December 1, 2020

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Beauty Made Perfect

Residential Focus: RAB Act and In the media, practice and courts, cases and legislation – Real Estate and Construction


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Building Commissioner makes first prohibition order
under the Residential Apartment Buildings (Compliance and
Enforcement Powers) Act

Regular readers will recall our previous discussion on the
Residential Apartment Buildings (Compliance and Enforcement Powers)
Act 2020 (RAB Act), which has been in force since
1 September 2020, in our 
June

August
 or 
September
 article, or at one of our webinars.

The RAB Act gives the Building Commissioner power to (among
other things) prevent the issuing of occupation certificates or the
registration of a strata plan for residential apartment buildings
where certain requirements are not met or if there is a serious
defect.

A prohibition order “is the ultimate signal to the
developer that they must resolve any noncompliance or face never
having the building sold or occupied”.

Orders made under the RAB Act are listed on a 
public register
 on the NSW Fair Trading website and the
Building Commissioner has lost no time in flexing his new powers,
with the public register showing a Prohibition Order and a Building
Work Rectification Order, each issued in late September in relation
to a project in Caringbah South.

Grounds

Compliance officers conducted an inspection of the residential
apartment building in question on 14 September 2020. During the
inspection, it was observed that building work carried out had
resulted in serious defects in relation to three elements,
namely:

  • cladding, in relation to cavity masonry and masonry veneer
    construction adjoining the ground floor podium structural concrete
    slab

  • waterproofing, at the external ground floor podium structural
    concrete slab, including terraces and planter boxes

  • installation of the elevator, which provided access from the
    basement level car park directly into residential lots.

Under section 9 of the RAB Act, the Building Commissioner may
make an order prohibiting the issue of an occupation certificate or
the registration of a strata plan for a residential apartment
building if he is satisfied that serious defects exist in the
building.

Under section 33 of the RAB Act, if the Building Commissioner
has a reasonable belief that building work was or is being carried
out in a matter that could result in a serious defect, a building
work rectification order may be issued, requiring a developer to
carry out or refrain from carrying out building work as specified
in the order, to eliminate, minimise or remediate the serious
defect or potential serious defect. The Building Work Rectification
Order (BWRO) issued by the Building Commissioner
on 30 September 2020 was issued in relation to the cladding and
waterproofing defects only.

Nature of serious defects

A ‘serious defect’ is defined in section 3 of the RAB
Act to include the following (among other things):

  • a defect in a building element attributable to a failure to
    comply with the performance requirements of the Building Code of
    Australia (BCA) or the relevant Australian
    Standards (AS); or

  • a defect in a building product or building element that is
    attributable to defective design, defective or faulty workmanship
    or defective materials, that causes or is likely to cause the
    inability to inhabit or use the building (or part thereof) for its
    intended purpose, or the destruction of the building or any part of
    the building.

In relation to the cladding, the compliance officers found no
evidence of cavity flashing discharging from the wall to turn down
and over the waterproofing membrane at the planters and adjoining
the entire ground floor podium slab area during their inspection.
This absence prevents the continuity of the flashing and waterproof
membrane installation. The Prohibition Order (PO)
indicated that the building work constituted a serious defect due
to a failure to comply with the performance requirements of clause
2 of AS 4654.2 and that the defect was attributable to either
defective design or defective workmanship, which caused or was
likely to cause the inability to inhabit or use the building for
its intended purpose or the destruction of the building.

The compliance officers found that insufficient heights for
termination of the planter and podium waterproofing had been
allowed on the external ground floor podium structural concrete
slab including terraces and planter boxes. This was found to
constitute a serious defect for the same reasons as the
cladding.

In relation to the elevator, the compliance officers observed
the unpacking, preparation and component assembly for the elevator
installations. The developer, however, was unable to provide
clarification of details and the personnel carrying out the work
were not elevator installation technicians. A week later, a notice
was issued requesting further information relating to the design,
certification and installation of the elevators. The information
had not been received in its entirety by the date of the PO. The
elevator installation was found to be a serious defect due to its
failure to comply with the BCA, and the defect was attributable to
either defective design or defective workmanship, which caused or
was likely to cause the inability to inhabit or use the building
for its intended purpose or the destruction of the building.

The PO remains in force until revoked by the Building
Commissioner or Secretary. Under the BWRO, the developer was
ordered to remediate the cladding and waterproofing defects within
28 days and to notify within two business days of completion. The
BWRO remains in force until either complied with or revoked by the
Building Commissioner or Secretary.

Be warned

This first suite of orders sends a message that the Building
Commissioner is willing to exercise, and has shown no hesitation in
exercising his new powers. In doing so, it is clear that audit
inspections will encompass not just an examination of work carried
out but also extend to irregularities observed on site in work in
progress. The nature of the defects subject of the BWRO
confirm that the potential for water penetration in its various
forms is one of the main areas of focus in the audit process.

This is a level of regulatory oversight not before seen in the
NSW building industry.

Authors: 
Christine Jones
 & Rebecca Weakley

In the media

HomeBuilder scheme: construction industry warns of
‘bust’ if program isn’t extended
The scheme has a looming December 31 end date everywhere
except Victoria, forcing some builders to turn potential customers
away to meet their obligations with current clients who have signed
contracts. Victorians have a three-month extension given the
strict, stage four lockdown (02 October 2020).  
More…

Helping Builders and Tradies Staring Down Barrel of
Destruction
Master Builders Australia commends the Federal
Government’s expansion of the First Home Loan Deposit
Scheme.  Boosting home ownership and residential building
activity are among the most effective ways to fire up aggregate
demand, which is exactly what we need right now (02 October 2020).
 
More…

CFMEU and ACA urge reforms to spark housing construction
boom
The CFMEU and the Australian Constructors Association are
calling for targeted reforms to drive construction in Build-To-Rent
and social housing to stimulate the economy and boost jobs ahead of
the Federal Budget (02 October 2020).  
More…

HIA: Impact of HomeBuilder evident in detached Building
approvals
The impact of HomeBuilder is now emergingin the ABS
Building Approvals Dataand there is a significant divergence
between the outlook for detached and multi-unit dwellings (30
September 2020).  
More…

How Australia’s construction industry can adapt and
build resilience in today’s landscape
In Australia, our construction industry comprises nine per
cent of GDP and the sector is the largest non-service related
industry. Investment in innovation and technology is required to
adapt and build resilience both in the short and longer-term, and
the most digitally mature organisations are recognising the need
for this (29 September 2020).  
More…

MBA: Lending Changes Big Boost for home ownership and
economic recovery
Master Builders backs removing overly restrictive lending
rules that act as a barrier to mortgage and small business finance.
Access to finance, land titling and planning approvals can
substantially delay building of new homes and measures are needed
to remove these impediments and speed up processing of HomeBuilder
applications (25 September 2020).  
More…

Australia’s Biggest Home Builders Get Even
Bigger
Even as the market slowed, Australia’s largest home
building companies have increased their activity and revenues over
the past year as they edged out smaller rivals and took a larger
market share, the latest report shows (24 September 2020).  
More…

Taxpayers risk ‘missing out’ on share of land
value surge near new projects
A British rail expert who advised the NSW government says
there’s a “very short window in which to place”
levies on developments and rezoned land (26 September 2020).
 
More…

SafeWork NSW focusing on falls from heights
SafeWork NSW announced inspectors targeting construction
sites for their working at heights compliance. The focus of the
inspectors will be on verifying compliance in relation to
scaffolds, voids, roofs, edges and skylights (22 September 2020).
 
More…

Practice and courts

ABAB September 2020 forum communique
The Advisory Board looks to influence digital adoption in
construction projects through the various government stimulus
packages (25 September 2020).   
More…

ABCB Consultations

WMTS-522:2020
For Public Comment Technical Specification for the
WaterMark Certification Scheme WMTS-522:2020,incorporates
amendments to allow an addition of similar products of alternate
design to obtain certification. Closes 28 October 2020

Definition for building complexity
The defined term for ‘Building complexity’ has
been developed in response to a decision of the Building
Ministers’ Forum (BMF) that a definition be prepared regarding
the design, construction and certification of complex buildings.
Closes 01 November 2020

Standards Australia: Drafts open for public
comment
Standards Australia are seeking your feedback on a range
of standards concerning the plumbing and drainage trade. On this
page you will find a complete list of drafts currently  open
for public comment from September to October 2020. For more
information, please consult the Standards Australia 
Public Commenting Guide.
.  
More…

GBCA: draft Green Star Homes Standard for
consultation
Part of the Green Building Council of
Australia’s 
Future Homes Strategy
, the Standard is a key tool to help drive
transformation in the residential sector to create a market for
healthier, more resilient, energy efficient homes.

Consultation on the draft standard will run until 30 October 2020.
A copy of the Green Star Homes Draft Standard and information on
how to provide feedback is available 
here
.

2020 National Housing Research Program commences
Research is underway for the suite of projects funded by
AHURI as part of the 2020 National Housing Research Program (NHRP).
The research will be undertaken by collaborative teams from
AHURI’s eight national university research partners. For more
details of the 2020 NHRP projects 
please click here
.  
More…

NSW

Developers must provide advance notice of building
completion
Building developers must provide an
expected date that they will apply for an occupation
certificate. This notice must be provided at least
6 months in advance and no later than
12 months.   If building developers do not
provide notice, fines may apply and/or a prohibition
order may be made that stops or delays
an occupation certificate being issued. Notice can
be given through the 
NSW Planning Portal
 or online via 
here
. Reminder: A transitional period applies to
developers with residential apartment buildings due for
completion?within the first six months
of?the Act starting?1 September 2020. In these
cases, notice must be given within two weeks of the new legislation
coming into effect.

NSW Revenue: HomeBuilder program
HomeBuilder will provide eligible owner-occupiers
(including first home buyers) with a grant of $25,000 to build a
new home or substantially renovate an existing home where the
contract is signed between 4 June 2020 and 31 December 2020.
Construction must commence within three months of the contract
date.  
More…

Cases

NSW


Dave King Building Services Pty Ltd v LeLievre; LeLievre v Dave
King Building Services Pty Ltd 
[2020]
NSWCATAP 204

APPEAL – expert opinion evidence – failure to
refer to or comply strictly with Expert Witness Code –
potential conflict of interest – discretion to reject the
tender of an expert report filed and served late APPEAL –
application for extension of time to lodge appeal – length of
delay – prejudice to other party – prospects of
success

Civil and Administrative Tribunal Act 2013; Home Building Act
1989

Legislation

Environmental Planning Instruments

Local Environmental Plan Amendment (Major Infrastructure
Corridors—Maps) 2020
 (2020-596) — published LW
2 October 2020

State Environmental Planning Policy (Infrastructure) Amendment
(Sydney Metro West Interim Corridor) 2020
 (2020-591)
— published LW 2 October 2020

State Environmental Planning Policy (Western Sydney Aerotropolis)
Amendment (Commencement) 2020
 (2020-586) — published
LW 30 September 2020

Bills introduced  Non-Government – 23
September 2020

Restart NSW Fund Amendment (Rural and Regional Infrastructure
Funding) Bill 2020

This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader’s
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
individuals listed.