How we audit design and building practitioners

Practitioners will typically be contacted by an authorised officer regarding the commencement of an audit through email and requesting information to be provided within two (2) weeks.

The focus of an audit is the registered design practitioner and their compliance obligation under the Act. However, the audit team may choose to focus on a particular project, or projects, undertaken by the practitioner or particular aspects of their regulated work.

As there are obligations under the Act for practitioners to lodge information regarding building designs on the NSW Planning Portal, authorised officers will retrieve information regarding the building project from the Planning Portal where possible.

The authorised officer may request additional information from the registered practitioners throughout the audit process.

If further information or documentation is required, the authorised officer may issue a written notice requesting the practitioner to provide such information, as well as answers to certain queries from the authorised officer.

• This written notice may specify the manner in which the information or records required must be provided, and when they must be provided by.
• A written notice requesting answers may also specify the time and place where attendance is required in order for questions to be properly put and answered.

Authorised officers may check if construction on a building has commenced. This is because building practitioners must have designs and declarations prior to carrying out work.

Designs must be declared and lodged on the Planning Portal before building work begins on a construction certificate or complying development certificate.

When checking if construction has commenced, authorised officers will need to consider whether the building work covered by a specific Construction Certificate or Complying Development Certificate has commenced before designs have been lodged.

Under section 9 of the Act, registered design practitioners must provide a design compliance declaration, and where appropriate (for example, when variations occur), a further design compliance declaration, to any person that they provide regulated design work for, including the building practitioner for that development.

Failure to declare such design compliance documents may result in a penalty of up to $165,000 (for body corporates) or $55,000 (in any other case).

Even though a design practitioner must provide declarations, it is the duty of the building practitioner to lodge the declaration with Fair Trading via the Planning Portal.

Failure to lodge declared designs is an offence which carries a penalty of up to $33,000 (for body corporates) or $11,000 (in any other case).

A design practitioner who declares or lodges documents must be registered and appropriately authorised to do so under the Act.

A design practitioner who makes a design compliance declaration without being registered or appropriately authorised may, under s10 of the Act, face a penalty of up to $165,000 (for body corporates) or $55,000 (in any other case).

Principal design practitioners must also be registered as a principal design practitioner before making a principal compliance declaration.

A principal design practitioner who makes a design compliance declaration without being registered or appropriately authorised may, under s13 of the Act, face a penalty of up to $165,000 (for body corporates) or $55,000 (in any other case) may apply.

While authorised officers should check this as part of any audit, the NSW Planning Portal includes a digital worker which will  confirm that the registration number put into the standard title block on every regulated design corresponds with a registered person.

A registered design practitioner must be adequately indemnified with respect to their work. Registered practitioners must only make a design compliance declaration, prepare regulated designs, or hold out that they are adequately insured with respect to the provision of the declaration of the work, if they are indemnified.

If a design practitioner who is not indemnified engages in such conduct, they may be subject to a penalty of up to $33,000 (for body corporates) or $11,000 (in any other case).

Authorised officers may request a copy of engagement contracts for design practitioners to note if these contracts take into account practitioner obligations to comply with the Act.

The Model Clauses for Engagement of Design Consultants (see Appendix 2) [PDF] provides guidance to developers regarding the inclusion of contract provisions to account for the requirements of the Act.

Authorised officers may assess whether a lodged declaration complies with the requirements of the Act. Matters for examination may include:

1. Whether the basic requirements of the Development Application, Construction Certificate or Complying Development Consent have been reflected in the design work;
2. Whether there is sufficient detail in the lodged designs or specifications for construction to occur;
3. Where performance solutions exist, whether all information required by the Act has been provided;
4. Whether sufficient information has been provided by the lodged declaration or documentation, to confirm the validity of the practitioner’s declaration of compliance with the Building Code of Australia;
5. Whether the lodged documentation indicates the process followed for each element to take into account designs of others (design integration); and
6. Whether the lodged declaration or documentation indicates that the practitioner has acted in a way which falls short of the standard of competence, diligence, and integrity that the public would expect of a reasonably competent design practitioner.

In examining these matters, the authorised officer may refer specific questions to an external technical expert, chosen from a panel of pre-qualified experts, for further technical advice. This advice will be considered by the authorised officer.

Design practitioners will be contacted regarding technical questions, compliance issues or other outcomes within 28 days of an audit.

There are a range of possible compliance and audit tools available to the regulator under the Act. Their use will depend on whether compliance issues are identified during the audit, and also on factors such as the nature of any non-compliance, the risk posed by the non-compliance.

The tools are as follows:

1. No further action
2. Education – this may include clarification of legislative requirements or a referral to specific training
3. Written Warning – a letter formally noting the non-compliance
4. Penalty Infringement Notice (section 94) – imposition of a fine for an identified offence
5. Prosecution – if significant offences have been identified
6. Undertaking (section 88) – agreement to take action to rectify an identified compliance issue
7. Stop Work order (section 89) – where non-compliant design work has been identified and needs to be stopped
8. Referral to another Fair Trading division for further consideration.

Annual reporting

Following the conclusion of an audit program, we will provide an annual report which provides information and findings from the program conducted that year. This will promote transparency about the audit process. The report will include:

• the number of audits;
• the subject of audits (high risk practitioners, high risk work); and
• the results of audits in terms of findings and action taken in response to findings.

Recording of enforcement actions

We maintain a register of registered design practitioners (Section 89 of the Act and clause 89 of the Regulation). The register records details, such as:

1. disciplinary action taken against the practitioner
2. offences for which the practitioner has been convicted
3. undertakings provided by the practitioner, and
4. warning notices published relating to the practitioner.

Warning notice and your rights

Fair Trading may publish a warning notice which informs the public of particular risks in dealing with certain design practitioners, formerly or currently registered. However, the affected design practitioner will be given at least 2 business days to make representations to Fair Trading about the publication of the warning notice.

Industry, co-regulator and community feedback, and, continuous improvement

Data collected from the audit program will be used to develop education strategies and courses to improve industry practice.

Audit program findings will also be used as case studies to communicate the consequences of contraventions and breaches to industry and the community.

Where a professional engineering body is undertaking recognition or registration processes under the DBP scheme, information relating to their members may also be shared to inform their work to improve the quality of work by engineers.

Practitioners will typically be contacted by an authorised officer regarding the commencement of an audit through email and requesting information to be provided within two (2) weeks.

The focus of an audit is the registered building practitioner and their compliance obligations under the Act. However, the audit team may choose to focus on a particular project, or projects, undertaken by the building practitioner or particular aspects of their regulated work.

As there are obligations under the Act for building practitioners to lodge information relating to building work on the NSW Planning Portal, authorised officers will retrieve information regarding the building project, or projects, from the Planning Portal where possible. The authorised officer may also retrieve relevant information from Fair Trading’s CertAbility platform.

The authorised officer may request additional information from the registered building practitioner throughout the audit process.

If further information or documentation is required, the authorised officer may issue a written notice requesting the building practitioner to provide such information, as well as answers to certain queries from the authorised officer.

This written notice may specify the manner in which the information or records required must be provided, and when they must be provided by. A written notice requesting answers may also specify the time and place where attendance is required in order for questions to be properly put and answered.

A building practitioner who provides a building compliance declaration or performs any related building work must be registered and appropriately authorised to do so under the Act.

Failure to do so may, under section 23 of the Act, attract a penalty of up to $165,000 (for body corporates) or $55,000 (in any other case).

A registered building practitioner must be adequately indemnified for their building compliance declaration, their building work, and to make representations regarding their indemnification. They are indemnified if they hold insurance that complies with certain requirements under the legislation (see section 24 and section 30 of the Act and clause 75 of the Regulation).

If a building practitioner who is not indemnified engages in such conduct, they may be subject to a penalty of up to $33,000 (for body corporates) or $11,000 (in any other case) pursuant to section 24 of the Act.

Registered building practitioners are exempt from professional indemnity insurance requirements until 30 June 2024.

A registered building practitioner must provide a ground anchor installation right document prior to commencing any building work involving an encroaching ground anchor.

Under clause 28B of the Regulation, different details need to be provided by a building practitioner for temporary and removeable encroaching ground anchors.

If the ground anchor is a temporary encroaching ground anchor, a building practitioner must provide a document that details the process for destressing the anchor and the time the destressing process will occur.

If the ground anchor is a removeable encroaching ground anchor, a building practitioner must provide a document that details the process for the removal of the removeable reinforcement tendon and the time the removal will occur.

Failure to comply with these requirements may be subject to a penalty of up to $22,000 (for body corporates) or $11,000 (in any other case).

Under the Act, building practitioners must ensure that a design compliance declaration is obtained from a registered design practitioner for each regulated design for building work. Failure to do so may be subject to a penalty of up to $330,000 (for body corporates) or $110,000 (in any other case).

The construction issued regulated designs and design compliance declarations are to be obtained and lodged by the building practitioner on the Planning Portal before building work begins on a construction certificate (CC) or complying development certificate (CDC). Failure to do so may be subject to a penalty of up to $22,000 (for body corporates) or $11,000 (in any other case).

If a building practitioner carries out building work without first obtaining the construction issued regulated designs and a design compliance declaration for each of those regulated designs, they may be subject to an additional penalty of up to $165,000 (for body corporates) or $55,000 (in any other case).

Authorised officers may check if construction of building work covered by a specific CC or CDC has commenced.

See section 18 and section 19 of the Act and clause 16 of the Regulation.

Under clause 23 of the Regulation, a building practitioner must give written notice to an appointed principal design practitioner 14 days prior to the commencement of any building work.

Failure to do so may be subject to a penalty of $22,000 (for body corporates) or $11,000 (in any other case).

Under section 20 of the Act, any variation that occurs after the commencement of building, which is unrelated to a building element or performance solution, must be recorded by a registered building practitioner in a variation statement. Clause 27 of the Regulation sets out that the variation statement prepared by a building practitioner must include:

1. the type and purpose of the variation,
2. the part of the building to which the variation relates,
3. an explanation of how the variation complies with the Building Code of Australia (including a list of applicable provisions),
4. a list of other standards or codes that have been applied in carrying out the variation.

A building practitioner must also ensure that any variation that relates to a building element or performance solution, or that requires a new building element or performance solution, is captured in a design prepared and declared by a registered design practitioner before the varied building work commences.

If a building practitioner does not comply with the variation requirements set out in section 20 of the Act, they may be subject to a penalty of up to $330,000 (for body corporates) or $110,000 (in any other case).

Under clause 17 of the Regulation, a building practitioner must lodge any prescribed variation documentation with the Secretary (via the Planning Portal) within 1 day of the building work commencing on the variation.

Failure to lodge variation documentation without a valid reason within the designated time frame may be subject to a penalty of up to $22,000 (for body corporates) or $11,000 (in any other case).

Under clause 24 of the Regulation, a building practitioner must give written notice to an appointed principal design practitioner about their intention to make a building compliance declaration, 14 days prior to the intended declaration.

Failure to do so may be subject to a penalty of up to $22,000 (for body corporates) or $11,000 (in any other case).

Under clause 25 of the Regulation, if a registered building practitioner is applying for an occupation certificate (‘OC’), then the building practitioner must notify other registered building practitioners, who worked on a building subject to the OC, about the intention to submit an OC application.

Under clause 28C of the Regulation, a building practitioner must provide evidence to the Secretary (via the Planning Portal) that the temporary encroaching ground anchors have been destressed.

If the development does not require an OC, this evidence is to be provided before the development is completed. If an OC is required, a building practitioner must provide the evidence before an OC application is submitted.

Failure to produce the required evidence may be subject to a penalty of up to $22,000 (for body corporates) or $11,000 (in any other case).

Under clause 18 of the Regulation, a building practitioner must provide to the Secretary (via the Planning Portal) a building compliance declaration, contractor document and other required documents before an OC application is submitted. The other required documents include:

1. variation statements that are required for building work,
2. each regulated design that contains additional details not reflected in the construction issued regulated design (but only if details do not cause the building work to which the design relates to be varied),
3. a principal compliance declaration if a principal design practitioner has been appointed for the development.

Section 17 of the Act also requires a building practitioner to provide the same documents to any person for whom the building work was done before an OC application is submitted.

Failure to provide the prescribed documents may be subject to a penalty of up to $165,000 (for body corporates) or $55,000 (in any other case).

Note, however, that section 27 of the Act requires a principal certifier to check that all compliance declarations have been lodged and consider declarations of non-compliance prior to issuing a certificate.

A building practitioner must provide to the Secretary (via the Planning Portal) all relevant documents (e.g., regulated designs and works as executed), a building compliance declaration, contractor document, and other required documents within 90 days after the OC is issued. They do not need to do this if the necessary documents were lodged prior to the OC application and there has been no subsequent changes in documentation.

Failure to provide the prescribed documents may be subject to a penalty of up to $33,000 (for body corporates) or $11,000 (in any other case).

See section 15 of the Act and clause 19 and clause 26 of the Regulation.

A building practitioner must provide to the Secretary (via the Planning Portal) and to any person for whom the building work was done, a building compliance declaration for building work, contractor document and other required documents within 7 days of completing “other building work”. This only applies to building work that does not require an OC.

Failure to provide the prescribed documents may be subject to a penalty of up to $165,000 (for body corporates) or $55,000 (in any other case).

See section 17 of the Act and clause 19A of the Regulation.

Under clause 84 of the Regulation, a building practitioner must comply with record keeping requirements. Records must be kept securely for a minimum of 10 years (from the completion date of building work) in a form that can be readily inspected. These requirements continue to apply even if a building practitioner ceases to be registered.

Failure to comply with the record keeping requirements may be subject to a penalty of up to $22,000 (for body corporates) or $11,000 (in any other case).

Under clause 85 of the Regulation, a building practitioner must (for each year to which the building practitioner’s registration relates), keep a record of all declarations issued by the building practitioner for each project for building work. The record must include the following project information:

1. the number of compliance declarations provided by the practitioner,
2. the class of building,
3. the name of the developer in relation to the work (including any person authorised to carry out work on behalf of the developer and the developer’s place of business),
4. the name of the local government area in which the project is located,
5. the address of the land or premises on which the project is located (including the lot and deposited plan number),
6. the name of the person who engaged the practitioner,
7. the name of the owner of the land or premises,
8. the name and registration number of other registered practitioners involved in the project.

Under clause 88 of the Regulation, a building practitioner must also keep copy of:

1. a relevant document within the meaning of section 15(4) of the Act,
2. a written notice given to the building practitioner under section 16 of the Act,
3. a building compliance declaration, contractor document and other required documents required under section 17 of the Act,
4. a document required to be obtained by the building practitioner under sections 18(b), 18(c), 19, 20(2)(c) and 20(2)(d), 20(3)(c) and 20(3)(d) and 21 of the Act,
5. a variation statement prepared by the building practitioner for the purposes of section 20(1) of the Act.

An authorised officer will assess the building compliance declaration provided by a building practitioner. This will involve checking:

• that the building practitioner has taken all reasonable steps to build in accordance with the lodged construction issued regulated designs (section 21 of the Act),
• that the building practitioner has taken all reasonable steps to ensure that the building work complies with the Building Code of Australia (section 22 of the Act).

If a building practitioner provides a building compliance declaration that sets out steps required to achieve compliance with the Building Code of Australia and other requirements (Section 22 of the Act), they must give written notice of the steps to the principal certifier.

Failure to comply with the building compliance declaration requirements set out in section 21 and section 22 of the Act, may be subject to a penalty of up to $330,000 (for body corporates) or $110,000 (in any other case).

Building practitioners will be contacted regarding technical questions, compliance issues or other outcomes within 28 days of the audit.

There are a range of possible compliance and audit tools available to the Regulator under the Act. Their use will depend on whether compliance issues are identified during the audit, and also on factors such as the nature of any non-compliance, and the risk posed by any non-compliance.

The tools are as follows:

1. No further action
2. Education – this may include clarification of legislative requirements or a referral to specific training
3. Written Warning – a letter formally noting the non-compliance
4. Penalty Infringement Notice (section 94) – imposition of a fine for an identified offence
5. Prosecution – if significant offences have been identified
6. Undertaking (section 88) – agreement to take action to rectify an identified compliance issue
7. Stop Work order (section 89) – where non-compliant building work has been identified and needs to be stopped
8. Referral to another Fair Trading division for further consideration (e.g., Registration Team)

Annual reporting

Following the conclusion of an audit program, we will provide an annual report which provides information and findings from the program conducted that year. This will promote transparency about the audit process. The report will include:

• the number of audits;
• the subject of audits (high risk practitioners, high risk work); and
• the results of audits in terms of findings and action taken in response to findings.

Recording of enforcement actions

We maintain a register of registered design practitioners (Section 89 of the Act and clause 89 of the Regulation). The register records details, such as:

1. disciplinary action taken against the practitioner
2. offences for which the practitioner has been convicted
3. undertakings provided by the practitioner, and
4. warning notices published relating to the practitioner.

Warning notice and your rights

Fair Trading may publish a warning notice which informs the public of particular risks in dealing with certain design practitioners, formerly or currently registered. However, the affected design practitioner will be given at least 2 business days to make representations to Fair Trading about the publication of the warning notice.

Industry, co-regulator and community feedback, and, continuous improvement

Data collected from the audit program will be used to develop education strategies and courses to improve industry practice.

Audit program findings will also be used as case studies to communicate the consequences of contraventions and breaches to industry and the community.

Where a professional engineering body is undertaking recognition or registration processes under the DBP scheme, information relating to their members may also be shared to inform their work to improve the quality of work by engineers.