In this technical alert, we provide a summary of the latest news regarding NSW building regulations, including the:
- Design and Building Practitioners Act 2020 (NSW) (DBP Act); and
- Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (RAB Act).
Parliamentary review
When the DBP Act and RAB Act were introduced, they contained provisions requiring NSW Parliament to undertake a review of the Acts within a fixed timeframe.
That review has now been announced, and submissions closed on 2 July 2024. The terms of reference for the review are broad, and are as follows:
- to consider the functions exercised or delegated by the Secretary (i.e., the Department of Customer Service);
- to determine whether the policy objectives of the Acts remain valid and whether the terms of the Acts remain effective for securing those objectives; and
- to consider the desirability of establishing an independent NSW Building Commission (noting that the NSW Building Commission was established on 1 December 2023).
Design and Building Practitioners Amendment (Miscellaneous) Regulation 2024 (NSW)
A new Regulation published on 7 June 2024 addresses three changes to the Design and Building Practitioners Regulation 2021 (NSW).
1. Exclusion of certain hotels/motels and small residential facilities from DBP Act
The following are excluded from the definition of 'building work' under the DBP Act, meaning that they are not covered by the DBP Act regime:
- a class 3 building that is part of a class 9a or 9b building, if the class 3 building comprises less than 10% of the gross floor area of the entire building (for example a small accommodation component of a hospital); and
- hotel/motel accommodation (provided there are no serviced apartments or strata schemes in the building).
What constitutes a hotel or motel is defined in the Standard Instrument, and does not include backpackers' accommodation, a boarding house, B&B accommodation or farm stay accommodation.
However, please note that the above exclusion will not apply if another part of the building is covered by the DBP Act. For example, if a building contains a motel part and a class 2 residential part, the entire building is covered by the DBP Act.
This exclusion is stated to commence on 1 July 2024.
2. Class 3 and 9c buildings – grace period for renovations and repairs extended to 1 July 2025
When the DBP Act was extended to buildings containing a class 3 or 9c part in 2023, a transitional provision provided that alterations, additions, repairs, renovations and protective treatment of class 3 and 9c buildings were exempted until 1 July 2024 (provided that no part of the building was class 2).
That grace period has now been extended to 1 July 2025, meaning that the DBP Act regime will apply to alterations, additions, repairs, renovations and protective treatment of class 3 and 9c buildings from 1 July 2025 (unless the building contains a class 2 part, in which case the DBP Act regime already applies to the entire building).
3. Builder insurance requirements – grace period extended to 30 June 2025
The DBP Act requires registered building practitioners to be 'adequately insured'. However, under transitional arrangements, there is a grace period for builders to meet this requirement.
This grace period was set to expire on 30 June 2024, however, this has been extended to 30 June 2025.
Strata Schemes Management Regulation 2016 (NSW)
The strata building bond, which must be lodged by a developer under the Strata Building Bond and Inspection Scheme, increases from 2% to 3% on 1 July 2024.
The increase applies to all building bonds given on or after 1 July 2024.
This change was legislated in 2023 and while we understand there has been some discussion about delaying the commencement of this change, at the time of writing a delay has not been implemented.
These changes are a continuation of the NSW building reforms and we recommend that all building industry participants familiarise themselves with these changes and prepare accordingly. We will continue to update the market in relation to further updates and legislative reforms in 2024.
If you require specific advice, please do not hesitate to contact our Building Regulations Team.
