In NSW, the DBP Act is about to extend to the commercial sector, encompassing projects involving hotels and aged care facilities

23 May 2023
Matthew Taylor, Partner, Sydney

In 2020, the New South Wales Government introduced the Design and Building Practitioners Act 2020 (NSW) (DBP Act) and the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (RAB Act) as part of long-awaited reforms aimed at improving the standard of construction work in NSW and restoring public confidence in the industry.

From 3 July 2023, the reach of the DBP Act and RAB Act will extend beyond residential apartment buildings (class 2 buildings) to encompass class 3 buildings (for example hotels and hostels) and class 9c buildings (for example aged care homes).

There are further changes from 3 July 2023 that will insert a new definition of ‘construction issued regulated design’ and make the DBP Act and DBP Regulation obligations apply in respect of each construction certificate.

What are Class 3 and 9c Buildings?

Class 3 buildings serve as a frequently-occupied living space for multiple unrelated individuals, whether for a long or short duration. These include boarding houses, hostels (larger than those under class 1b), group homes and ‘care-type’ facilities which do not fall under class 9c.

Class 9c buildings are residential structures that are specifically designed to provide care for individuals with varying levels of need. For instance, an aged care building that provides personal care services to residents is classified as a Class 9c building. In general, Class 9c buildings are intended to cater to the unique care requirements of their residents.

A link to the BCA classes of buildings is included here: Part A6 of the BCA (Building Classification)

The 3 July 2023 Changes

It is important to note that the 3 July 2023 changes do not alter the Part 4 – Duty of Care obligations under the DBP Act which have been held to apply to essentially any building whatsoever, be it residential or commercial, including ‘boarding houses’.[1]

In contrast, the remaining parts of the DBP Act concerning registration, training, design and building compliance declarations and enforcement have only applied to Class 2 buildings (high rise residential apartment buildings).

The Building Legislation Amendment (Building Classes) Regulation 2023 amends the Design and Building Practitioners Regulation 2021 to extend the section 4(1) definition of ‘building work’ to class 3 or 9c buildings.

What this means is that for any projects involving class 3 or class 9c buildings, all building work that has not commenced by 3 July 2023, will be subject to the requirements of the DBP Act including:

  1. the requirement of design practitioners, building practitioners and professional engineers to be registered under the DBP Act to complete certain work on class 3 and 9c buildings;
  2. designs will need to be declared for compliance with the Building Code of Australia and lodged on the NSW Planning Portal before building work can start;
  3. builders must construct according to declared designs; and
  4. developers must provide notice before the completion of work for these buildings, including paying the required levy (under the RAB Act changes).

These changes will only apply to the construction of a new Class 3 or Class 9c building. In relation to the alteration or renovation of an existing Class 3 or Class 9c building, building practitioners will not be subject to the DBP Act or RAB Act requirements until 1 July 2024.

What if construction work has already started?

If work has already commenced on site under a development certificate prior to the 3 July 2023 cut-off date, the changes under the DBP Act will not apply to the work that is relevant to that certificate.

The designs will however be required to be uploaded to the NSW Planning Portal.

However, if designs for a project have been prepared, but construction of the project has not begun prior to 3 July 2023 (and the works are subject to a new building), then the changes will be applicable to that project.

This may cause some issues for current developments of class 3 or class 9c buildings where:

  • designs have been completed but a construction certificate has not been issued; or
  • there is a staged contract and some stages have had construction certificates issued while other stages have not (and will not, prior to 3 July 2023).

In the above scenarios, the effect of the changes to the DBP Act and the RAB Act will apply to that construction certificate, notwithstanding that the contract might have been executed many months (or perhaps years) ago.

Head contractors on such projects will now be subjected to more onerous requirements, for example all design building practitioners will need to be registered, relevant insurance will need to be procured, and the ongoing costs (and time) of administering the Act requirements will need to be met.  There are implications in such contracts for head contractors to be exposed to increased costs and potential delays in adhering to the administration/process requirements of the new regime. Whether further claims by Contractors in such scenarios will eventuate remains to be seen.  It may again provide fertile ground for disputes as to which party has the risk for the time and costs in complying the new legislative requirements.  Developers and contractors currently negotiating contracts involving class 3 or class 9c buildings should consider how best to allocate the time and cost risk of the DBP Act and RAB Act obligations.

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Authored by:

Matthew Taylor, Partner
Ryan James, Lawyer

[1] Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

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