On 7 December 2016, the Victorian state government introduced into parliament the Building Amendment (Enforcement and Other Measures) Bill 2016 (Bill). The Bill is the second raft of changes to the Building Act following the Building Legislation Amendment (Consumer Protection) Act 2016, which was passed in March 2016. The Bill contains a significant number of changes. We identify the key changes below at a relatively high level, noting that understanding the detail will be essential for all those involved in building regulation in Victoria.
In the second reading speech for the Bill, Minister Wynne stated the Bill is said to implement the remaining recommendations of the Victorian Auditor-General’s Office and address issues that emerged following the Lacrosse fire in 2014 and the recent demolition of the Corkman hotel in Carlton. The Bill also enhances regulatory powers and increases penalties for offences.
The Bill introduces a new system for registration of corporations. This will result in both the corporation and the directors who are personally registered being able to be subject to disciplinary action by the Victorian Building Authority (VBA) when a project goes wrong.
A corporation will be eligible for registration if it has least one ‘nominee director’ who is personally registered to carry out the same work which the corporation proposes to carry out under its registration. The nominee director will be personally responsible for ensuring the corporation complies with the Act and Regulations.
Corporations or natural persons who wish to become registered building practitioners will have to demonstrate they are fit and proper to be registered based on clear personal and financial probity requirements.
Transitional arrangements provide for a corporation to be assessed for registration at the time that its registered director’s registration is due for renewal. Until then, corporations can continue to carry out building work if they have at least one director who is registered in the appropriate category in accordance with the current arrangements.
The Bill proposes amendments which overhaul the existing ‘holding out’ offences to more extensively prohibit a person or corporation representing or implying that they have a particular class of registration when they do not.
Building surveying corporations will be able to be registered under the amendments and to be appointed as the relevant building surveyor. However, if a corporation accepts an appointment it must ensure that the building surveying work is carried out by a director or employee who is registered as a building surveyor. That person will be known as the ‘designated building surveyor’. The designated building surveyor will remain personally responsible for ensuring that all building surveying work is carried out in accordance with the Act and regulations.
The Bill provides for a private building surveyor to transfer their appointment to another private or municipal building surveyor. The transfer could occur if a building surveying company closes or if a building surveyor goes on leave. The transfer can be permanent or temporary. The following steps will be required to affect the transfer:
- obtain agreement from both the person who appointed the building surveyor and the person to whom the transfer will be made (note: there is no requirement for written agreement but it would be prudent to be able to demonstrate clearly that agreement was given)
- complete a transfer form approved by the VBA
- give a copy of the form to the transferring building surveyor and the new building surveyor
- the new building surveyor must give a copy of the form to the VBA and the relevant council.
It remains to be seen whether a form will need to be completed for each site or whether multiple sites can be listed on one form. There is no requirement to seek consent from the VBA for the transfer, therefore this new transfer process is likely to result in the termination of appointments being less common.
In addition to the new voluntary transfer process, the VBA may direct a building surveyor to accept a transfer from another building surveyor employed by the same building surveying company in various circumstances including where the first building surveyor’s registration is suspended or cancelled or they die, are in prison, become insolvent or are incapable of carrying out the functions as a building surveyor. Where a transfer occurs as a result of a direction of the VBA, the agreement of the person who appointed the original building surveyor is not required, however, that person must be sent notification of the transfer.
Building permit system and levy
To remove some of the regulatory burden on building surveyors and ensure the correct building permit levy amount is remitted to the VBA, the Bill introduces a new system for paying the levy directly to the VBA before a building permit is issued. These provisions require the VBA to develop an online system and therefore the default commencement date for this change is mid-2019. Once the provisions are in force, upon the VBA being provided with prescribed information and payment of the building permit levy, it will issue a building permit number within five business days. A building permit will not be able to be issued unless a building permit number has been issued.
Further changes to s 16
Builder named on the building permit
Section 16 of the Act will be amended (again) to state expressly that the person named as the builder on the building permit will be the person responsible for compliance with the Building Act and Building Regulations. This person will either be a registered building practitioner or owner-builder lawfully able to carry out the work. The builder named on the building permit can be changed if there is new builder engaged or if the builder’s registration is suspended or cancelled. New provisions will be provided for a building permit to be suspended if there is a period of time where no builder is appointed.
Offences and injunctions – the Corkman amendments
The government has concluded that fines alone are insufficient to stop people in the business of building from ‘knowingly doing the wrong thing’. To stop the consequences of non-compliance being treated as ‘a cost of doing business’, the Bill proposes new offences and the ability to seek an injunction. The new offences will apply to people ‘in the business of building’, meaning anyone who is in the business of managing or arranging the carrying out of building work. That person will commit an indictable (serious) offence when they carry out building work and:
- they know the building work requires a permit and no building permit for the work is in force, or
- they know the building work is not being carried out in accordance with the Building Act, the Building Regulations or the building permit issued in relation to that work.
Terms of imprisonment of up to five years will be attached to these offences.
A court can be asked to make orders against both people who are engaged in conduct that would contravene the Building Act and those who may aid, abet, counsel or procure others to do so.
Courts will be able to make a wide range of orders including:
- restraint of illegal building or demolition work
- requiring building or protection work to be performed
- requirement that a building be rebuilt
- that an unregistered Building Practitioner cease trading
- institution of a training program to promote employee compliance
- destruction or disposal of goods that have been or may be used in carrying out building work.
Regulation of building inspections
The Bill amends the Act to provide that building inspections at mandatory notification stages must be carried out ‘in person’ and by registered building surveyors, registered building inspectors or others who are prescribed to do inspections. Building surveyors will also be required to keep records of their inspections and make them available to the VBA, municipal building surveyors and owners upon request.
Power of Entry and information-gathering powers
The Bill provides the VBA and local councils with broader powers of entry and information-gathering. These changes are extensive and we cannot deal with them in detail in this alert. The broader powers are designed to facilitate proactive compliance, ensure that public safety objectives are being met and allow the gathering of information and evidence needed to effectively regulate the industry and enforce the Building Act. Record keeping requirements and a complaints process are also mandated with relation to these powers.
The amendments remove the requirement to provide 24 hours’ notice before entering a non-residential premises. Entry to residential premises will require a warrant unless there is an emergency endangering public safety or the owner has provided consent.
Responsibility of local government
Section 212 of the Building Act is to be amended to provide that the responsibility of a council to administer and enforce the Act and regulations in its municipality is not limited if a private building surveyor is appointed regarding a building or building work. The second reading speech states this is intended to clarify the role of local government but also states the amendment does not alter the ability of the private building surveyor to take action on referral to them by council. It’s difficult to see how this amendment will improve the stalemate that exists between local government and the VBA on who should have regulatory oversight of building works where a private building surveyor has been appointed.
Building notice and building order provisions
The notice and order powers in Part 8 (and related provisions) will be amended in numerous ways. The key changes will be:
- to allow for service of notices and orders on occupiers by affixing the notice or order to the building
- when a notice or order is issued to a lot owner affected by an owners corporation, service can be affected on the owners corporation and the owners corporation must notify each lot owner affected by the notice
- owners corporations will be responsible for carrying out works required by emergency and building orders and they may recoup the cost of the works from the lot owners as appropriate
- the circumstance for issuing a building notice will expressly include where essential safety measures have not been maintained in accordance with the occupancy permit and regulations
- the time for prohibiting occupation under an emergency order will be able to be extended from the initial 48 hours to 14 days if a building notice is issued
- a building order can require an owner to cause an inspection or cause specified material to be tested.
Limitations of actions
The Act currently bars prosecution for an offence after three years from the commission of the offence. The Bill will amend s 241 to provide that a prosecution can be brought two years after the date on which the commission of the alleged offence came to the attention of the relevant Council or the VBA provided that it is commenced within 10 years of the commission of the offence.
There are many amendments proposed and in some cases they will have a significant impact. Some changes are long overdue, others have been made in swift responses to recent events. We have covered most of the main changes in this alert but that is no substitute for a close analysis of the detail to understand the full breadth and impact.