The New South Wales Government has recently introduced three new bills and one accompanying regulation which aims to improve the standards and accountability of participants in the construction industry within the state. The bills, which are currently in the consultation phase until 25 November of this year, are the:
The proposed legislation aims to restore the public’s confidence in the building industry, and seeks to improve consumer protection, whether for large, small, commercial or residential projects.
These bills will repeal existing legislation, create new obligations, and broaden liability for builders, developers and other people involved in the building process with the intention of creating ‘end to end accountability’ for building work in NSW.
The most significant changes stem from the proposed Building Bill 2022. This bill, which will repeal and replace the current Home Building Act 1989 (NSW), is the result of five industry roundtables, two focus groups and two written submission processes. It will regulate both the residential and commercial construction industry including, among other things, the:
As the name would suggest, this bill intends to fuse the various NSW construction compliance and enforcement legislation into one consolidated framework. It will also repeal and replace the recent Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW).
The bill’s central intention is to create greater enforcement powers for industry regulators including investigative powers granted to NSW Fair Trading and for the Building Commissioner to make rectification and stop-work orders to aged care premises and residential buildings (in addition to apartment buildings, which are already regulated).
The proposed legislation will create powers that grant further ability for regulators to ‘pierce the corporate veil’. Effectively, this will mean that a company’s director, in certain circumstances (for example, failing to comply with an undertaking or rectification order), can be held personally liable for the actions of the company if the director knows the offence is being committed (or is recklessly indifferent) and did not take all reasonable steps to prevent or stop the offence being committed.
Finally, this bill and regulation aims to strengthen the laws which currently regulate the building and construction industry, including amending:
Interested parties are invited to make submissions on the proposed bills up until Friday, 25 November 2022, by completing a survey or submitting more detailed written submissions via the links on the NSW government website here.
The proposed reforms, assuming the Bills are passed, will fundamentally change the existing systems of regulation of the building industry in New South Wales. We will provide further separate detailed updates regarding the new obligations sought to be imposed under each separate Bill.
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Matthew Taylor, Partner
Del Chin, Senior Associate
Ryan James, Lawyer