It’s out with the Old, In With the New: Turmoil in Building Regulation Heralds Reforms
By Justin Cotton, Partner and Head of Practitioner Advocacy and Stephen Williams, Construction Lawyer, at Lovegrove Solicitors
Anyone who has been paying any attention to media concerning the Victorian construction industry over the last 12 months, will know that significant bad press has attached to the regulatory watchdog.
Consequently major reform is in the offing, with changes to be rolled out over incremental stages. The state government is introducing a Bill that will see amendments to the Building Act 1993 and other laws, with the first changes commencing on 1 July 2013.
The building regulatory system has seen ongoing instability and has occasioned media controversy, amid fears that the system is not protecting the needs of stakeholders. As the Planning Minister Matthew Guy has said recently: “These reforms recognise that the current system is not working as well as it should for either consumers or builders.”
One of the most well known changes will see the replacement of the Building Commission and the Plumbing Industry Commission with a new body to be known as the Victorian Building Authority, or VBA. This is more than a name change for existing entities, as the VBA will apparently have more extensive powers than the current entities it is replacing.
Reforms will chiefly be targeted at three key areas, namely the powers of building surveyors, new disciplinary provisions for building practitioners, and building practitioner registration.
Some of the key changes will affect the ‘statutory guardians’ in the construction industry, being the relevant building surveyors (“RBS”).
Under the Bill commencing in July, the VBA will have the authority to direct both Council and private building surveyors to do the following within a specified period:
- Carry out their functions in accordance with the Building Act 1993 and the Building Regulations 2006; and
- Take actions recommended by the VBA.
At the same time, the VBA will need to give the RBS notice of its intention to make a direction and must then afford them a reasonable opportunity to make submissions about the matter – a bit like the ‘show cause’ building notice that an RBS can currently serve on an Owner under Part 8 of the Building Act.
Under the current regime, where an Owner fails to adhere to a Building Order served by the RBS, then the RBS must refer the matter to the Building Commission under Part 8 and take no further steps.
Notably, the VBA will have the authority to perform functions of Council building surveyors in regard to any application for a building permit under Part 3 of the Act, any matter referred to it by a private surveyor under Part 8 (ie where there has been non compliance by an Owner with the terms of a Building Order), and in regard to a place of public entertainment where the VBA has issued an Occupancy Permit.
As can be seen then, the VBA will have more extensive regulatory powers than is currently the case with the Building Commission, as well as retaining the Commission’s existing powers in other areas. The aim is to supply a form of ‘one stop shop’ for the full suite of construction industry regulation in Victoria.
The Bill is to strengthen the sanctions that are available to the Building Practitioners Board (BPB); this is not surprising given the significant public concern about bad or unregulated building practices that has been discussed in the media, particularly The Age, in recent months.
Currently if one compares the available sanctions in section 179 of the Act, it can be seen that there are fewer options for a disciplinary body for censuring a practitioner than would be comparable in the NSW Building Professionals Board scenario.
For example, under the changes the requirement to complete a course of training (which is one disciplinary option) can be ordered to be done “within a specified time”. Further, the undertaking not to do a specified thing will now include imposing an undertaking for the practitioner to positively do a specified thing.
Of major significance is the new venue for appeals from disciplinary decisions. At the moment, an application to review or appeal a disciplinary decision of the BPB is made to the Building Appeals Board (BAB), another arm of the Building Commission. Given that the BPB also decides registration applications, reviews of these decisions can also be challenged at the BAB. All of these hearings require participants to wend their way down to the Goods Shed North offices near Etihad Stadium.
Under the changes, review of such disciplinary decisions and also practitioner registration inquiries will be heard at VCAT, presumably in a dedicated List. The power to review the decision at VCAT will be triggered by either a decision of the BPB or the failure to make a decision within a reasonable time.
This raises concerns about whether VCAT will be adequately resourced and staffed to handle such an additional List and given the volume of matters that will now need to be heard at VCAT.
Note that the reference to “Building Practitioners Board” will itself have a limited lifespan. Further reforms after July this year will see the BPB, BAB and Architects Registration Board replaced by other bodies run by the VBA. This will also see the Architects now subject to the same disciplinary investigation regimes and potential sanctions as other construction practitioners.
Registration of Practitioners
Some of the current crop of consumer advocates have made much of the existing system of practitioner registration. In the writer’s experience it cannot be said that it is not a thorough process for applicants already, certainly many of our builder clients seem to think so.
In any event, these requirements are set to be tightened. There will for example be the need to accompany a registration application with an authorisation for the VBA to conduct a police record check of applicants. It is understood also that the “good character” test for applicants will be phased out in favour of tests for personal and financial probity, and there may be extra criteria to be satisfied when renewing registration.
The Long View
This Bill is the first step as part of the Victorian Domestic Building Consumer Protection Reform Strategy. In time, this could even see more far reaching reform that veers onto the hallowed ground of domestic builder insurance, possibly even expanding this into something beyond ‘last resort’ insurance – but empowering insurers with more ability to pursue the builder to recoup costs.
There is hoped to be an ability for the VBA to more precisely focus on auditing the building permit and building inspection and approval processes, and to also create a public register for disciplinary findings. Whilst such a public register exists in NSW and Queensland, consumers in Victoria do not have such easy access to a practitioner’s disciplinary history or past disciplinary determinations.
It is hoped by the state government that all these changes will in time serve to reduce the number of building disputes and speed up dispute resolution, as well as ensuring better regulation and in turn building standards. These are all worthy aims to achieve, and time will tell how these important reforms play out in the industry.
For more advice on your rights and responsibilities in this area of law, or if you are perchance in a dispute yourself, do not hesitate to take prompt legal advice now.
By Justin Cotton, Partner, and Stephen Williams, Lawyer, of Lovegrove Solicitors
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