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Question and Answer Tracking Details

0081 - ACTION ON BUILDING DEFECTS

Greenwich, Alex to the Minister for Better Regulation and Innovation
  1. What is the progress on the Government's response to the Shergold Weir Report presented to the Building Minister's Forum in February?
  2. Does the Government intend to implement all commitments presented at the forum?
  3. When is legislation expected to be introduced in Parliament?
  4. When is the new Building Commissioner expected to be established?
  5. To what extent will the Government audit existing apartment buildings signed off by a private certifier for defects including with regard to:
    1. The proportion of buildings to be audited;
    2. Whether buildings or just paperwork will be inspected;
    3. The criteria for buildings considered for audit?
  6. What other action is being taken to address concerns about defects in apartment buildings and homes that have already been constructed?
  7. To what extent is the Government considering whether to introduce a rotation or other system for allocating private certifiers that prevents buildings and developers from selecting the private certifier?
Answer -

(1) to (4) Since the Building Minister's Forum meeting on 8 February 2019, the Government released a response to the Building Confidence Report authored by Peter Shergold and Bronwyn Weir on 19 February 2019 (the response). The response is available on the Fair Trading website. All governments including New South Wales have detailed their response to the Building .Confidence Report through a national implementation plan. The national implementation plan is available on the Building Minister Forum website. The Government Is committed to getting these important reforms right, and the design and implementation of the reforms will be developed in close consultation with the industry and community.

(5) (a) NSW Fair Trading audits the professional conduct of certifiers, not buildings. The Government's four-point plan announced on 30 December 2018 includes a revamped compliance operation for the certification industry, with a target of 25 to 30 per cent of the industry to be audited every year.

(b) Audits may be both desktop and on-site.

(c) Certifiers will be audited according to risk, considering their complaint and disciplinary history and the types of buildings they certify.

(6) Under the Home Building Act, 1989 all residential building work is protected by statutory warranties that are imposed by law In every contract for work.

These warranties are imposed on the developers and builders. These warranties require that:

  • the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract,
  • that all materials supplied will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,
  • the work will be done In accordance with, and will comply with, this or any other law,
  • the work will be done with due diligence and within the time stipulated in the contract, or if no time Is stipulated, within a reasonable time,
  • if the work consists of the construction of a dwelling, the work will result in a dwelling that is reasonably fit for occupation as a dwelling,
  • the work and any materials used in doing the work will be reasonably fit for the specified purpose.

Consumers can seek redress for breaches of these warranties for up to six years for breaches that result in a major defect in the building. Fair Trading provides assistance to consumers to pursue the statutory warranties.

Consumers can pursue the builder or developer to rectify defects or can also apply to the NSW Consumer and Trader Tribunal to enforce the warranties.

Home Building Compensation cover is not required for work involved in the construction. Owners are however covered by the statutory warranty protections. All residential or partially-residential properties that are four or more storeys and commenced construction after 1 January 2018 will be covered under the Strata Building Bond and Inspections Scheme. This scheme includes a building bond by the developer and mandatory defect inspections and reports on the development by an independent building inspector. It provides a structured, proactive process that resolves building issues quickly and cost effectively, early in the life of the building

(7) The Government sought feedback on three possible methods of alternative appointment for private certifiers with the public release of Improving Certifier Independence (the Options Paper) on 31 October 2018. The three options included a rotation scheme, a cab rank scheme and a time limit scheme. After considering the feedback received during consultation, the Government decided not to progress with any of the proposals, instead announcing the four-point plan detailed above in response to question (5).

Question asked on 9 May 2019 (session 57-1) and printed in Questions & Answers Paper No. 3
Answer received on 13 June 2019 and printed in Questions & Answers Paper No. 10