Articles

By James O’Donnell, Senior Associate, co-authored by Jordan Davies, Paralegal, Lovegrove & Cotton

Many building surveyors and companies that offer building surveying services would be familiar with the strictures of Section 81 of the Building Act 1993 and its significance regarding the termination of a relevant building surveyor’s statutory functions. These statutory functions are “baked on” as it were, and it is difficult to untie oneself from them when part-way through a construction project that is subject to a Building Permit. This article deals with the practicalities and ease with which the statutory functions can be transferred from one building surveyor to another as a result of the Building Legislation Amendment (Consumer Protection) Act 2016 (Vic) (Act).

The Building Legislation Amendment (Consumer Protection) Act 2016 (Vic) (Act) made substantial amendments to the Building Act 1993 and came into effect in its first stage in July 2016. Further stages have since come into effect over the last year with some further changes still pending. According to the Victorian Government, the Act serves to “address longstanding flaws in the domestic building system.”^[1] The Act ostensibly extends protections afforded to consumers of building work in Victoria. It is important that owners, builders and building surveyors understand their new rights and responsibilities under the changes mandated by the amendment.

Covered in previous Lovegrove & Cotton articles, one of the most significant elements of the Act was the establishment of Domestic Building Dispute Resolution Victoria (DBDRV) which commenced in April 2017. DBDRV is a new free and mandatory dispute resolution service and is a prerequisite for building dispute matters to be heard at VCAT (for more information on point, kindly refer to Kim Lovegrove RML, FAIB’s article here).

Another equally important measure, albeit one that received arguably less attention, was the changes regarding reasonable grounds and the necessary steps for the transfer of Relevant Building Surveyor (RBS) functions. The Building Act 1993 (the Act), as a result of the Building Legislation Amendment (Consumer Protection) Act 2016, now provides a number of provisions to enable the VBA, as the Authority, to appoint a manager for a private building surveyor’s business where the private building surveyor requests, dies, becomes insolvent, is in prison or has their registration suspended or cancelled. As provided by Section 83B of the Building Act 1993:-

 

BUILDING ACT 1993 – SECT 83B

Appointment of manager

• The Authority may appoint a manager for a private building surveyor’s business in any of the following circumstances if the Authority is of the opinion that it is necessary to make the appointment in order to protect the interests of other persons—
  1. the private building surveyor has requested the appointment of a manager;
  2. the private building surveyor’s registration under this Act has been suspended or cancelled;
  3. the private building surveyor has died;
  4. the private building surveyor is in prison;
  5. the private building surveyor has become a represented person within the meaning of the  Guardianship and Administration Act 1986 ;
  6. the private building surveyor has become insolvent under administration;
  7. the private building surveyor has ceased to carry out the functions of a private building surveyor.
• A manager may only be appointed in relation to, and the manager’s powers and functions under this Division are limited to, the private building surveyor’s functions under this Act and any functions that are reasonably necessary to support the carrying out of those functions.
• A manager is eligible for reappointment.

 

This “manager” must be a registered building surveyor. After this appointment, the manager may fulfil the full duties of the relevant building surveyor. As per Section 83J:-

 

BUILDING ACT 1993 – SECT 83J

Acts of manager taken to be acts of private building surveyor

• An act done by the manager of a private building surveyor’s business is, for the purpose of any proceedings or transaction that relies on that act, taken to have been done by the private building surveyor.
• Nothing in this section subjects a private building surveyor or any partner, officer, employee or agent of a private building surveyor to any personal liability in relation to any act done by the manager of the private building surveyor’s business.

 

Prior to the enactment of the amendments, the Building Act 1993 set out arguably unyielding constraints and regulations for the transfer of the duties of relevant building surveyors. Under the previous legislation, the individual building surveyor was obligated to carry out their duties as RBS until an Occupancy Permit and Certificate of Final Inspection were issued, unless, pursuant to Subsection 81(2) of the Building Act 1993, the owner notified the VBA of the termination of building work. Only after the fact would the VBA deem the appointment of the private building surveyor to be terminated by providing its written consent to the RBS. The principle intent behind Part 6 of the Building Act 1993 was to prevent owners or their agents from ‘picking and choosing’ private building surveyors after a surveyor has been designated as the RBS for a building project (see Section 78(2)).

A common difficulty under this former regime was how to deal with a situation where an individual building surveyor left a company that had the retainer for the provision of building surveying services with a property owner/agent. Thus, under the previous regime, the building surveyor’s statutory obligations could, in certain circumstances, frustrate the contractual obligations of the retainer. In most situations where the original RBS left the building surveying company (i.e. to go on an overseas trip, take up employment at another company, or go out on their own), the company with the retainer wished to hang on to the project in accordance with the retainer.

The Building Legislation Amendment (Consumer Protection) Act 2016 therefore diminishes the likelihood of this dilemma, facilitating a more lenient and streamlined process for the transferral of the duties of the private building surveyor, providing ease for both building surveyors and owners.

Going forward into 2018, the construction and building industry can look forward to further similar including the ability for a body corporate or company to be registered as a building practitioner. As per the VBA, under the future regime, “a company may also be appointed as the relevant building surveyor if it is registered as a building surveyor.”^[2] By appointing a company as the registered building surveyor for a project, one would avoid the conflict between contractual and statutory obligations as described in the above example – diminishing the likelihood for an RBS transfer to be required.

In this regard, the Building Legislation Amendment (Consumer Protection) Act 2016 appears to have lived up to the Victorian State Government’s proclamations with regards to advancing the interests of consumers and building practitioners alike. The Act has proven itself as a highly significant piece of legislation that has substantial ramifications for those involved in the building and construction industry.

The take out is that the game has changed for building surveyors and owners, in that they are afforded greater flexibility to ensure the smooth continuation of building surveying services for building projects, which is in all parties’ interests. If the reader needs expert advice on disputes pertaining to the transfer of relevant building surveyor functions or advice on their rights and responsibilities under the new amendments, it would bode well for them to seek expert legal opinion.

Lovegrove & Cotton Lawyers to the building industry

For thirty years, Lovegrove & Cotton have represented builders, building surveyors and building practitioners in Melbourne, Canberra, Sydney and Queensland. Doyles Guide ranks Kim Lovegrove as one of the leading construction lawyers in Australia. Justin Cotton, likewise, is a leading Australian construction lawyer and widely respected in the building fraternity as evidenced by his recent elevation to Chairperson of the HIA Industrial Relations and Legal Services Committee, and member of the Regional Executive Committee, for HIA Victorian Chapter. Lovegrove & Cotton can help practitioners resolve any type of building dispute and are preeminent in the area of building practitioner advocacy. If you wish to engage the firm, feel free to contact us via our website or by emailing enquiries@lclawyers.com.au.

 

Works Cited:

1. Wynne, R 2015, Media Release: Protecting Victorians from Poor Building Works, accessed at https://www.premier.vic.gov.au/wp-content/uploads/2015/12/151211-Protecting-Victorians-From-Poor-Building-Works.pdf
2. Victorian Building Authority, 2017, Registration of companies as building practitioner, accessed at http://www.vba.vic.gov.au/__data/assets/pdf_file/0013/57100/Registration-of-companies-as-building-practitioner-.pdf