New laws to hold development groups to account

New laws to hold development groups to account

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The NSW State Government has introduced a raft of changes set to help offer better protection to buyers and residents of multi-storey apartment buildings.

The changes are part of a broader move by the government to make it easier for the public and government agencies to interact with each other and the planning system.

It is hoped the reform program will restore public confidence in the construction industry, particularly for multi-storey residential apartments.

The first change likely to impact developers who construct residential strata buildings involves a new process for the lodgement of the strata building bond.

Since 2018, developers of new residential strata buildings (four storeys and higher) in New South Wales are required to pay a building bond to NSW Fair Trading equal to two percent of the building contract price.

The purpose of the bond is to secure payment for the costs of rectification work identified in the inspector’s final report and must be provided prior to the issue of an occupation certificate.

Where previously this bond was lodged via the Strata Building Bond and Inspections Scheme’s (SBBIS) e-Portal, effective September 1 (last Tuesday) lodgement will now need to be done via the New South Wales Planning Portal, also known as ePlanning.

But by far the larger of the new changes is the enactment of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act, which came into force the same day.

The Act’s introduction means the NSW Building Commissioner now has unprecedented powers to regulate and raise the standard of residential buildings in NSW.

These powers are part of the Office of the NSW Building Commissioner’s Construct NSW strategy to protect apartment owners and residents from poor construction.

The Act, which introduces new laws for the construction of multi-storey apartment buildings, means that developers are now required to notify (within certain timeframes) of the date construction is due for completion six to 12 months prior to applying for an occupation certificate.

If this date changes, an expected completion amendment notice must be given.

However, for buildings expected to be completed during the initial transitional six month period from commencement of the Act, the notification period is shortened to 14 days from commencement.

In a move designed to prevent a repeat of the Opal Towers incident, the introduction of the new Act also means that reporting of building defects can now be applied retrospectively for buildings up to 10 years old.

The law changes mean that owners corporations must report all building defects to NSW Fair Trading in the first instance, while individual strata and community lot owners can report their issues on the NSW Fair Trading website.

Each complaint will be reviewed and assessed before an appropriate response is identified. Not every complaint will result in an investigation.

Under the clauses of the Act caretakers and others who control access to common property areas will be legally obligated to cooperate with inspectors to enable the inspection to be carried out.

In the event serious defects are found in the building, the developer fails to pay the full strata bond, or neglects to comply with their notification obligations, the Secretary may issue an order prohibiting the issue of an occupational certificate and, if relevant, the registration of a strata plan for a strata scheme.

The NSW office of strata industry body, Strata Community Australia, released a statement indicating they are incredibly pleased that NSW will have a leading system of design and building regulations that will deliver well-constructed buildings into the future.

As we head towards the end of 2020, we look forward to the fruition of game changing initiatives that they’ve been proud to be a part of with Commissioner David Chandler and the Office of the Building Commissioner (OBC).

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The information provided is a general guide only and is not intended as a substitute for legal advice. The company disclaims all responsibility and liability for any expenses, losses, damages, and costs which might be incurred as a result of the information provided by the company.

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