The changes to the regulatory regime applicable to the construction industry in New South Wales, which started in 2020-21, are still not fully understood in the industry. This is particularly the case in relation to repairs and renovations of strata residential buildings.
The purpose of the new laws was to improve the standard of construction of residential apartment buildings by requiring such things as:
- Building plans and designs to be registered,
- Design and building practitioners to have minimum qualifications and be registered,
- Adequate insurances to be in place for such practitioners.
DUTY OF CARE EXPANDED
The laws also introduced a new statutory duty of care applicable to persons who carry out construction work requiring them to “exercise reasonable care to avoid economic loss caused by defects”.
While initially focused was on Class 2 buildings (residential apartments), it was always known that the laws could be extended to other classes of building.
Recent case law has expanded the reach of the statutory duty of care so that it applies to any class of building. It is not limited to construction work in respect of Class 2 buildings. This will probably come as a surprise to many in the industry.
Case law has also highlighted that the type of parties who may be subject to the duty of care is very broad and can potentially extend to directors of a builder or developer, senior management involved in a project, and perhaps even financier representatives who sit on project control groups.
LAWS TO COVER MORE TYPES OF BUILDINGS
From 3 July 2023, the laws were extended to Class 3 buildings (being any residential building other than freestanding houses or townhouses) and residential/aged care buildings.
In times of an acute housing shortage, the increasing ambit of these laws may add to the problem. Of course, if the building/construction work is done properly and all the requirements of the law are satisfied, the ever-expanding reach of the laws should not be a problem.
Time will tell.
Contact me by email if you would like to discuss.
Peter Faludi
Director
Peter Faludi Consulting
peter@peterfaludiconsulting.com.au
https://lnkd.in/gwZ6Utu
