System in Crisis? Building Commission Comes in for Rebuke
Written by Caeli Lovell, Special Counsel, of Lovegrove Solicitors
9th of December 2011
he major news this week for the Victorian building industry has been the release of the Victorian Auditor-General’s Office controversial report into compliance with building permits. The VAGO’s findings include troubling statistics that 96% of building permits issued do not comply with minimum statutory safety and building standards. The report concludes that the Commission has failed to monitor the effectiveness of the building control system since its introduction 17 years ago.
This review of the building permit system highlights the importance of Local Governments having specialist legal guidance when applying and interpreting the Building Act 1993. The potential for costly litigation is greatly increased by the risks of injury and damage that result from inconsistent and ad hoc practices by Councils and private building surveyors.
The VAGO found that key problems with the current system include a lack of transparency and accountability. There are no defined targets for monitoring its effectiveness, and the public reporting by the Building Commission offers no insight into its regulatory efforts. Six years after the Victorian Competition and Efficiency Commission found the Building Commission had not given enough priority to evaluating the effectiveness of the building control system, the VAGO has found that a basic monitoring framework is yet to be established.
In recent years many Local Governments have sought to reduce their role in issuing permits, which has led to a significant rise in the activities of private building surveyors across Victoria. Despite the market reforms introduced in 1993, few Councils now issue permits outside their municipal boundaries. The rise of private surveyors and a lack of effective monitoring has left the system wide open to criticism that it fails to protect the public through ensuring safety, competence and compliance with the Building Act.
The Building Commission has responded to the VAGO report by outlining its new audit program, which will see Local Government’s files regularly scrutinised. Building Commissioner Tony Arnel accepted the Auditor-General’s findings, but released a statement that there is “no evidence that buildings are at risk of falling down or causing sickness or injury due to the quality of the building permit system”.
The VAGO report found that most Victorian Councils currently have no systematic review process for permits lodged by private building surveyors. Many Local Governments are unsure of their role in dealing with private surveyors, sometimes resulting in building works that do not meet basic standards.
Mr Arnel outlined some of the features of the new review system to target both municipal and private building surveyor activities. “The risk-based auditing program focuses on Municipal and Private Building Surveyors and will ensure councils are audited in a two year cycle using best practice and a risk-based approach in line with the objectives of the Building Act 1993”.
As well as the confusion about the role of private surveyors, the Auditor General found that a lack of resources and concern about liability in enforcement actions were reasons for Councils not being more proactive in monitoring permits and inspecting associated works. Reports from residents are frequently the only source of information to Councils that result in investigations.
The Auditor General has released a range of recommendations to address the current deficiencies with the system. In respect of building surveyors, these include introducing measures to evaluate the practical experience and document assessments in a consistent and structured way. The VAGO report suggests declarations that practitioners are “of good character” should be investigated, and the documented procedure required by the Building Practitioners Board Registration Policy Manual needs to be retained in case of legal challenges.
In light of the VAGO report and the new audit program being launched by the Building Commission, Councils will need to make sure their files are maintained to withstand the scrutiny of regular inspections. The damning findings of the Auditor General may also lead to a renewed focus on private building surveyors, and will certainly stimulate discussions within the industry as to how the system can be fixed.
If you as a practitioner involved in construction have any doubts or concerns in relation to regulatory compliance talk to the experts at Lovegrove Solicitors. The full report Compliance with Building Permits can be accessed by clicking here.
By Caeli Lovell, Special Counsel, of Lovegrove Solicitors