The Building and Other Fair Trading Legislation Amendment Bill 2022 (the Bill) passed the NSW Parliament this week. This piece of legislation is the next step in a number of sweeping construction and building reforms being progressed by the NSW Government.

This Bill amends a number of Acts including, among others, the Design and Building Practitioners Act 2020 (DBP Act), the Residential Apartment Buildings (Compliance and Enforcement) Act 2020 (RAB Act), and the Strata Schemes Management Act 2015 (SSM Act).

What does this mean?

There are a number of changes that will affect construction industry participants. These include:

• the introduction of decennial liability insurance where a developer of a strata scheme may obtain insurance against serious defects of 10 years (replacing the existing building bond)
• the Commissioner will hold new powers to keep and publish a register of 'stop work orders' in force under the DBP Act and RAB Act
• written undertakings made by registered practitioners will be made publicly available
• increase of penalties to developers that fail to notify the Commissioner of intended completion of building works
• expansion of the scope of building work rectification orders
• expansion of information sharing between the commissioner and other departments and agencies, local councils and contractors, consultants and Australian universities

Impact on construction industry participants

The implications of this Bill and future proposed legislation will be wide reaching for construction industry participants. Currently the reforms apply to buildings containing a Class 2 part, but this year will likely extend to Class 3 and 9c buildings. It is anticipated that this regime will cover all buildings in the future. Builders, developers and those within the supply chain will need to refine their contracts and understand the impact on their risk profiles.

We have created a diagram that highlights the proposed and pending legislation.

We will continue to monitor the building reforms and will be running new seminars in 2023. Please keep an eye on your inbox for further updates and invitations.