Major change for NSW developers in relation to serious building defects

The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) passed swiftly through the NSW Parliament and was assented to on 10 June 2020.  This is part of the government’s response on buildings that may have serious defects, including non-complaint cladding or buildings with Mascot Towers type issues.

The NSW Building Commissioner and other authorised officers have been given additional and new compliance checking and enforcement powers that apply from 1 September 2020.  These are designed to ensure defects are fixed before residents take possession of their apartment.  Significantly, a ‘prohibition order’ to delay the issue of the occupation certificate is a key feature of the changes.

The changes also permit officers to:
  • demand access to information and records;
  • enter building sites to carry out inspections and tests;
  • seize records or other evidence;
  • demolish building work;
  • issue a stop work order;
  • issue a building rectification order;
  • prohibit an occupation certificate from being issued; and
  • prevent a strata plan from being registered.
Importantly, notice is required as a precondition for developers to apply for an occupation certificate for any part of a residential apartment building. Developers must give a notice of their intention to make such an application in the period 6-12 months before the application is ultimately made. The issue of the occupation certificate can be prohibited unless the required notice is given. Penalties of up to $110,000 (for corporations) will apply for failure to give the notice.

These changes apply to new residential buildings as well as to residential buildings constructed in the past 10 years.

There are several significant implications for developers including those with developments that have settled apartment sales within the last 10 years.  The enabling regulations are yet to be enacted. 

If you have questions or would like to discuss the impact of these changes please feel welcome to speak with partners Rebecca Mercer or Chi Chau, who work within Hicksons Property, Planning and Construction Group.

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