Avoiding the ‘Firing Line’
By Owen Lai, Solicitor, Lovegrove Smith & Cotton
It needs to be stressed that building practitioners need to be aware of their obligations at law before they engage in any building work. Disciplinary powers exercised by the Building Practitioners’ Board are far reaching. They can suspend or cancel a building practitioner’s license; or they can impose a fine or reprimand. Cancellation or suspension of a building practitioner’s license during a large commercial project can be disastrous and must be avoided at all costs. Prosecution in the traditional courts can also result in a conviction. This must be avoided at all cost.
This is a general article that aims to raise awareness rather than traverse into the intricacies and penalties imposed under the current building framework in Victoria.
Domestic Building Contracts Act 1995 (“the DBCA”)
The DBCA regulates all domestic building contracts in Victoria. The DBCA imposes an obligation upon a builder to manage, arrange and carry out domestic building work. There are various requirements under the DBCA that the building practitioner needs to be aware of under the DBCA such as:
- The requirement for the building practitioner to be registered;
- The requirement for the building practitioner to obtain foundations data;
- The domestic building contract must contain specific provisions outlined in section 31 of the DBCA;
- The building practitioner needs to make allowances for delays in building work; and
- The domestic building contract must contain provisions warning homeowners of price variations during building work.
The Building Act 1993 (“the Act”)
The Act generates the registration system for building practitioners. It also imposes mandatory standards that need to be met before any building work can be carried out such as:
- The requirement for Builder’s Warranty Insurance before any building work can be carried out; and
- The requirement to obtain a building permit before any building work is carried out.
Furthermore, a failure to comply with Building Orders or Emergency Orders under the Act carries hefty penalties under the Act.
Building practitioners also need to be aware of their potential liability for ‘holding out’ under section 176 of the Act. ‘Holding out’ is a quasi-criminal offence and the Victorian Building Authority is increasingly scrutinising actions that may amount to the direct or indirect conduct of holding to be someone they are not. For example unscrupulous building practitioners holding out to be registered building practitioners when this is not the case will potentially face disciplinary action under section 176.
A previous colleague has written an extensive article on what constitutes holding out. This can be access here: http://www.lclawyers.com.au/elibrary/the-mystery-of-holding-.
It is therefore critical that building practitioners understand and have an intimate knowledge of both the DBCA and the Building Act to avert the consequences of non-compliance. It is prudent for building practitioners to engage a construction lawyer as soon as any disciplinary action is brought against the building practitioner. The adage “a stitch in time saves nine” is apt in these scenarios.
The Lovegrove Smith & Cotton E-Library is a free online resource of articles, which puts a wealth of information at your finger tips. The articles in the E- Library have been written by lawyers and a number of them have been published in the Australian, The Age and the Herald Sun. Some of the articles date back to the 1990’s. To access click here.
© Lovegrove Smith & Cotton 2014