Design and Building Practitioner’s Act

08 Mar Design and Building Practitioner’s Act

In response to the growing incidence of defective building work, the NSW Government passed the Design and Building Practitioners Act 2020 (NSW) (Act) and the Design and Building Practitioners Regulation 2021 (NSW) (Regulations), which came into effect on 1 July 2021.

The purpose of the Act and the Regulations is to restore public confidence in the building sector and imposes obligations on builders and “design practitioners” involved in the design and construction of multi-level residential buildings in New South Wales by imposing a duty of care on parties undertaking construction work to exercise “reasonable care” to avoid economic loss caused by building defects.

At present, the Act and the Regulations only apply to “building work” and “professional engineering work” (as defined by sections 4 and 31 of the Act) carried out for residential apartment buildings (“Class 2” buildings under the Building Code of Australia). This means the Act and Regulations do not apply to other classes of building as yet (i.e. single residential dwellings), but there is scope for the operation of the Act and Regulation to apply to other classes of building in due course.

What effect does the Act and Regulation have?

Since 1 July 2021, in order for a design practitioner, principal design practitioner, professional engineer, specialist practitioner or building practitioner (collectively Practitioner) to undertake work on a multi-level residential building, they must be registered on the Public Register for Design and Building Practitioners (Register).

A Practitioner is required to:-

1. be registered on the Register;

2. be “adequately insured” (as required under Part 6 of the Regulation). A registered Practitioner who is not adequately insured is liable to a maximum penalty of $33,000 in the case of a corporation ($11,000 in respect of individuals);

3. lodge on the NSW Planning Portal the designs for the building element which they designed together with a declaration that their design complied with either:-

(a) the BCA; or

(b) the design meets the performance requirements of the BCA; or

(c) any other relevant standards.

If a Practitioner purports to make a design compliance declaration where they are not registered, they would be liable to a maximum penalty of $165,000 in the case of a corporation ($55,000          in respect of individuals); and

4. lodge on the NSW Planning Portal any variations to a regulated design together with an accompanying compliance declaration. A failure by a practitioner to lodge the designs and to make the requisite declaration as required under the Regulation could give rise to a maximum penalty of $165,000 in the case of a corporation ($55,000 in respect of individuals).

The design compliance declaration for each Practitioner must be lodged before the issue of any occupation certificates for a residential apartment building. The ultimate purpose of the Act and Regulations is to create a system where each Practitioner involved in the design and construction of a residential apartment building certify that their work complied with the BCA, the performance requirements of the BCA or any other relevant standard.

Duty of Care

The effect of the Act and the Regulation is to imposes a new duty of care for registered practitioners that is retroactive and non-delegable, meaning that owners and subsequent owners of land may claim for a breach of statutory duty of care where the loss became apparent within 10 years of the commencement of section 37 of the Act or the loss first becomes apparent on or after the commencement of the section (Section 5, Schedule 1 of the Act) (i.e. June 2010).

Section 37(1) of the Act provides that:-

A person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects–

(a)        in or related to a building for which the work is done, and

(b)        arising from the construction work.

The effect of section 37 of the Act is to merely alleviate the need for a party entitled to take action to prove it was owed a duty of care by the Practitioner. In any proceedings brought for defective work, it is still necessary that a party prove that a breach of the duty occurred and establishing that damage was suffered by the owner as a result of that breach (see The Owners – Strata Plan No 87060 v Loulach Developments Pty Ltd (No 2) [2021] NSWSC 1068).

It is important to note that the duty under section 37 of the Act is subject to

1. the Limitation Act 1969 (NSW), which provides that:-

• any claims under contract have a limitation of 6 years from the date on which the cause of action accrues;
• any claims under negligence have a limitation of 6 years from the date on which the cause of action accrues; and

2. section 6.20 of the Environmental Planning and Assessment Act 1979 (NSW), which provides that a building action may not be brought in relation to any building work more than 10 years after:-

• the date on which the relevant final occupation certificate was issued (or if an occupation certificate is not required, the date on which the compliance certificate was issued) or
• the last date on which the building work was inspected by a certifying authority, or if no such inspection has been conducted, the date on which that part of the building in relation to which the building work was carried out, is first occupied or used.

In practical terms, section 37 of the Act and the registration process creates a system whereby every Practitioner who undertakes work on a residential apartment building will owe a duty of care owners and subsequent owners, section 37 of the Act does not operate to extend any limitation period i.e. any claims must be brought within the 6 year and 10 year limitations provided for under the Limitation Act 1969 (NSW) and Environmental Planning and Assessment Act 1979 (NSW) respectively.

How can we help?

The Act and the Regulation imposes new responsibilities and duties on a builder, architect and engineer who undertaken work on a multi-level residential building. Our building and construction experts can assist you in understanding your obligations under the Act and the Regulations.

If you have any queries relating to the Act or the Regulations set out in this article, please contact Grant Hansen or Alvin Ng.

This article is intended to provide general information on the identified legal topics and does not constitute legal advice and should not be relied upon as such.