Article Category - Property and Conveyancing 17 July 2020

Recently, the Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020 passed both houses of the NSW Parliament. The Bill contains new laws to prevent serious defects in residential apartment buildings, in response to recent high-profile cases of serious defects such as the Opal Tower and Mascot Tower.

Despite these high-profile cases being exclusively related to larger apartment developments, the new legislation will cover all apartment developments, regardless of size, making it very relevant for developers of smaller apartments in the Central West.

Essentially, the new laws will apply to class 2 buildings as defined by the Building Code of Australia, and these are typically multi-unit residential buildings where people live above and below each other. This includes a small-scale two-storey apartment development – even something as simple as a two-unit development where one unit is located above the other.

Under the legislation, the Department of Customer Service will have the power to issue a rectification order if they believe that there is a serious defect in the building work (such as the use of banned building products like combustible cladding).

Developers will be required to provide the Department of Customer Service with at least 6 months' notice before they can apply for an Occupation Certificate for newly-built apartments, and this provides the Department with its window of opportunity to inspect the building (before people start moving in) and to issue an order to rectify certain defects if it so chooses.

If a developer tries to obtain an Occupation Certificate without having given the required notice, it will be an offence. For a sole trader developer, the maximum penalty will be $22,000, but for body corporates (such as companies) the maximum is a whopping $110,000.

The legislation comes into force on 1 September 2020, so it is important that developers start preparing now, by reviewing their internal processes and identifying any builds-in-progress and/or proposed builds that will be affected.

If you are a developer and require assistance to understand your obligations under these laws, please do not hesitate to contact our Property & Commercial Law team on 1800 650 656. We're here to help!

Aaron Strickland | Solicitor