The objective of the RBA is to protect consumers by preventing a developer from carrying out construction work that may result in building defects in residential apartments.
The RBA, like the Design Act, has a potentially broad application because the definition of ‘developer’ has been generously drafted. Section 4 says a developer, in relation to building work, can be:
· A person who arranged or facilitated the building work directly or indirectly: [s4(a): the person who contracted or arranged for the building work to be carried out, or who ‘facilitated or otherwise caused’ (whether directly or indirectly)].
· The landowner [s4(b)].
· The principal contractor [s4(c) as defined in the EPA: ‘the person responsible for the overall coordination and control of the carrying out of the building work.’
· The developer of a strata scheme [s4(d) per the SSMA].
The RBA applies only to the residential apartment building but is expected to include mixed-use developments.
Building work is also defined broadly to include residential building work and ‘any physical activity involved in the erection of a building’.
Whilst the RBA is due to commence on 1 September 2020 it too has a retrospective element. Section 6 says that it applies to building work that is incomplete and to building work that has been completed in the last ten years.
Occupation Certificates and Prohibition Orders
Developers must notify the Secretary with the expected completion date of the building work 6-12 months before applying for an Occupation Certificate to give the Secretary sufficient time to inspect the building and take action.
The Secretary is empowered to order the prohibition of an OC in various circumstances including the developer’s failure to give this notification.
A prohibition order can also be issued if serious defects exist or the SSMA building bond has not been paid. An Occupation Certificate issued in breach of a prohibition order is invalid.
A serious defect can be many things including a non-compliant building element, a defective building element or product or a non-conforming building product. The latter includes inflammable cladding.
The Secretary can issue a stop-work order if it considers that the building work is or is likely to be carried out in a manner that could result in significant harm or loss to the public or occupiers, or potential occupiers.
A breach can result in penalties and injunctions.
Building rectification orders
These can be issued by the Secretary if it holds a reasonable belief that building work was or is being carried out in a manner that could result in a serious defect in relation to a residential apartment building. The order requires a developer to carry out or refrain from carrying out building work so as to ‘eliminate, minimise or remediate the serious defect or potential serious defect.’ Non-compliance may result in penalties and payment of the Secretary’s costs of carrying out the rectification works.
Developers may wish to undertake a thorough review of their contracting arrangements.
Do you need advice regarding the Developers and Residential Apartment Buildings Act 2020?
Clare Peacock is an experienced construction lawyer working on Sydney’s Northern Beaches. Clare provides practical, cost-effective building approval advice to property owners, builders and strata managers. Services include residential building disputes, body corporate issues and strata building problems.