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Building Defects – Are there any proposed reforms that I need to be aware of?

Posted 20 May 2024

Category: Building Defects, eBooks

After years of rising concern about declining standards of residential property construction and narrowing of options available to strata owners corporations and lot owners in defective buildings, the NSW Government has passed reform legislation, the Design and Building Practitioners Act 2020 (NSW) (“DBP Act”).

Some of the DBP Act commenced on 11 June 2020, we draw your attention to Part 4, which imposes a new statutory duty of care on builders and certain designers, manufacturers, suppliers and supervisors. This is a duty of care owed to current and future owners to avoid economic loss caused by defects in respect of certain buildings. The rest of the DBP Act is scheduled to commence later in 2021.

Under the DBP Act, specified parties owe a duty to current and future owners “to exercise reasonable care to avoid economic loss caused by defects … in or related toa building for which the work is done and arising from the construction work”.

The duty of care extends retrospectively to when the economic loss first became apparent within the 10 years before or after June 2020 and extends liability to persons carrying out construction work, designers, manufacturers & suppliers of building products and supervisors, coordinators and project managers of construction work.

On 1 September 2020 the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (“Residential Apartments Act”) commenced. In conjunction with the existing NSW Home Building Act 1989, these legislative instruments hope to create a more consumer friendly construction industry, and thus avoid high rise defect disasters such as Opal Towers and Mascot Towers.

Whilst the DBP Act takes the big stick to building professionals in terms of processes and penalties, and the Residential Apartments Act does the same for developers, it seems that certifiers of building quality have escaped regulatory reform.

Under the Residential Apartments Act, the NSW Building Commissioner and his team, can be delegated by the Secretary of Consumer Affairs to enter building sites, inspect works and require the production of documents, if not satisfied those delegated may issue stop work orders or rectification orders.

Given the above, Bannermans Lawyers suggest lot owners and owners corporations with defects need to take legal advice about whether they may have claims under the recent reforms, even if they would previously have been out of time to pursue claims.

These issues are further explored in Bannermans Lawyers articles:

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This is an extract from our Bannermans Building Defects Handbook.

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Bannermans Lawyers

Published 20 May 2024