CertAlert issue 1: December 2017

2017 has been a challenging year for certifiers, developers, owners and the building industry.

Certifiers have been challenged by demands arising from non-conforming building materials, proposed changes in the regulatory and insurance environments and increasing expectations about what certifiers should deliver. The Board is working with certifiers to ensure that they are able to meet these challenges. Read about current industry consultation and how you can have your say in the story below.

Certifiers will continue to encounter changes in 2018 and these will include:

  • a replacement for the Building Professionals Act 2005 (NSW) (consultation about the new Bill will likely commence in March 2018, so keep an eye out for opportunities to comment)
  • the requirement to collect and report specified data about the developments they certify – a voluntary reporting phase will commence in January 2018 and the mandatory reporting date will be announced shortly; get ahead of the process by refreshing your knowledge of the issues and read more on the Board’s website.

Also, a practice guide will be issued early next year to help certifiers better understand their role as public officials and to increase their confidence in performing this important role.

The Board’s focus in 2018 will be on supporting certifiers through the changes they face, whilst ensuring that they are regulated in a manner that inspires public confidence in accredited certifiers.

The Board’s office will be closed from Monday 25 December 2017 and will reopen on Monday 8 January 2018.

Seasons Greetings from the Building Professionals Board.

Industry consultation sessions and survey

We were delighted to meet with approximately 100 private certifiers and representatives from building industry associations during the last 2 weeks, for the first of our stakeholder consultation sessions.

Further sessions will be held in February 2018 in Parramatta, Wollongong, Newcastle and Orange. We look forward to meeting as many of you as possible at those sessions. For those who cannot attend, a webinar will be available on 20 February (certifiers will receive the registration link soon). CPD points will be offered for certifier attendance.

In readiness for these sessions, you’ll soon be invited to complete an anonymous 5-minute online survey.  Survey results will be used to tailor the February consultation sessions to best meet audience needs, so make sure you have your say. The survey link will be provided soon.

EP&A Act amendments passed Parliament

The Environmental Planning and Assessment (EP&A) Amendment Bill passed Parliament on 15 November 2017. Part 6, which consolidates and revises provisions related to building and subdivision certification, is proposed to be administered by the Minister for Innovation and Better Regulation. The biggest changes for certifiers are summarised on our website; for more information visit the NSW Parliament website and read the Minister for Planning’s media release.

Reforms related to fire safety and external wall cladding

Shortly after the Grenfell Tower fire tragedy, the NSW Government announced a wide-ranging fire safety package in response to the fire safety risks posed by external wall cladding. A number of priorities are currently being progressed by the government. These are outlined on the Fire safety and external wall cladding page.

Proposed reforms to improve fire safety checks

A package of proposed reforms is currently on exhibition to improve fire safety checks of buildings.

NSW Planning are seeking your feedback on the cladding reform by Friday 16 February 2017. The reform includes two elements:

  • A draft regulation aiming to reduce risks around the use of combustible external wall cladding
  • An Explanation of Intended Effect which will limit the use of combustible cladding as exempt development.

Find out more on the NSW Planning website.

New legislation for non-conforming building products

The Building Products (Safety) Act 2017 commenced on 18 December 2017.

This Act gives Fair Trading powers to prevent the use of certain building products that are deemed to pose a safety risk. To ensure that all unsafe building products are captured, a ban will be able to outline a specific use or all uses of a particular building product. Authorised officers will have new investigative and assessment powers to help them identify any unsafe uses of a building product.

Builders, building product suppliers, manufacturers and importers can be compelled to produce their records so dangerous building products can be tracked and pinpointed. It also gives councils greater powers to order that affected buildings be rectified. More information is on the NSW Fair Trading website.

Practice advice

1. Received a CDC application? Notify council, not just neighbours

Private certifiers who receive an application for a complying development certificate (CDC) must, in most areas, notify the local council of the application at least 14 days before determining it. Further, certifiers must also notify occupants of dwellings within 20m of the property.

Notifying the council is required by clause 130AB(2)(b) of the EP&A Regulation 2000.

It is not acceptable to just send the notification when the CDC is issued.

The 14-day notification gives the council opportunity to let the certifier know of any important issues related to the application. For example, the council may have issued an order or become aware of unauthorised commencement of works.

2. Issuing a valid CC: Building work starts well before concrete is poured

Under section 109F(1A) of the EP&A Act, a construction certificate (CC) has no effect if it is issued after building work has physically commenced.

The definition of ‘building work’ under section 4 of the EP&A Act means any physical activity involved in the erection of a building. ‘Building’ is similarly broadly defined as including a part of a building, any structure or part of a structure, including temporary structures.

Pouring concrete is not the first physical activity in the building process. Earlier activity may include but is not limited to site grading, excavation, cutting trenches, installing formwork and steel reinforcement and placing plumbing lines.

Certifiers need to consider the full scope of ‘building work’ when assessing an application for a CC.

Also be aware that section 81A of the EP&A Act places notification obligations on the principal certifying authority (PCA) and the owner/developer to be met at least two days before building work begins.

3. Final OC inspection: check the whole development

Scenario: The PCA for a new house and pool inspected the work, finding the pool barrier compliant but that minor changes were needed to the house. An interim occupation certificate (OC) was issued for the pool and part of the house.

When reinspecting the work to issue a final OC, the PCA checked the house but did not reinspect the pool barrier. The final OC was issued for the entire development, including the house and pool.

Comment: When carrying out a final inspection, look at the entire development, not just any non-compliances identified earlier.

Changes could have occurred on the site which could make previously compliant structures non-compliant at the time of the final inspection.

In the scenario above, the certifier could have issued the final OC just for the house. The interim OC which was already in place was sufficient for the pool, which the certifier had already deemed compliant. Limiting the scope of the final OC would have reduced the certifier’s liability.

No evidence of insurance = accreditation suspension

The Board recently notified four certifiers of its intention to suspend their accreditation unless they provided evidence of holding professional indemnity insurance.

Practising without insurance represents a significant risk to a certifier’s clients and the wider community, and can undermine public confidence in private certifiers. Certifiers also risk their own livelihood and assets if they don’t maintain insurance covering their statutory liability for their whole period of accreditation.

The BP Act requires certifiers to provide evidence to the Board that they have obtained further insurance seven days before their current insurance expires. Failure to do so carries a fine of up to $5,500.

The Board has commenced an audit of whether certifiers have provided evidence of further insurance. If our records show a certifier’s insurance has expired, we will email the certifier requesting an insurance certificate of currency within 7 days.

So far, the Board has notified 144 certifiers and 140 have provided the required certificate. The four certifiers who have not, despite subsequent reminders from the Board, now face the likelihood that their accreditation will be suspended.

Read more about insurance requirements for certifiers.

Liability period – court helps clarify s.109ZK

Dino Dinov v Allianz Australia Insurance Limited [2017] NSWCA 270

A recent decision by the Court of Appeal has helped clarify how courts will interpret which claims are subject to the 10 year limitation period prescribed by section 109ZK of the EP&A Act.

Where a claimant and defendant are both ‘participants in the building industry’ and the claim directly relates to that participation, they are likely subject to the 10 year limitation, regardless of how the claim is framed.
The outcome of Dinov v Allianz means that:
* the scope of ‘building action’ under s.109ZK is to be determined case-by-case with reference to the purpose of the legislation
* the 10 year limitation period is intended to protect participants in the building industry
* where both parties are participants in the building industry, contract indemnities will likely also be subject to the 10-year limitation period.

More information: Dino Dinov v Allianz Australia Insurance Limited [2017] NSWCA 270

The Department of Finance, Services and Innovation to administer swimming pool legislation from 1 January 2018

The Department of Finance, Services and Innovation (DFSI) is scheduled to administer the Swimming Pools Act 1992 and Swimming Pools Regulation 2008 from 1 January 2018. Further information will be available soon.  From 1 January 2018 please email spoolr@finance.nsw.gov.au for matters relating to swimming pool regulation.

National action on building compliance

compliance icon The national Building Ministers' Forum has commissioned independent experts to assess the broad compliance issues affecting the construction industry, and to consider a best practice model for implementing the National Construction Code.

Read the terms of reference (PDF 11 kB)

NCC seminar registration open

Registrations are open for National Construction Code (NCC) information seminars to be held in February and March 2018.

Reminders for your diary

Strata building bond and inspections scheme commences 1 January 2018: The new strata building bond and inspections scheme will commence on 1 January 2018.

Home building compensation to change in 2018: In early 2018, reforms to the home building compensation scheme will commence and private providers will be invited to apply to join the market. The State Insurance Regulatory Authority website has more information.

BASIX transitional arrangements: BASIX energy targets for houses and units increased on 1 July 2017 and transitional arrangements apply. The Department of Planning and Environment has issued guidance for certifiers and councils on the BASIX transitional arrangements.