Time for tighter regulation of the Victorian building industry?

Key Aspects and Practical Considerations of the Proposed Amendments to the Building Act 1993 (Vic)

The Victorian Government considers that a major overhaul to Victoria’s building regulatory framework is required to address pervasive consumer concern in relation to building safety, quality, compliancy, and efficacy.

On 21 June 2022, the Victorian Parliament introduced the Building, Planning and Heritage Legislation Amendment (Administration and Other Matters) Bill 2022 (Vic) (Bill). The Bill proposes to make a myriad of amendments to a range of legislation, including, and for the purposes of discussion in this article, the Building Act 1993 (Vic) (Building Act).

The purpose of the Bill’s amendments to the Building Act is to ‘implement reforms to reshape the regulatory landscape in Victoria, with a key focus on consumer protection.’ The Bill implements greater regulation and supervision of the building industry and takes a step away from the private regulation of the building industry introduced via the Kennett Government which removed local council’s role in granting building approvals. The amendments to the Building Act implemented by the Bill will result in a hybrid system of building regulation which arguably is a half-way house between private regulation and regulation by local council and state government.

The Bill was passed by the Legislative Assembly on 4 August 2022 and is now with the Legislative Council for consideration.

These amendments have been prompted by recent controversies and deficiencies in the building industry including the widespread use of combustible cladding, the adoption of non-compliant building materials, and concerns about the structural integrity of large apartment complexes. All of these issues have caused widespread concern as to the efficacy of the regulation of the building industry and the cost of these issues have been carried primarily by owners and by the Government.

An expert advisory panel appointed by the Victorian Commissioner for Better Regulation (Expert Panel) is currently undertaking a meticulous review of Victoria’s building regulatory framework. The review comprises of a three staged timeline by which the Expert Panel will conduct research, consult with consumers and industry-based professionals, and will analyse data to develop advice on the development of the Bill. It is anticipated that such advice will be finalised by 2023, at which point or shortly thereafter, the Bill will receive Royal Assent and the enabling legislation will be brought into effect.

This article seeks to summarise some of the key aspects of the Bill, as well as the practical considerations for building practitioners, surveyors and other industry-based professionals.

A. Key Amendments to the Building Act

Parts 2 – 6 of the Bill amend the Building Act to implement several recommendations of the Expert Panel including but not limited to:

1. appointing a State Building Surveyor (SBS);
2. appointing a Building Monitor;
3. expanding the Victorian Building Authority’s (VBA) powers in relation to sharing of information and data;
4. requiring municipal building surveyors to cause an inspection of building on the request by a relevant council;
5. amending the categories of a building practitioner;
6. requiring building surveyors to provide an information statement to the owner of the building or the land;
7. requiring certain building work to be subject to additional inspection prior by a municipal / council building surveyor prior to an occupancy permit being issued;
8. requiring building manuals to be prepared by an applicant for a building permit and provided to the owners corporation and requiring that such building manual be updated by owners and owners corporations in respect of certain buildings;
9. providing additional purposes for which money may be paid out of the Cladding Safety Victoria account;
10. amending the delegation powers of the VBA; and
11. providing restricted licences for carrying out plumbing work.

In particular, the statutory roles for the SBS and Building Monitor are summarised as follows:

B. State Building Surveyor

The Victorian Government established the SBS as an executive limb of the VBA as a source of expertise in relation to building standards and requirements, as well as to encourage and promote improvements to the Victorian building system.

Part 2 of the Bill proposes a new division to be inserted in the Building Act to provide for the appointment, objectives, functions and powers of the SBS.

The SBS will be appointed by the VBA, after obtaining the written approval of the Minister. The SBS will hold office on the terms and conditions as determined by the VBA.

The functions of the SBS include, but are not limited to:

1. preparing and issuing binding determinations for interpreting building and plumbing work standards;
2. providing expert advice and guidance;
3. advising the Minister on strategy and regulatory issues;
4. representing the State on bodies developing national building and plumbing standards and requirements;
5. engaging with building system regulators to enhance the standards and practices within the industry;
6. provide training and education on technical matters relating to building work, plumbing work and building surveying work; and
7. monitor and report on the performance of the building surveying industry generally (see proposed new section 206B).

Importantly, the SBS must consult with building system regulators, industry-based professionals and other stakeholders in order to properly carry out its functions and objectives (see proposed new section 206B(2)).

Further, the SBS may issue binding determinations on the interpretation of technical standards or requirements for building or plumbing work (see proposed new section 206E). These determinations will be binding on construction practitioners including on builders and plumbers and failure to comply with any binding determination of the SBS in carrying out building or plumbing works will be an offence under the Building Act and carry disciplinary consequences.  The SBS’ binding determinations will also be enforced by the Building Appeals Board and by building surveyors.

C. Building Monitor

Part 3 of the Bill proposes a new division to be inserted in the Building Act to provide for the appointment, objectives, functions and powers of the Building Monitor.

The Governor in Council may by instrument, on the recommendation of the Minister, appoint a Building Monitor.

The main objectives of the Building Monitor include but are not limited to identifying and promoting awareness on systemic issues affecting domestic building affected parties’ and providing expert advice to the Minister on such systemic issues (see proposed new section 208E). According to the Minister for Planning and Minister for Housing, the Building Monitor ‘is tasked with representing and advocating for domestic building consumers at a systemic level’ to ‘identify issues facing domestic building consumers and work collaboratively with building system entities to improve the coordination of information and better target support services.’

The functions of the Building Monitor include, but are not limited to:

1. advising and making recommendations to the Minster on systemic issues and risks that affect domestic building affected parties;
2. reporting on research conducted in relation to (1) above;
3. advocating on systemic issues and risks facing domestic building consumers;
4. collecting and analysing information and data to identify such issues facing domestic building consumers; and
5. developing and promoting education materials and strategies in order to reduce consequences for domestic building affected parties (see proposed new section 208F).

The Building Monitor must also prepare a strategic plan four months after being appointed and submit to the Minister for approval (see proposed new section 208J).

In addition, the Building Monitor must prepare and issue an annual Building Monitor Issues Report within the first year of its appointment and for every subsequent year of appointment (see proposed new section 208P).

D. Practical Considerations

The Bill and corresponding amendments to the Building Act are integral to reshaping and reforming Victoria’s building regulatory landscape. Increased oversight of building regulation is designed to enhance and enforce building safety, compliancy, quality and efficacy.

In light of the recent release of the Bill, building practitioners, surveyors, and other industry-based professionals will need to consider how the proposed new amendments to the Building Act will affect their everyday practice.

In particular, stakeholders will be able to lean on the SBS and Building Monitor for guidance, advice, and support in relation to (amongst other things) the interpretation of standards and requirements, as well as systemic risks and issues facing domestic building consumers.

Queries

If you require further information on the above, please contact the authors, or any member of our Building & Construction team.

Disclaimer

This information and contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.