RAB Act – new audit process in action and September 14 deadline

The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act), which we previously discussed here, is now in force, having commenced on 1 September 2020.

The purpose of the RAB Act is to address the issues of non-compliance and serious defects in residential apartment buildings in NSW in an effort to boost public confidence in the NSW building and construction industry.

Additional information has now been provided to industry stakeholders on how the foreshadowed occupation certificate (OC) audit process will work in practice.

We also remind developers of buildings which are within six months of completion that they have up until 14 September 2020 to lodge their expected completion notice, otherwise, they will have to wait until at least 1 April 2021 to apply for their OC.

What’s the purpose of the OC audit process?

The OC audit process has been introduced to:

  • raise the construction standard of Class 2 buildings
  • give purchasers more confidence in their purchases of off-the-plan apartments
  • provide more scrutiny to projects where indicators suggest that work hasn’t been performed in accordance with approved designs, the Building Code of Australia, or using products that meet Australian Standards
  • reinforce accountability and responsibility amongst developers, builders and certifiers
  • reduce the prevalence of non-compliant work.

Applying for an OC

To apply for an OC, the developer must:

  • upload the Issue for Construction drawings or designs to the NSW Planning Portal
  • notify the Secretary of the Department of Customer Service (Secretary) through the NSW Planning Portal or the Fair Trading website (in the case of planning approvals not on the NSW Planning Portal) of the expected date of intent to lodge the OC, the date of which must be between 6 and 12 months away (expected completion notice)
  • upload the interim ‘As Built’ drawings or designs to the NSW Planning Portal
  • upload the building bond and associated documents to the Strata Portal, in accordance with the Strata Building Bond and Inspection Scheme.

How are sites selected for an audit by the Building Commissioner?

Sites will be selected for audit using risk rating tools, whereby all expected completion notices are passed through rating tools and a proportion of the projects that seek to apply for an OC within the following six months are selected.

The key rating tools used for the audit process are the Multi-Party Risk Rating Tool and the Single View of Building.

Sites may also be selected for audit at random. Further sites will be selected using indicators such as reported issues and referrals.

Initially, in September and October 2020, audits will be selected through a manual selection process. From November 2020 to February 2021, the manual selection process will be accompanied by an automated selection process, with the aim being to move to a fully automated selection process from March 2021 onwards.

Being selected for an audit

The developer of the site will receive a letter to their registered address, notifying the developer that the site has been selected for an OC audit and a list of documents that need to be submitted to the Building Commissioner.

The letter will also contain instructions on how to upload the required documents to the NSW Planning Portal, as well as an invitation to a briefing session on the OC audit process.

The letter will also be sent to the builder and certifier, who will also receive invitations to the briefing session.

The OC audit process

The OC audit process begins after the developer uploads the required documents to the nominated portals.

The audit team begins by conducting a desktop review of the documents received, prior to visiting the site. The audit team may require further documents from the developer. The audit team will then spend one to three days onsite for an initial audit, with follow up audits intended to occur over the audit period (dependent on the audit findings).

The focus of the audit team will be on key building areas, including building structure and foundations, waterproofing, fire safety systems, external enclosures and acoustics.

The audit team will issue an initial report, with further reports issued for any subsequent site visits that occur. The developer will receive the report, which will include any recommendations, identified issues and non-compliances, with issues receiving a rating using a red, amber or green rating system.

Conclusion of the audit

The audit process can conclude by one of three ways, namely after:

  • the issue of a favourable final report, which occurs when no rectification work is required. Here, the OC application process continues with the lodgement of the strata bond and as-built drawings
  • satisfactory rectification of any non-compliances or defects; or
  • compliance with a Stop Work Order, Prohibition Order, or Building Work Rectification Order.

Urgent steps to be taken

In order to comply with the RAB Act, developers must notify the Secretary within 12 months, but not later than six months, of seeking an OC.

If on 1 September 2020, your building was within six months of completion, you must notify the Secretary within two weeks of 1 September of an intent to seek an OC.

Developers are strongly urged to consider whether they have current projects within six months of completion, for which notification of intent to seek an OC must be made by 14 September 2020. If they do not meet the deadline, they cannot apply for an OC until 1 April 2020.

Authors: Christine Jones, Peter Holt & Rebecca Weakley

In the media

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Published – articles, papers, reports

Australian Bureau of Statistics 01/09/2020 Building Approvals, Australia, Jul 2020 (cat no. 8731.0)

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Laws applying to multi-storey residential buildings The Residential Apartment Buildings (Compliance and Enforcement Powers) Act (the Act) starts on 1 September 2020, giving the NSW Building Commissioner unprecedented powers to regulate and raise the standard of new residential buildings in NSW. These powers are part of the Office of the NSW Building Commissioner’s Construct NSW strategy.

Starting 1 September 2020 Developers are required to notify (within certain timeframes) of the date construction is due for completion a new inspection compliance program, Occupation Certificate Audits, gets underway a new TAFE course to understand the Occupation Certificate Audit process is available for free for the first 60 days and a new process applies for the lodgement of strata bonds.

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. 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. More...

Onsite inspectors have more power A number of buildings will be selected for an Occupation Certificate Audit by NSW Government inspectors. The audit involves a review of designs and documents (including contracts) and a physical inspection of the building construction. If inspectors find a serious defect, they can enforce action to stop work, order defects to be rectified, and delay the occupation certificate being issued. Without an occupation certificate, the building can’t be occupied, and the sale of apartments can’t be settled, protecting buyers and residents from poor construction.

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Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 No 9 This Act commences on 1 September 2020.