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In Victoria there has been a healthy level of new home building for some time now, partly to account for the uptick in population growth and increasing “urban sprawl” in the Melbourne metropolitan area.  With that new building activity, which can include (these days) high rise apartment construction in inner suburbia, new building approvals can come into tension with the amenity of neighbouring properties.

Once a Planning Permit has been approved for new residential construction (where planning approval is needed), the development then moves toward the issue of a Building Permit, before works can commence. The rights of adjoining owners and the amenity of their land must still be respected even at the Building Permit approval stage, just as some effects on neighbours are also assessed at the time of Planning approval.

Both those parties seeking to carry out new development, and also adjoining owners, should be cognisant of their rights and responsibilities under the Protection Works regime set out in Part 7 of the Building Act 1993.  In particular, adjoining owners need to act swiftly to take advice to better protect their rights, lest they be “asleep at the wheel” and live to regret inaction at a later time after their property amenity has been affected.

For adjoining owners, their only tangible check they have on new development at the Building Permit approval stage is under Part 7 of the Act.  This is where the Protection Works mechanism is found, and it is initiated once an adjoining owner is served with a Protection Works Notice by a Developer seeking to carry out new building work.

The Protection Works Notice should contain adequate information to identify the property and the proposed building work, and specify what protection work to secure the interests of the adjoining land will be carried out, and the timing and location of that protection work.

Some common examples of types of protection work include scaffolding and barriers to guard against falling objects / debris from the subject land, and methods of work to ensure that excavation does not undermine the boundary between properties and structural footings on the neighbour’s land.  For larger developments potentially there could be the use of ground anchors that will reach under the boundary into the ground beneath the adjoining property, subject to the consent of the neighbour.

The Protection Works Notice must be in the approved form contained in the Building Regulations (Form 7) and allows for three different responses that can be made by the adjoining owner by ticking the appropriate box.  The choices are to “agree” to the proposed protection work, to “disagree”, or to request further information.  It must also enclose a Form 8 Protection Works Response Notice for the use of the adjoining owner.

Whether a Protection Works Notice needs to be served at all will depend on the discretion of the Building Surveyor, who must decide whether it is likely the intended works could have a material effect on adjoining land.  If the Building Surveyor decides there could be such an effect, they will direct that a Protection Works Notice ought to be completed and served.

However, the Building Surveyor is not responsible for the preparation and service of Protection Works Notices, and that is a matter for the Owner or their agent Builder.  Nor is the Building Surveyor responsible for advising an Owner on the form of the required protection works insurance (s93 of the Act) or the contents of any dilapidation report of the adjoining property (called up by s94). The Building Surveyor is certainly not responsible for advising the Owner or their agent on the content or design of the protection works, given that they are to be independent and not involved in design.

In fact, Building Surveyors have a circumscribed role under Part 7 of the Act, and their main function really is to make a determination whether proposed Protection Works are appropriate or not, if the adjoining owner serves a Protection Works Notice disagreeing with the proposal.

Note that the Building Surveyor for a proposed development is supposed to be an independent and impartial regulatory authority, even if they have a private retainer with the Owner, because their remit is to uphold regulatory standards rather than ensuring swift approvals for a developer.  They will only come on board at the time that plans are to be submitted for a Building Permit, and they are known as the “Relevant Building Surveyor” for a project.

Caution must be exercised by the adjoining owner to ensure that the Protection Works Response Notice is completed, signed and sent back on time to the party that provided the original Notice to them.  Commonly, they will have been served with the Protection Works Notice by the Builder, as agent for the developer owner.  The strict time period to sign and return the Protection Works Response Notice is 14 days, otherwise, the adjoining owner can be deemed to have agreed to the proposed protection works.

If the adjoining owner elects to disagree with the proposed works, or if they request more information, they should also serve a copy of the Response Notice on the Relevant Building Surveyor (“the RBS”).

Under section 92 of the Building Act 1993 it is possible for the adjoining owner to request that the RBS make available for inspection (free of charge) a copy of relevant drawings and specifications that relate to the proposed building work.

There is no harm in seeking legal advice if you as an adjoining owner receive a Protection Works Notice setting out works that you disagree with.  If there are concerns about potential structural effect on your land from the planned building work, you would also be well advised to seek an engineering consultant to guide you, and usually a construction lawyer will be able to “point you in the right direction” for the appropriate building expert.

Pursuant to section 97 of the Act, the adjoining owner can seek that the developer owner later compensate them for the costs necessarily incurred in assessing proposed protection works and supervising these works when they are carried out.  This all sounds well and good in theory, but in practice the quantum of such costs can be a fertile ground for disputation.  The RBS cannot rule on the level of s97 costs and any dispute on this can be referred to the Building Appeals Board for a determination.  Ideally of course the neighbours should strive to reach agreement on quantum.

It should be noted that the response process on the Protection Works Notice must be conducted prior to the issue of any Building Permit by the RBS.  Therefore, the adjoining owner has some comfort in knowing that works cannot commence on site until the protection works determination process has been completed.

In addition, the Act provides that protection works insurance should be in place to protect the interests of the adjoining owner from property damage arising from the building work, and also a dilapidation report of the condition of the adjoining property should be agreed with the adjoining owner.  These agreements should be in place before any building work is started on site, even if the Building Permit has already been issued by the RBS.

If the adjoining owner advises in the Response Notice that they require more information to make an informed decision, the RBS may ask the Owner to provide further information relevant to the protection works, such as plans or computations. This information if received is to be given to the adjoining owner for their consideration.

If the adjoining owner has advised formally that they disagree with the proposed protection works, and all required information has been supplied, it will then be incumbent on the RBS to make a determination under section 87 of the Act.  This is the RBS acting in their referee role, if you like.  The RBS will then need to make a determination on whether or not the proposed protection work is acceptable or not.

If either the developer or the adjoining owner does not like the outcome of the section 87 determination by the RBS, they have a right of appeal to the Building Appeals Board (“the BAB”).  This is not necessarily a fast process, unless a matter is able to be ‘fast tracked’ (in rare cases only and subject to payment of a higher fee), and any BAB proceeding can take a few months before it comes on for final hearing.

The time limit for an appeal of the RBS’ s87 determination is 14 days, and in practice the Building Surveyor will generally not issue a Building Permit until that 14 day appeal period has passed, lest there be an appeal from an adjoining owner.

The Respondent to an adjoining owner’s application to the BAB will be the Owner of the land where the works are proposed, and not the RBS, who will be part of the proceeding as an “interested party” only.  This is even though it is the determination of the RBS that is under appeal.  Given that the rights in the Building Act 1993 are premised on the assumption that the owner of the subject land must compensate an adjoining owner for any loss or damage, the right of appeal is regarded as a property dispute between neighbours.

If you are an applicant to the BAB and you are fully successful against the other party then you can attempt to seek an award of your legal and expert costs in your favour.  Note though that it is difficult to recoup legal costs at the BAB and you must be mindful of the rule in the case of Stewart v The Building Practitioners Board.

The rule in Stewart says that the ordinary rule as per Schedule 3 of the Act is that each party to the Building Appeals Board should bear their own costs, unless there are some special circumstances that justify an award of costs in a party’s favour.  However, it is said in that case that “special circumstances” means more than just being the successful party at the hearing.  An argument for special circumstances could mean a claim that the other party’s stance has been unreasonable and without merit, such that the case should not have needed to go to final hearing.

An adjoining owner should take care to ensure that they have sighted evidence of an insurance policy that is compliant with section 93 of the Act, prior to agreeing to the protection works.  This means more than just being given a copy of a certificate of currency for the Builder’s contract works policy.  Instead, the adjoining owner should ask to see not only the certificate of currency but also the policy schedule, to ensure that the endorsements name the address of the adjoining property, name the adjoining owner as at least a third party beneficiary under the policy, and refer to protection works. The endorsement wording can be checked with a lawyer to ensure the guidelines in the Supreme Court decision of Colonial Range v CES Queen are satisfied.

This evidence of a compliant insurance policy should be sighted prior to works starting on site (see s93).  Indemnity under the policy should be against “damage by the proposed protection work to the adjoining property” and “any liabilities likely to be incurred to adjoining occupiers and members of the public during the carrying out of the building work and for a period of 12 months after that building work is completed”.

The writer has been involved in a dispute where cracking to a garage on adjoining land was discovered and was thought to be caused by building work next door, however, no party had taken responsibility to provide confirmation of the protection works insurance after request was made by the neighbour.  It turned out that the requisite insurance almost certainly did not exist.

Fortunately, in such circumstances an adjoining owner is able to rely on the rights found in section 98 of the Act. This section states that:  “An owner must compensate any adjoining owner or adjoining occupier for inconvenience, loss or damage suffered by the adjoining owner or adjoining occupier in connection with the carrying out of protection work under this Part.”  Naturally, the adjoining owner has this right under s98 in terms of the protection work, and civil rights for compensation in regard to any damage caused by the building work.

For legal advice and assistance about building regulations and your rights and responsibilities with regard to protection works and adjoining property disputes, do not hesitate to engage construction law practitioners who are well versed in this area of law.

Disclaimer

This article is not legal advice and discusses it’s topic in only general terms. Should you be in need of legal advice, please contact Lovegrove & Cotton Lawyers and our experienced lawyers will assist you based on the facts and circumstances of your case. Should you be in need of legal advice please consult a construction law firm.

Written by Justin Cotton, Director, Lovegrove & Cotton – Construction and Planning Lawyers

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. Justin Cotton is a leading Australian construction lawyer and widely respected in the building fraternity as evidenced by his appointment as Chairperson of the HIA Industrial Relations and Legal Services Committee, and member of the Regional Executive Committee, for HIA Victorian Chapter. Likewise, Doyles Guide ranks Kim Lovegrove as one of the leading construction lawyers in Australia. 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.