CHANGES TO THE APPOINTMENT OF BUILDING SURVEYORS IN VICTORIA

The Building Amendment Legislation (Consumer Protection) Act 2016 will result in changes to the processes in which a private building surveyor (PBS) is appointed.

As of 1 September 2016, only owners will be permitted to appoint a PBS pursuant to new Section 78(1A) of the Building Act 1993 (the Act).

The change in legislation will not affect an appointment that was accepted or a major domestic building contract that was entered into before 1 September 2016.

Superseded legislation on PBS appointment

The current legislation allows for Builders, as Agents of the Owner, the ability to appoint a PBS pursuant to Section 78(1) of the Act:

(1) Subject to this Part, a person who is entitled to apply for a building permit, occupancy permit or temporary approval under this Act in respect of a building or building work, may appoint a private building surveyor to carry out the functions set out in section 76 in respect of that building or building work.

New legislation on PBS appointment

On 1 September 2016, Section 78(1A) of the Act will take effect to prohibit a Builder from appointing a PBS as the Owners Agent.

The intention for the introduction is to keep an arm’s length relationship between a Builder and PBS to ensure the PBS is keeping with their statutory obligations as the gatekeepers of the Act and the Building Regulations 2006.

Section 78(1A) of the Act is a follows:

(1A) A builder who has entered into a major domestic building contract or who acts or proposes to act as a domestic builder in relation to domestic building work must not appoint a private building surveyor on behalf of the owner of the land on which the domestic building work is to be carried out.

PBS must not accept appointment

Pursuant to new Section 78(1B) a PBS must not accept an appointment referred to in subsection (1A). A PBS should only accept an application for a building permit from the Owner and not from anyone acting as the Owners Agent.

Section 78(1B) is a follows:

(1B) A building surveyor must not accept an appointment referred to in subsection (1A).

No effect on appointment of a PBS in contravention of Sections 78 (1A) or (1B)

If an appointment of a PBS occurs through an application that is made by someone other than the Owner/s, then that appointment will not affect the validity of a PBS carrying out their functions. Therefore, even though a contravention of the Act has occurred through the appointment, a PBS’s functions will have effect and will not be considered ultra vires (without legal authority).

Section 78(1C) is as follows:

(1C) Nothing in subsection (1A) or (1B) affects the validity of any action taken by a building surveyor who is appointed in contravention of those subsections.”.

The role of a PBS

The Act creates the role of the PBS, as well as the municipal building surveyor. In this article we are only focused on the PBS who is a private entity as opposed to an employee of a council. Given most Owners have a limited understanding of building control and whether the plans will comply with the Act and regulations, Owners are required to appoint a building surveyor.

The PBS will consider whether the plans/designs are acceptable, and if so will appoint a building permit. The PBS will then monitor the construction stages by carrying out progress inspections and will issue certificates on completion known as the Final Certificate of Inspection or Occupancy Permit.

To reiterate, the PBS has a statutory function with the paramount responsibility of ensuring a Builders compliance with the regulations.

Beyond carrying out progress inspections under the building permit a PBS also has the ability to issue Building Notices if the Builder fails to comply with the PBS’s directions and the regulations.

The Reason for the Change

The legislatures intention for introducing the prohibition on appointment of building surveyors by Builder is to keep an arm’s length relationship.

Due to concerns regarding the inherent conflict of interest in the statutory requirement for the building surveyor to carry out mandatory inspections on building works of the Builder whilst being employed by the Builder.

Whilst a Builder may be prohibited from making an appointment under new Section 78(1A) of the Act, a Builder will still be able to make a recommendation to an Owner about a building surveyor.

Owners to be provided with a Domestic Building Consumer Guide

Pursuant to Section 29A of the Domestic Building Contracts Act 1995 (DBCA), a Builder must provide the Owner with the contract information statement which is to be known as the Domestic Building Consumer Guide (the DBC Guide). The DBC Guide can be accessed from the Consumer Affairs Victoria website address:

https://www.consumer.vic.gov.au/library/forms/housing-and-accommodation/building-and-renovating/domestic-building-consumer-guide.docx?la=en

The DBC Guide must be provided prior to signing a major domestic building contract pursuant to Section 29A of the DBCA which is a follows:

(1) A builder must not enter into a major domestic building contract unless the builder has first given the building owner a contract information statement in a form approved by the Director under this section

Penalty: 60 penalty units.

Research and Due Diligence

All Owners should be doing their own due diligence to consider the most appropriate building surveyor.

Whilst it is difficult for some Owners to understand who is right for the role as their building surveyor, it is important that you are equipped to carry out your own due diligence by researching building surveyors in your area by doing a Google search at first instance.

Owners should consider the past domestic building works which the building surveyor has been involved in and even have a discussion with multiple prospective building surveyors to get a better understanding for who is most suitable for the appointment.

Conclusion

From 1 September 2016 Owners will be responsible for the appointment of building surveyors and it therefore goes without saying that all Owners should be doing their own research and due diligence. This can be done by discussing the plans with a the Builder, prospective building surveyors and research on Google. Remember that Builders will soon no longer be able to make appointments but they will not be prevented from providing you with advice on a suitable building surveyor.