Customer Journeys
