This National Cladding Alert follows on from our National Cladding September 2017 Alert setting out what action has been taken nationally and in each State and Territory and gives an insight into what may be coming. At the beginning of each section, there is an 'at a glance' summary of the highlights, followed by a more in depth description of what each jurisdiction is doing and an insight into where we may be heading.
Like the UK, Australian governments and regulators continue to grapple with how best to ensure such tragedies are not repeated. In the meantime, the Lacrosse building remains non-compliant. The Grenfell tower awaits demolition.
In Australia, we are starting to see real impacts on the industry fuelled largely by the response of insurers and property buyers whose increased awareness demands transparency before committing to buying property. In the background, regulators continue to investigate and take action.
In the UK, the Independent Review of Building Regulations and Fire Safety Report authored by Dame Judith Hackitt was released in May 2018 and voices a push towards a reconfiguration of the UK building industry. Further, the Housing, Communities and Local Government Committee (part of the UK House of Commons) recently released its response to Dame Hackitt's Report in the Independent Review of Building Regulations and Fire Safety: Next Steps Report which published its support for a ban on the use of combustible cladding materials. Ultimately, this second report has gone one step further than Dame Hackitt's Report which did not recommend a ban. In conjunction with these movements, a public consultation is underway which will receive submissions on how a ban may operate and within what parameters. Submissions closed on 14 August 2018. The submissions will be reviewed and the government will then release its response. Many expect that the UK outcome will guide the Australian response.
The Federal government:
1. Senate Inquiry into non-conforming building products
In February 2018, the Commonwealth government issued its response to the 8 recommendations made in the Senate Inquiry's Interim Report. A summary of the Interim Report can be found in our September 2017 Alert. The final report is now due on 19 September 2018 after the government granted another extension.
The Commonwealth government has confirmed that there is a broader issue of non-compliance with industry standards which calls for swift reform. Malcolm Turnbull, former Prime Minister, encouraged all Australian governments to conduct rigorous auditing of high-rise buildings to assess compliance and enforce action, where appropriate, with an end view of protecting consumers.
The Commonwealth government also drew the Senate Inquiry's attention to the constitutional limitations placed upon the Commonwealth in assisting in the enforcement of some of the recommendations.
Set out below are recommendations supported by the Commonwealth government that relate to combustible cladding:
The Commonwealth government has made the following recommendations:
The Commonwealth government does not support banning the importation of PE core ACP. It considers that a ban would not be pragmatic and would place unnecessary burden upon the Australian Border Force due to the difficulty in testing if cladding is combustible. Additionally, the sale and use of the PE core ACP would place unwarranted strain on manufacturers and suppliers, and this matter would be best managed by State and Territory legislation.
2. Customs Amendment (Safer Cladding) Bill 2017
In our September 2017 Alert, we reported on former Senator Nick Xenophon's introduction of the Customs Amendment (Safer Cladding) Bill 2017. This appeared to be a direct response to recommendation 1 in the Senate Inquiry's Interim Report. The bill sought to outlaw the importation of PE core ACP into Australia.
The bill reached the second reading debate on 12 February 2018. Senator Hume for the Coalition, expressed that the introduction of a blanket problem would not rectify the issue. Instead, he argued that it would accelerate the issue it by banning products that are not wholly non-compliant, and could be used for purposes other than external cladding.
The Coalition stated that the bill is a 'significant overreaction' and the issue is better governed by a the introduction of a 'stronger compliance and enforcement framework.'. Further, Senator Hume acknowledged the need for change amongst the industry yet directed that the government would not support the passing of this bill.
Senator Carr for the Labor Party expressed the necessity for the exclusion on non-compliant cladding products relying on the presently gross inadequacies proffered by the National Construction Code. Other senators argued that the threat to human life far outweighed the cost benefits achieved by builders and developers in using the non-compliant cladding products.
The bill has not come yet come before the parliament since February. Given the Commonwealth government's response to the Senate Inquiry's Interim Report, it appears unlikely that the bill will receive the required bipartisan support for it to become law.
3. Building Ministers' Forum (BMF)
As set out in our September 2017 Alert, the BMF was implementing various measures to inform how the issue of non-conforming building products could be addressed.
Since then, the BMF:
3.1. Ministerial commitment
The above commitment is in place until the Ministers are satisfied that industry participants are implementing the new fire testing processes and are applying permanent labelling on cladding products.
Further, the BMF considered fire safety measures for child care facilities in high rise buildings.
In collaboration with Consumer Affairs, the BMF requested that Consumer Affairs assist in addressing issues of advertising fallacies by introducing a national information standard for cladding products.
3.2. Shergold and Weir Report - 'Building Confidence – Improving the effectiveness of compliance and enforcement systems for the building and construction industry across Australia’
In August 2017, the BMF announced that it had appointed two independent experts, Shergold and Weir, to commentate and assess broader compliance and enforcement issues in the building and construction industry.
The terms of reference required the report to deliver an assessment on compliance problems with industry systems and their effects on the National Construction Code, in respect of:
In undertaking the research, the independent experts were to consider regulatory reviews of both the state and federal governments. The report was further commissioned to provide strategies for improving compliance and present recommendations for a nationally consistent best practice model with a view of strengthening the effective application of the National Construction Code.
The Shergold and Weir Report was delivered in May 2018 and set out 24 recommendations, 10 of which are the most pertinent to the discussion in this Alert. They are as summarised below:
3.3. The BMF's most recent meeting
The BMF acknowledged the work undertaken by both authors of the Shergold and Weir Report and stated that the recommendations will readily inform the restructuring of the National Construction Code.
Further, the Senior Officers' Group (SOG) has been delegated the task of reporting on the responsibilities of interested parties in covering the cost of rectification works for combustible cladding. The SOG is set to report to the BMF at a future point in time.
3.4. Mandatory permanent labelling of cladding products
At the most recent BMF meeting held in Adelaide on 10 August 2018, the NSW government, along with the Commonwealth and other states and territories, called for the mandatory permanent labelling of cladding products. The BMF supported the proposal, to be mandated through the National Construction Code, stating that it would be a major step in ensuring that buildings with cladding are safe for emergency workers.
In October 2017, the BMF finalised the ABCB's Intergovernmental Agenda aligning its priorities to support the BMF's and the wider national construction reforms.
The ABCB has also been commissioned to draft an options paper relating to the interests of vulnerable parties, and will incorporate input from the Disability Reform Council. The report is due for release at the next BMF meeting.
5. Out of Cycle National Construction Code Amendments
The out-of-cycle National Construction Code 2016 Volume One Amendment 1 came into effect on 12 March 2018.
We note the next cyclical amendment of the National Construction Code is due in 2019 (a 3 year cycle rather than the usual 2 year cycle) and is expected to include some significant changes concerning the fire resistance provisions. Stay tuned.
1. Amendments to the Building Act 1993 (Vic)
In the last year, there have been significant changes in respect of inspecting, testing and notifying requirements to assist in enhancing the building industry attitudes and ensuring practitioner's obedience.
The Building Amendment (Enforcement and Other Measures) Act 2017 became operative on 1 July 2018 andfortified the inspection requirements for building work (listed in Part 4 of the Building Act 1993 (Vic)) in the following manner:
2. New Building Regulations 2018 (Vic)
The Building Regulations 2018 (Vic) commenced on 2 June 2018 providing:
3. Proposed new legislation: Building Amendment (Registration of Building Trades and Other Matters) Bill 2018 (Vic)
On 7 August 2018, the Building Amendment (Registration of Building Trades and Other Matters) Bill 2018 (Vic) was released to the public. On this same day, Hon. Minister Richard Wynne delivered the second reading speech in the Legislative Assembly highlighting that an important contextual focus for the Bill is around the contentious issue of combustible cladding. What we can see from these proposed amendments are responses to the recommendations contained in the Victorian Cladding Taskforce Interim Report released late last year (this report is explained further on in this Alert).
The Bill contains important amendments to:
The key amendments are explained below.
3.1. Extended ability to continue issuing building notices/orders
In order to eradicate confusion surrounding the decision handed down in LU Simon and others v Victorian Building Authority  VSC 805, the Bill expressly confirms the continuing role and functions that private building surveyors (when acting in a capacity as a relevant building surveyor) hold.
Their functions are clarified through the insertion of a new s 40(2) which provides that a private building surveyor, when acting as the relevant building surveyor, is permitted to continue issuing such building notices/orders over a building which has already received an occupancy permit, a certificate of final inspection or a temporary approval.
The amendments intend to strengthen the already existing powers of a private building surveyor, and additionally seek to facilitate the effectiveness of the Victorian State-wide Cladding Audit. This clarification of a private building surveyor's functions has been explained as having the potential to assist in rectification works and to work alongside the VBA in an expeditious manner.
3.2. Destructive testing powers
In an attempt to further aid the Victorian State-wide Cladding Audit, the introduction of cohesive, destructive testing powers are set to be amalgamated into the Act. The government appears to be acting upon the recommendations made by numerous cladding expert taskforces, reports and the state-specific Victorian Cladding Taskforce. Notably, the approach that is being taken is to fortify the VBA's powers and bring them into line with powers already held by similar regulators around the globe.
The Bill introduces an ability for either a municipal building surveyor, a private building surveyor or the Victorian Building Authority (together 'authorised persons') to conduct such testing in order to determine the product's compliance, or non-compliance with the Building Act 1993 (Vic). the regulations and the BCA.
However, an authorised person may only exercise this power when it has a reasonable belief that the product may not adhere to the above standards. The use of this power is also restricted by a qualification that the requirement for destructive testing be based on a belief that is reasonably necessary (ie. immediate danger or risk to life, health and safety). The definition of this testing method provides that it is where the testing will destroy the building product or material. Only a prescribed testing authority accredited by the National Association of Testing Authorities (or other bodies as may be prescribed) may carry out the test, which may be occur out on site or at a testing location.
The introduction of these destructive testing powers can also be exercised after a certain building product or material has initially been tested, and can assist in providing clarification where the initial results are inconclusive.
As mentioned above, the ability to exercise these powers will further assist the Victorian State-wide Cladding Audit through providing a comprehensive, conclusive testing method for cladding materials which may not conform with the required standards.
The new destructive testing method regime is set to take effect from the day in which the Bill receives Royal Assent.
3.3. Minister may make declarations prohibiting the use of high risk cladding products
The Minister will become empowered to make declarations prohibiting the use of high risk external wall cladding products where satisfied that such products cause or will likely cause risk of:
External wall cladding product is defined as 'any product or material that is, or could be, used on or in the external wall of a building (including an attachment or ancillary element), but excluding any product or material that the regulations state is not an external wall cladding product'.
Notably, such declarations may:
These amendments are to take effect on a date to be proclaimed, or on 1 July 2019 if they have not commenced operating before that date.
3.4. Creation of a loan repayment mechanism to cover the cost of replacement cladding works
The Bill establishes a scheme to help reduce the cost for land owners and owners corporations of removing non-compliant cladding. The scheme will originate in a new Part 8B of the Local Government Act 1989 (Vic) and largely mirror the existing Environmental Upgrade Agreements which facilitate environmentally-friendly upgrades to commercial buildings.
In order to attract the operation of the scheme, the Minister must first publish a notice specifying the types of works that will attract the application of the scheme. In addition, to also be eligible, the land on which the building is located, must be 'rateable'. The definition of 'rateable land' in s 154 of the Local Government Act 1989 (Vic) provides that all land is rateable, unless an exclusion applies that can be found within s154.
Under the scheme, a council may enter into an agreement, known as a cladding rectification agreement (CRA), with owners of rateable land or owners corporations (where the rateable land is managed by an owners corporation) and a lending body (which may be the council). The lending body advances funds for the relevant removal works and the council raises a cladding rectification charge (charge) over the land the subject of the CRA.
The charge will constitute a service charge as specified in the new s185L(4) of the Local Government Act 1989 (Vic). Under s175(1A) of the existing legislation, the continuation of liability for such charges rests with a new owner, who becomes responsible for the instalments until the date the charges are set to be repaid. This aligns with the parliamentary intention for the charges to run with the land and burden any future owners of the land with the obligation to repay the charge.
The charge may be varied should there be any variation to the works or cost of the works. The council then collects the money received under the charge to repay the lending body and is entitled to charge an administrative cost to do, according to the second reading speech, this incentivises the program for municipal councils. The charge is repayable over a period of at least 10 years.
Conditions which must be met before a CRA is entered into
Before entering into a CRA, a council must be satisfied that the total amount of any taxes, rates, charges and mortgages owing:
does not exceed the 'capital improved value' of the land or lots after the completion of the works undertaken under the CRA. In essence, the council must undertake a financial due diligence to ensure that the existing charges on the land together with the loan amounts under the CRA will not exceed the capital improved value of the land. However, a council may still enter a CRA where all existing mortgagees of the rateable land or lots agree in writing to the charge.
Further and relevantly, a charge must not exceed the expected value of the rateable land after the works are completed, unless all existing mortgagees agree otherwise.
Specific requirements for rateable land managed by owners corporations
Where the CRA is entered into in respect of rateable land managed by an owners corporation:
The owners corporation is not liable to pay the lending body if the charge is not paid – it remains a charge on the land (and is subject to recovery, along with penalty interest, in the same way as if it were a service charge).
Liability of occupier to pay charge
An occupier of rateable property is not liable to pay any part of the charge unless the occupier has specifically agreed to do so in writing. The owners corporations rules specified in the Owners Corporation Act 2006 (Vic) mandate that at least 75% of owners must concur with the desire to enter into such an agreement, thus upon reaching this threshold, will bind all owners within the building.
Owners corporations and affected building owners should seek independent advice prior to considering this option to see if it is an economically viable option in funding the cost of rectification works, should it be applicable.
Commercial landlords may pass on the cost to tenants
Under the proposed amendments, commercial landlords may be able to pass on charges to a building's occupiers only if the occupier has specifically agreed to do so in writing. As a result, the commercial occupier is liable for the amounts due under the CRA and can be pressed for payment by the council during the term of its lease.
4. Victorian Cladding Audit
4.1. Comprehensive State-wide Audit
The initial audit conducted by the City of Melbourne, the Metropolitan Fire Brigade and the VBA focused on 168 buildings in the metropolitan area. Our Alert on that audit can be found here. As at October 2017, 30 buildings identified in the initial audit remained non-compliant.
The first audit was used by the Taskforce to inform the methodology of conducting a more comprehensive Victoria-wide audit which commenced on 1 January 2018 and is well progressed. The audit is being conducted on buildings constructed after 1997.
As part of the audit, VBA's CEO Sue Eddy has released updates which provide guidance largely for occupiers and prospective purchasers.
The methodology of this audit includes:
Where a building has been assessed as a 'high risk' the municipal building surveyor can consider serving an emergency order to require immediate rectification. If necessary, the municipal building surveyor could order evacuation of the building. This has not been considered necessary as yet.
The Taskforce has also encouraged private-building owners to undertake their own inspections.
The Taskforce is also in the process of developing the requirements for rectification. The standard will be evidence based and incorporate both Australian and international product test grades, fire modelling and full-scale fire tests. Once the requirements are settled, the VBA will integrate them into the audit.
5. Ministerial Guideline
In March of this year, the Minister for Planning issued its Ministerial guideline That guideline requires building surveyors to have regard to the type of material to be used as cladding before issuing a building permit. If an ACP with a core of more than 30% PE or an EPS is to be used, a building surveyor must not issue a building permit unless and until the Building Appeals Board has first approved the design through a section 160A application. Our March Alert provides more details about the guideline.
Accompanying the guideline was a Building Product Safety Alert which warns building professionals about potential fire risks associated with the inappropriate use of:
The guideline was issued as a response to the Taskforce's recommendation in its Interim Report released in November 2017. By virtue of section 188(7) of the Building Act 1993 (Vic), municipal building surveyors and private building surveyors 'must have regard' to this Ministerial Guideline in carrying out their functions, including when issuing building permits.
6. Victorian Cladding Taskforce Interim Report
The Victorian Cladding Taskforce's Interim Report of November 2017 voiced sentiments expressed by the Hackitt Interim Report in the UK. The report stated that the issue of non-compliant cladding is a result of:
The Interim Report also found that as the non-complying products were being used, a general complacency of the products' risks seemed to grow.
The Taskforce recommended the following:
The Taskforce continues to work with all interested bodies in paving the way forward for dealing with this issue. If the Interim Report and its tone is anything to go by it is likely that we will see significant change in Victoria's regulatory system in its attempt to combat the inappropriate use of building products.
7. Victorian Building Authority - general
The VBA is in the auditing phase and is continuing to focus its attention on 'unsafe' and 'non-compliant' buildings, including buildings currently being constructed. The Authority has also made the issue widely known to builders, owners and future owners by way of its user-friendly information pages.
7.1. Article providing guidance to building owners and managers
The VBA has published an article in the June – August edition of the Facility Perspectives publication providing a six-step guide which building managers and owners can enact now manage fire risk.
They are as follows:
These simple steps can assist in managing your building and assist in answering queries from residents that may be posed to you.
7.2. Mandatory reporting requirements/notice to builders and property developers
In addition, CEO Sue Eddy released a notice actively requesting for more than 800 property developers and registered builders (individuals and companies) to:
Notably the 'mandatory reporting requirement' is intended to inform the VBA and will assist in '[driving] safety and [preventing] the improper use of combustible cladding on buildings'.
We understand the survey will assist in the VBA's inspections as part of the wider State-wide audit.
The notice incorporated the following:
If those issued with the notice failed to comply with its requests, then the failure constituted an offence which may give rise to disciplinary action by the VBA.
Responses to the above survey were due on 8 June 2018.
7.3. Regulator's guidance
The VBA has also made recommendations as to:
In New South Wales:
There have been a number of developments since our September 2017 Alert which are described below.
1. Fair Trading for NSW Commissioner bans certain cladding products
Following the introduction of the Building Products (Safety) Act 2017 (NSW) last year, the Fair Trading NSW called for public consultation in respect of implementing a ban on combustible cladding products under that Act. These new powers are discussed below in NSW's legislative movements section.
The NSW Commissioner for Fair Trading considered all 28 public submissions received and further considered advice from NSW Fire And Rescue, various expert advice, the Lacrosse Building Fire post incident analysis report, federal reports, the Grenfell fire expert reports, other Australian approaches, including Victoria's Ministerial Guideline, and the NSW Cladding Taskforce.
The consultation and consideration culminated in the NSW Commissioner for Fair Trading prohibiting the use of ACPs with a core comprised of equal to or more than 30% polyethylene (PE) in New South Wales in any external cladding, external wall, external insulation, façade or rendered finish in the following buildings:
The ban applies irrespective of when the building was constructed. In effect, it applies retrospectively to all existing buildings that have the banned ACPs in the external cladding, external walls, external insulation, façade or rendered finish.
There are two exceptions to the ban – products achieving a pass of the AS1530.1 test or wall assemblies achieving a pass of the AS 5113 test – provided the tests are undertaken by accredited testing laboratories. However, the industry recognises that neither of those tests are easy to pass.
Building owners may be compelled to remove and replace the banned ACPs on existing buildings if they cannot eliminate or minimise the safety risk without removal.
Builders, manufacturers and suppliers may potentially be liable for contravening the ban under section 15 of the Act.
Penalties for non-compliance with the ban include:
Our Alert providing a detailed summary of the ban can be found here.
2. Fire Safety and External Wall Cladding Taskforce Audit
Building owners, builders, occupiers, landlords and the like should continue to monitor the audit underway by the Taskforce. The audit will inform the government's assessment on how rectification costs will be allocated.
The Taskforce has completed assessing over 1500 buildings across New South Wales in respect of ACP cladding. Of these 1500 buildings, approximately 412 have been identified as requiring further assessment. The Cladding Taskforce will continue to work with other agencies and local councils to finalise reports on building compliance.
The last update we received in respect of the Taskforce's efforts was in in April. The NSW Minister for Better Regulation, Matt Kean noted that the Taskforce will examine and also report on cost responsibilities in respect of meeting rectification costs. The Taskforce will do so in conjunction with the BMF.
3. Legislative movements and proposals
All building practitioners should familiarise themselves with the following to ensure that they are not in breach of any statutory requirements. The following pieces of legislation and proposed amendments work cooperatively to improve responsibility and the safety of the as-built world.
We released an Alert late last year providing an extensive overview of the above Act in its draft form. Since then, the legislation came into effect on 15 December 2017 (other sections came into effect February and March of this year) and gives extensive powers to the Fair Trading Secretary, namely allowing it to:
A building rectification order may be issued by a council to minimise immediate risks and to restore affected buildings.
In conjunction with its powers, the Fair Trading Secretary can initiate an investigation to building products which may be deemed as unsafe and make enquiries regarding its use and how it should be used. In doing so, authorised officers are able to exercise their information gathering powers, powers of entry and necessitate the occupier to provide assistance.
Notably, this Act prevails over the National Construction Code thus allowing building products to be rendered non-compliant even if it is able to coincide with the requirements under the National Construction Code.
A contravention of the requirements under the Act would constitute an offence of improper conduct under s 51 of the Home Building Act 1989 (NSW).
If an illegitimate building product was subsequently used in contrast to the Act, then this would constitute a major defect for the purposes of s 18E of the Home Building Act 1989 (NSW) (discussed below).
The above amendment was gazetted on 20 April 2018 in further efforts to protect home owners from the negative effects of dangerous cladding.
The use of combustible ACPs is now treated as a major defect in residential building works and as a result classifies for an extended warranty period of 6 years (s 18E).
A building owner is not required to prove that the cladding is a major element of a building. The Regulation only applies if the an owner is able to still bring proceedings for a breach of warranty or if the warranty period has not yet commenced.
We last updated you in our September Alert of the NSW government's introduction of a series of
On 31 August 2018, NSW Minister for Planning, Anthony Roberts MP gave effect to the above Regulation pursuant to s 10.13(1)(d) and clause 3 of Schedule 3 of the Environment Planning and Assessment Act 1979 (NSW).
The draft policy was first introduced in late December 2017, and the amendments proposed to provide for a manner in which buildings affected by external combustible cladding can be monitored by the Department of Planning and Environment.
The Regulation comes into operation on 22 October 2018 and applies to:
The regime under the amending Regulations seeks to do the following:
The above regime is reflective of the position taken in other jurisdictions with a view to maintaining details of buildings which are considered high risk. It is imperative that all building owners pay mind to the new regime as it is not a discretional obligation to notify the Department of Planning and Environment. The amending Regulations impose penalties for non-compliance with the notification scheme.
On 31 August 2018, NSW Minister for Planning, Anthony Roberts MP gave effect to the above Policy which is due to commence on 22 October 2018 and primarily amends the State Environment Planning Policy (Exempt and Complying Development Codes) 2008 (NSW).
The Policy provides:
The use of cladding on high risk buildings will be unable to pass the requirements for an exempt development and will require relevant approvals.
It will be possible for minor external alterations (cladding) to be brought under the definition of a complying development if it meets the relevant BCA fire safety requirements and standards and does not involve the use of materials that are in breach of the development standards. Such an exemption will only available for certain types of buildings (ie. low risk/low rise buildings).
The above Policy amendment also inserts the same definition of exempt developments by amending the following State Environmental Planning Policies:
The Queensland government has introduced new Regulations which will come into effect on 1 October 2018. The regulations have been introduced through amendments to the Building Regulation 2006 (Qld).
The introduction of these amendments come as a direct response to Queensland's policy objective of addressing the lack of detailed building information currently available to the regulator and will allow for the commencement of a state register. The establishment of these regulations set out a course which will require private building owners to provide all the necessary information to assist in evaluating whether a building should be deemed as safe given the materials used in its external parts.
In essence, owners of private buildings will be required to register using an online system and complete an online checklist for the building before 29 March 2019 for existing buildings and buildings under construction. This obligation will be ongoing. If the online checklist indicates that a private building may be affected by combustible cladding, the owner will be required to complete a Part 2 Checklist and provide the QBCC with a statement about whether or not the building may be an affected private building. This statement is known as Building Industry Professional Statement and must be prepared by a building industry professional.
If a building is considered to be an affected private building, the private building owner will be required to complete a Part 3 checklist and obtain a Building Fire Safety Risk Assessment and a Fire Engineer Statement by 3 May 2021.
The Cladding Regulation will also impose other obligations on owners affected private buildings including:
The key changes are discussed in more detail below.
1.1. The concept of an 'accepted development' for the purposes of the Planning Act 2016 (Qld) will include building work to the exclusion of work which involves the 'altering [of] cladding forming part of, or attached or applied to, an external wall or external part of a building other than a roof.' The insertion of this will require building work which comprises of cladding work to apply for a building development approval.
1.2. The insertion of a new Part 4A establishes a three-stage process which applies to all private buildings. Private buildings include:
1.3. The process will require a private building owner to:
1.4. As the owner progresses through the requirements listed above any non-compliance with any part of the process will result in the imposition of a monetary fine.
1.5. In addition to the process, the existing owner is obliged to provide a compliance certificate to a new owner in the event of a change of ownership of the building. The compliance certificate will demonstrate the existing owner's compliance with the new statutory process.
1.6. The amendments will also allow a court to issue an order requiring a private building owner to comply with the provisions if the owner is convicted of an offence under the checklist provisions.
1.7. The register will provide for clear identification of buildings with combustible cladding and assist the regulator with audits of privately owned buildings, the enforcement of their powers and will provide a strengthened chain of responsibility.
A full summary of these changes are set out in our July 2018 – Construction Law Update.
2. Permanent Labelling System for ACP Products – Discussion paper
The BMF has commended Queensland's initiative to introduce a system which clearly marks a product's fire safety capabilities. In response a discussion paper was issued in late June requesting submissions from interested parties relating to the enactment of a permanent labelling system for ACP products to avoid the use of non-compliant building products.
There are questions posed throughout the paper which will assist the jurisdictional bodies to develop the product labelling system. Submissions closed on 15 July 2018 and submissions received are in the process of being analysed.
3. Non-Conforming Building Products Audit Taskforce Report
We were provided with the first report to come from the Non-Conforming Building Products Audit Taskforce in May. The Report acknowledged that there is profound difficulty in identifying non-combustible cladding due to issues with approval documents and a lack of record-keeping. Similarly, the Taskforce's findings highlighted that the actual decision making regarding building products does not take place until a building is well constructed. As a result the approvals process becomes skewed.
The findings also uncovered:
The report made recommendations to the following effect:
In Western Australia:
The WA Building Commission initiated an audit of buildings which use ACPs after the 2014 Lacrosse building fire. The interim report of the initial audit, released in April 2016, noted that all buildings subject to the audit used non-combustible, fire resistant ACPs.
In response to the Grenfell Tower fire, the WA Building Commission broadened the scope of this original audit. The new scope includes all high-risk, high-rise buildings in WA with cladding attached. Buildings such as apartments, hotels and other short-stay accommodation will be prioritised in the audit. The audit will determine where cladding poses an unacceptable risk and the action required to bring the building to a safe state. The audit is still ongoing, with the preliminary stages almost complete.
As at 18 June 2018:
It is relevant to note that the building permit system in Western Australia is different from that in Victoria (and other states). In Western Australia, permits are granted by permit authorities (normally the relevant local government) rather than by private building surveyors. The permit authority is then responsible for dealing with contraventions of the applicable building standards. In order to obtain the building permit required for construction to commence, a certificate of design compliance (signed and issued by a registered building surveyor) is required. The surveyor must be satisfied that (amongst other things) the plans and specifications show how compliance with the BCA is to be achieved. The builder must construct the building in accordance with the granted building permit. In order to obtain the necessary occupancy permit, a certificate of construction compliance (again, signed and issued by a building surveyor) is required. The building surveyor must be satisfied that the building complies with the applicable building standards.
Western Australia is yet to amend existing policies and has not yet sought to introduce new legislation.
In South Australia:
Building owners and practitioners are to adhere to the development to the Regulations explained below. The manner of compliance should be followed where ACPs are being used in building works to ensure the structure's fire safety.
South Australia is still working with its local councils to conduct investigations of residential buildings rising above 2 storeys, so far 77 buildings have been identified as requiring further assessment.
The audit has not yet entered Phase 3 where building's with combustible cladding will be assessed for rectification works. The South Australian government have advised that they are responsible for ensuring that its own assets are safe from fire risks, and that local councils will be required to ensure that private building owners address non-compliant buildings.
1. Aluminium Composite Panel Building Audits – update
As mentioned above, the Department of Planning Transport and Infrastructure is managing the investigatory phase in collaboration with South Australia local councils. During this phase, buildings are being considered to determine whether or not the ACPs and their installation method are acceptable in light of the safety risk they may pose.
Recent media reports have identified 47 buildings as requiring further work to improve their fire safety, however City of Adelaide Mayor Martin Haese has stated that there are no buildings which are of ‘grave concern’.
We expect that the audits will soon enter the next phase which may include the replacement of ACPs, removal of ACPs or the implementation of barriers which would limit the effects of fire spread.
Notably, private building owners are to ensure that they address buildings of concern, effectively ensuring that their buildings are safe to operate.
The above Regulations were given effect on 12 March 2018 with a view to regulating the use of designated building products on designated buildings.
The Regulations are cladding specific. On 20 March 2018, the Minister for Planning issued Notice A and Notice B in the 20 March 2018 government gazette.
The Notices provide the following:
Notice A –
Notice B –
If proposing to use a designated building product it is imperative to adhere to the above requirements in order to be issued with a building rules consent. The purpose of the Regulation is to ensure that building products otherwise considered dangerous, are used in a manner which limits the risk to safety and complies with the performance requirements under the BCA.
We expect that South Australia will readily inform their legislation at the cessation of their audit process. Additionally we also consider that the legislature will mirror other movements taken by jurisdictions across Australia.
The Inter-agency Building Cladding Review Group has been accelerated to establish whether combustible cladding materials have been used in a way that does not align with building standards, or poses an unacceptable risk to building occupants.
The Review Group has been mandated to provide advice to the ACT government in due course.
The following have been listed as priorities for the Review Group:
We await the findings of the Review Group in identifying ACT buildings threatened by the existence of combustible cladding.
ACT is yet to amend existing policies and has not yet sought to introduce new legislation.
1. Tasmanian audit findings
The Tasmanian Aluminium Composite Panel Audit Summary – Regulatory Compliance Report was released on 19 January 2018.
42 of the 43 buildings which were found to have ACP in use were assessed as being of low risk. The 1 high risk building has been identified as the Launceston General Hospital and will undergo rectification works to remove the ACP cladding.
The Panel uncovered similar problems to that of other states, being fallacies in design documentation and the 'as built' environment not matching what was originally approved by building surveyors.
Its summary provided the following recommendations:
2. Amendments to the Building Regulations 2016 (Tas)
Amendments to the Building Regulations 2016 (Tas) came into effect on 27 December 2017. A copy of the amending regulations can be found here.
The amendments provided the following:
Amongst the specific regulations concerning the use of ACP were other requirements such as:
In addition the roles and functions of the Tasmania Fire Service were increased.
The amending regulations were a direct response to the need for a strict approach to limiting the use of combustible cladding with a view to enhance the safety of occupants.
3. Proposed Building Legislation (Miscellaneous Amendments) Bill 2018 (Tas)
On 22 August 2018 the Building Legislation (Miscellaneous Amendments) Bill 2018 (Tas) (the Bill) was introduced into the House of Assembly by Mr Barnett and read for a first time. The second reading speech was delivered by the Hon. Guy Barnett MP and the Bill was passed on 30 August 2018 without amendment.
3.1. The Bill seeks to amend the following pieces of legislation:
The Bill is intended to have retrospective effect, commencing on 1 January 2017 (to the exclusion of Parts 5, 7 and 8 which commence upon receiving Royal Assent). The Building Act amendments will operate retrospectively, and the amendments to the Occupational Licensing Act 2005 (Tas) will commence upon receiving Royal Assent.
3.3. Broadening the definition of 'owner' (s 4)
The Bill inserts a new paragraph to the definition of 'owner', making an occupier who has contractually authorised the performance of work which turns out to be defective or results in the discovery of defective works. This means that an occupier who causes defective work by authorising it by way of contract will be taken to be an owner for the purposes of the legislation.
3.4. Compliance with the NCC (s 11)
The Act now allows for provisions of the National Construction Code (NCC) not to apply if:
3.5. Director of Building Control – determinations (s 20)
The Bill also specifies that the Director of Building Control is to consider 'when, where and how' partial compliance with the NCC may be achieved, when making its determination.
3.6. Minimum Standards of Design Work (s 44)
Persons undertaking design work have been burdened with additional obligations. Where a performance solution is to be applied then the person undertaking design work must assess the work to show that it will likely comply with the NCC.
3.7. Existing buildings to be upgraded if altered (s 53)
A building will not have to be brought into compliance with the NCC if the work performed is:
Note, the Director of Building Control can cause certain buildings to not obtain the benefit of the above requirements.
3.8. Notifiable building work and special-use buildings – certificates of likely compliance (s 98)
The Director of Building Control determines what constitutes 'notifiable building work'. According to the 'Director's Determination – Categories of Building and Demolition Work' issued in July 2017, such notifiable work is taken to be work that is:
The determination provides examples in category 4.
A building surveyor will be required to take into account where work to be performed is on a special-use building which is regulated by a function control authority (as listed in Schedule 3 of the Building Regulations 2016 (Tas)) and where that authority has made recommendations.
A building surveyor will not have to consider if the work is likely to comply with the Act for special-use buildings. Rather they will consider any recommendation made by the function control authority, and satisfy itself that the work is not non-compliant with the Act or detrimental to the health of any existing or future occupants.
3.9. Obligation for the building surveyor in respect of certain special-use buildings (ss 98A, 99)
A building surveyor is to inform the function control authority of the proposed building work on a special-use building. The building surveyor is to provide the authority with a copy of the notice of work and any other specified documents relative to the proposed notifiable building work.
Upon receiving the information, the authority can amend or make recommendations about the work to ensure that the work complies with the Act or any other piece of legislation.
If the notifiable building work is not performed within 2 years the relevant building surveyor is now required to within 5 business days of the period expiring to apply for an extension. There is also an ability to apply for special circumstances where the 5 day period may be waived.
3.10. Considerations for certificates of likely compliance (s 132)
Where an application is made relative to a special-use building the relevant building surveyor will be required to provide the function control authority with a copy of the application for the certification and any other documents as may be required. Upon receipt of the information, the function control authority is able to make recommendations as it may require to bring the work into compliance with the Act or any other piece of legislation.
'Permit building work' is work which requires a building permit in order to be performed. Where a building surveyor considers an application for a certificate for a 'special-use building', it is now required to consider any recommendations made by the function control authority.
Further where a performance solution is proposed for building work, the relevant building surveyor must obtain from the applicant:
An application for a certificate of likely compliance will lapse if the above requirements are not complied with.
Under amendments to s 140 of the Act, an applicant is to include the relevant building surveyor's assessment of the alternative performance solution in its application.
3.11. Granting a certificate of likely compliance for 'special-use buildings' (s 134)
A building surveyor will not have to consider proposed building work's compliance with the Act and the NCC if that work is on a special-use building. Rather it will need to consider the function control authority's recommendations and make an assessment that if there is non-compliance with the Act, it is not detrimental to the health and safety of existing and future occupants.
3.12. Broadening the definition of 'responsible owner' and the maintenance obligations (s 204 and 206)
The Bill seeks to expand the meaning of 'responsible owner' in the part of the Act relative to maintenance to include occupiers whom have a contractual responsibility to maintain the essential building services to which the contract relates. Further a relevant permit authority or a building surveyor is able to approve the schedule of maintenance for a subject building. All approval obligations can now be conducted by a relevant permit authority or the building surveyor.
3.13. Reporting authority's ability to appeal (s 280A)
Under the proposed amendments, a reporting authority in respect of its issued report may appeal to the tribunal against a building surveyor's decision to issue a certificate of likely compliance. Further it can also do so in respect of a condition imposed on the certificate unless it is a requirement of the Act. The same provision applies to an occupancy permit.
3.14. Extension of liability period (s 327)
The proposed Bill seeks to lengthen the liability period from 2 years to 6 years for low risk work that has been performed.