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  • Subject Name : Law

Design and Building Practitioner Act

Contents

Introduction.

Reasons for introducing the “Design and Building Practitioner Act 2020”.

Obligations of Building Practitioner in The Act.

Consequences of Building Practitioners for Non-Compliance of The Legislation:

References.

Introduction to Design and Building Practitioner Act

As the building development industry has grown in Australia by leaps and bounds, there was a burning need to implement a law which keeps in check the activities related to building design and construction. That is where, the “Design and Building Practitioners Act 2020” was implemented, with effect from 11 June 2020.

There is an existing Building Code of Australia, which provides for the designs that each building being constructed in Australia should comply to, with the introduction of “Design and Building Practitioners Act 2020”, all the key participants will be regulated and will need to ensure that all buildings comply to Building Code of Australia.

Reasons for Introducing the “Design and Building Practitioner Act 2020”

As explained above, the act aims at implementing a regulation for the people engaged in design and development of the buildings, the need for implementation of such an Act was felt as a result of the Shergold Weir report, wherein the shortcomings in implementation of National Construction Code were pointed out. Since there has been a surge in demand for new houses being built across New South Wales (NSW) region, a lot of new developers have come up who didn’t comply with the construction code, as applicable in the state, as a result of which there were numerous concerns being raised on the defects in the building and combustible cladding being used in the construction.

There has been a detailed study on the defects that have been identified and reported in the new properties constructed in Australia, also covering the properties constructed in NSW region, such studies were conducted by Deakin and Griffith Universities, as a result of such researches, it was established that:

  • There was atleast one defect, in as much as 85 per cent of the new residential apartment buildings
  • The defect rate in NSW region was as high as 97 per cent
  • The defects identified pertained to both design and construction issues, 50-60 per cent were relating to design issues, whereas the balance 40-50 per cent pertained to construction related issues.
  • Cladding, fire protection and waterproofing remained the most commonly observed defects
  • A defect in structure is what affects the community more, as it can be as dangerous as causing the loss of lives, but there has not been any instance for structural defect.
  • Although, majorly there has been a single defect which is identified in the most of the buildings, such one defect

The objective of implementing the act is to bring in a regulation for such developers, planners and builders, so that the remain regulated and ensure compliance to the applicable construction code of the state. In the recent past there have a number of defects which were noticed and reported in the high-rise buildings across NSW. Though the act seems to be a right move in the direction so as to control and reduce the number of defects in the buildings and contravention of the applicable code, so as to ensure that the buildings being constructed in the region are safe for living, but the experts are unsure about the approach adopted by the government.

There is a structural deficiency in the way this industry of building construction is currently operating, i.e. each developer uses a special purpose vehicle to build the apartment buildings and such special purpose vehicle is dissolved after the completion of construction. There doesn’t exist any contractual relationship between the builder and the buyer, who has bought the apartment off-the plan. The Courts have held that there doesn’t exist any duty of care between the home buyers and builder. The owners of the houses are only entitled for claiming warranties depending on the nature of defect that has been identified in the building, if it is major defect, the statutory warranties are forceable for six years, whereas for any defect other than the major defect, they are enforceable for a period of two years. For any defect being identified after the enforcement period for the defects, the cost of getting the defect rectified falls on the owner of the house. The act has recognised this issue existing in the property market and has proposed to bring about, following changes in the manner of operation of the property development industry:

  1. New Structure and meaning of Duty of Care

One of the most significant reform that occurred from this act, is implementation of a non- legal duty of care, which has been applied retrospectively and provide no way to escape for the developer and builders. The duty of care, as imposed by this Act, provides that the builders shall be responsible to the land-owners for any economic loss caused to them, as a result of the construction activity.

The Act has gone a step ahead and also clarified the definition of 'economic loss', which is kept broad so as to cover not only the cost of repair but the cost of suitable accommodation that the owner shall use during the time, when the repairs would be carried out.

  1. Practitioner’s register:

Building construction requires involvement of various types of people including but not limited to engineers, designers, developers, etc. who come together to execute building development, this act requires each of them to be registered in this comprehensive regime, so as to be able to keep a check on their activities and to be able to establish the relationship of each of the professionals with the property where the defects have been identified.

  1. Declaration of Compliance:

In order to ensure that the practitioners engaged in the design as well as building of the house doesn’t escape out of their responsibility in future, they are required to give a compliance certificate wherein they would self-declare that they have complied to all the requirements imposed by the BCA. It is only after the receipt of the certificate, that the occupancy certificate shall be issued by the government.

  1. Compulsory insurance:

Any person who is giving the declaration, should be adequately insured, this is with the objective that In case a non-compliance is observed in future, the government can directly approach the insurance company to claim damages, in case the person goes bankrupt or doesn’t have sufficient resources to pay the damages.

Obligations of Building Practitioner in The Act

Building practitioners have been obligated to do various tasks in this act, which includes the following:

  1. Building practitioner is made liable to submit with the secretary, the relevant documents for the building works within a period of 90 days after the issue of occupancy certificate.

In case of non-compliance to this provision, a penalty of 500 units shall be levied in case the building practitioner is a body corporate and 100 units in other cases.

  1. Building practitioners shall also receive the notices before and after making an application for the occupation certificate.
  2. A building practitioner is also required to provide a building compliance declaration for building work, contractor document, etc to the person for whom he executed the work and such submission shall be made, prior to the request for occupation certificate of the building is made.

In case of non-compliance of this provision, a penalty of 1500 penalty units shall be levied in case the building practitioner is a body corporate and 500 penalty units in other cases.

  1. It is the duty of the building practitioner to ensure that each regulated design for the building is prepared by registered design practitioner. He is also obligated to take the principal design declaration from such design practitioner, to ensure the compliance of applicable design guidelines as per the state.

In case of non-compliance of this provision, a penalty of 3000 penalty units shall be levied in case the building practitioner is a body corporate and 1000 penalty units in other cases.

  1. In case there is any deviation in the building works, after the commencement of work, it is the responsibility of the building practitioner to ensure that such variation has been recorded in the form and manner as prescribed by the regulations.

In case of non-compliance of this provision, a penalty of 3000 penalty units shall be levied in case the building practitioner is a body corporate and 1000 penalty units in other cases.

  1. Ensuring compliance to the Building Code of Australia, is also am obligation of the building practitioner, he is required to ensure that all the building works carried out in the building, complies to the regulations provided by Building Code of Australia.

In case of non-compliance of this provision, a penalty of 3000 penalty units shall be levied in case the building practitioner is a body corporate and 1000 penalty units in other cases.

  1. If there any steps contained in the compliance declaration filed by the building practitioner, which are required to be complied by him, he shall also submit a written notice to the certifier, with the steps listed out, before the issue of occupancy certificate by the certifier.

In case of non-compliance of this provision, a penalty of 3000 penalty units shall be levied in case the building practitioner is a body corporate and 1000 penalty units in other cases.

Consequences of Building Practitioners for Non-Compliance of The Legislation

The practitioner might face cancellation, suspension, or modification of their registration, in case, among other things, it is observed that the practitioner has not complied to the provisions of the Act

In case of non-compliance, the secretary can impose monetary penalties as well on the practitioners, and if the decision has been taken to levy monetary penalties, till the time the same have been paid, registration shall remain suspended and amount may be recovered as a debt, in the court of competent jurisdiction.

In addition to these overall penalties specified for non-compliance with the legislation, there are also various penalties which have been specified in the individual sections and non-compliances. For each non-compliance that has been made by the practitioner there is a separate penalty applicable on the practitioner, as per the law. Though, the law also provides for remedies in case unjust penalties are being levied on the practitioner for no mistake of his.

The act also provides for warning notices to be sent to the practitioners in order to ensure that they follow the guidelines in the upcoming projects, these are like early warning signals for them, that in case of further default there could be severe actions and monetary penalties against them.

References for Consequences of Building Practitioners

An Examination of Building Defects in Residential Multi-owned Properties, accessed on 17 September 2020, available at https://www.griffith.edu.au/__data/assets/pdf_file/0030/831279/Examining-Building-Defects-Research-Report.pdf

Design and Building Practitioners Act, 2020 No. 7, accessed on 17 September, 2020, available at https://legislation.nsw.gov.au/view/html/inforce/current/act-2020-007#sec.93.

Second Reading Speech by Mr Damien Tudehope (Minister for Finance and Small Business) dated 2 June 2020, Legislative Council Hansard, 2 June 2020, page 67.

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