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Building regulations NSW
Construction Risk Management Plan
15 July, 2021
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27 December, 2021
The latest legislative changes in the construction industry took effect starting on July 1st, 2021. Therefore, Building Regulations NSW is now enriched with the Design and Building Practitioners Act 2020 and Residential Apartment Buildings Act 2020, which also became effective on July 1st, 2021. We analysed the possible effects of the legislation on the construction industry in NSW, and here are our remarks.
Table of Contents
What are building regulations in construction?
Building regulation is a set of mandatory standards for the design and construction of buildings. The goal of the standards is to make sure the buildings are safe for people and fully operational.
The previous state of the residential building sector in NSW
According to the NSW building commissioner David Chandler, the new legislative act will put an end to not-so-favourable practices in the construction industry in NSW. It will discourage builders, certifiers, and developers from not delivering good projects, impacting the overall quality of residential building projects in NSW. He reiterated that the previous building regulations in NSW were not adequate to stop the bad practices in the construction industry.
The customer’s confidence in the residential building sector was low due to the epic construction failures with Opal Tower and the Mascot Towers. The goal of the legislation was to put an end to shady practices in the industry, increase the quality of residential buildings and reduce the construction risk and defect costs on customers. Therefore, a new NSW building code for residential buildings was more than needed.
Latest changes in NSW building regulations
There are two main focuses when it comes to the legislative change that took effect in July 2021. The first is about enabling inspection mechanisms to make serial offenders accountable, and the second one defines the mandatory minimum design documentation that is required before any development work is done.
Summary of the recent building regulations changes
The essence of the new NSW building regulations is that it means putting additional obligations and required standards upon design practitioners and builders by imposing a new Duty of Care. It means that every entity that carries out construction work should perform its business with reasonable care to avoid economic loss caused by construction work, or is related to a building that was subject to construction work.
The new Duty of Care
The new Duty of Care is designed to benefit the owners of the land and protect them from economic loss caused by defects arising from construction work, or in or related to a building where the work is done. The new Duty of Care relates to the construction of a building, alterations or additions, repair or renovation work, preparation of designs for building work, manufacture, or supply of building products, and supervising and construction project management.
Affected parties of the NSW building code for residential buildings
The affected parties of these regulatory changes are builders, developers, and certifiers, with the construction industry watchdog aiming to provide more transparency and security for prospective buyers in the residential building sector.
What it means for designers, builders, and engineers
- They should be registered from July 1st
- Imposed obligations of training teams to understand new regulations, reviewing contracts to be aligned with the new regulations, and adjusting procurement and contract administration
- Ensure that Regulated Designs are integrated with other designs, completed to the required extent to be eligible for the construction certificate, and lodged before commencing any construction work.
What it means for developers
- Imposed obligations to check if projects comply with the regulations to secure an occupation certificate
- Obligation to ensure all Regulated Designs are complete to the extent required for issuing of a construction certificate or a complying development certificate and that they are lodged before commencing any construction work
- All variations should be declared and lodged within 1 day after starting building work on the specified variation
- Review all contracts to make sure they align with the new regime
- Adjust project feasibility, procurements, and contract administration according to the requirements of the new regime
What it means for financiers
- Imposed obligations on ensuring financial documents are in line with the new regime
- In order to get an occupation certificate for a project, make sure to comply with the new regime
- Check if designers and builders are registered and insured
- Reviewing procuring models and analysing if quantity surveyor should assess compliance declarations and variations regime
What is the NSW Building Code?
The National Construction Code (NCC) defines nationwide technical requirements for design, construction, and performance in the construction industry, including buildings and plumbing and drainage systems. It includes the Building Code of Australia and the Plumbing Code of Australia.
What is the difference between BCA and NCC?
NCC or National Construction Code of Australia is the main national regulatory code for the construction industry, and it’s the updated version of BCA ( Building Code of Australia) which means that NCC replaced BCA in 2011.
Key takeaways
Affected areas
The legislative change affects only Class 2 buildings and mixed-use buildings with a Class 2 part, and the regulative applies to the construction, alteration, addition, repair, renovation, or protective treatment of those buildings.
Registration is required
All practitioners who want to continue with their projects with Class 2 and mixed buildings need to register from 1 July 2021 through the NSW Planning Portal. Builders also must hold a license under the Home Building Act 1989 and have at least 5 years of practical experience in this area.
Design quality
Regulated Designs must be in line with the latest construction standards before any construction work begins on-site. Defining minimum requirements for the design quality of residential buildings will minimise the risk of design defects. The new act requires that all design work of critical elements of the building should be completed before construction begins.
Insurance
Engineers and designers who work on 2 class buildings must be insured in accordance with the regulations. However, the application of the insurance provisions is deferred up to July 2023.
Penalties for not complying with the new NSW building regulations
Failure to comply with the new building code for residential buildings results in imposed fines, or the occupation certificate being withheld. The fines can be severe and go up to $100,000 and beyond if there are severe safety issues on site that can cause injuries or even death.
Who regulates building in NSW?
After an impressive career in the construction sector, David Chandler became an NSW Building Commissioner in 2019 and will remain in his role until August 2023.
What legislation covers building and development in NSW?
- The Environmental Planning and Assessment Act 1979—this act defines the types of approval that need to be completed before the construction work can commence. One of the requirements is to be compliant with the requirements of the National Construction Code, which is the Australian primary set of provisions for building.
- The Home Building Act 1989—regulates the residential building industry and defines the minimum statutory rights of builders, residential property owners, and developers.
- Home Building Regulation 2014—also defines the legal requirements for the residential building industry,
- State Environmental Planning Policy—a policy that will help buildings achieve zero emissions by 2050.
- The Development Certification and Fire Safety Regulation—started on January 2022, and includes provisions for fire safety, construction and occupation certificates, and other operational provisions.
Which regulatory changes are planned for 2023?
The main focus of the construction industry in 2023 will be sustainability, as the target is to reach net-zero emissions by 2050. Therefore, the government has introduced a State Environmental Planning Policy which will start on 1 October 2023.
The goal of the policy is to make construction industry more sustainable, with less negative impact on environment, with promoting recycling practices whenever possible.
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