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Following its report into the regulation of building standards, quality, and disputes, the Public Accountability Committee has released its final report last week.

The Committee has made wide-ranging recommendations targeting New South Wales’ building and construction industry, from the Building Commission down to individuals.

Cladding safety issues

The reports and recommendations come on the back of the Lacrosse Tower fire in Victoria and systemic building defects in NSW as evident in the Opal and Mascot Towers, giving impetus to the NSW Government’s action.

The Committee addressed a range of issues in the report such as flammable cladding, powers of the Building Commissioner, role of strata committees, private certification, and the professional indemnity insurance crisis.

The dangers of flammable cladding required comprehensive action therefore the recommendations in relation to flammable cladding, if implemented, would:

  1. impose obligations on Government to fund the rectification of buildings with flammable cladding and to prevent the use of flammable materials in the construction industry, and
  2. impose obligations on owners, landlords and real estate agents to warn potential buyers and tenants of flammable cladding and the progress on rectification works.

Genuine purchasers and potential tenants will also be able to obtain information about the cladding status of a property.

Building Commission and the Commissioner’s role

The Committee also recommended granting the Building Commissioner full statutory powers to regulate the industry, noting that the Building Commissioner currently lacks powers to take proactive steps to respond to complaints. The Committee recommended this issue be dealt with urgently when Parliament reconvenes this month.

Many strata committees, and even some licenced strata managers, do not have the required knowledge and experience to identify and rectify defects in a timely manner. The Committee suggested that a Strata Commissioner sits within the Building Commission to provide support for strata committees, and for the NSW Civil and Administrative Tribunal to review the dispute resolution processes for strata related disputes. Similar strata reforms have also just come into force in Western Australia, making Western Australia’s State Administrative Tribunal a ‘one-stop-shop’ for strata disputes.

New legislation

Whilst the Committee did not at this time recommend returning all certification to local councils, it considered that changes were necessary to the certification system, such as undertaking a review of the mandatory critical stage inspection regime under the Environmental Planning and Assessment Act 1979, undertaking regular audits of the work of building certifiers, and setting up controls to mitigate conflicts of interest between building certifiers and building practitioners.

In light of the professional indemnity insurance crisis, the Committee reiterated their recommendations in their First Report that before passing any legislation requiring building practitioners to take up professional indemnity insurance, the Government should work closely with the Insurance Council of Australia and its members to provide appropriate insurance products.

These recommendations are significant and if the Government adopts them, will require substantial resourcing and cooperation to implement. We will keep an eye out for the Government’s response, which is due in six months.

Although no issues of the Lacrosse Tower or Opal Tower magnitude have arisen in Western Australia yet, it will also be interesting to see if the Western Australian Government will adopt any of these wide-reaching recommendations in the future.

How HHG can assist

HHG Legal Group has been proudly serving Western Australian businesses, families and individuals for over 100 years and we are committed to supporting the communities in which we operate.

If you operate in NSW and have a question in relation to these recent report recommendations, please contact Murray Thornhill of our Building & Construction team on 1800 609 943 or submit an online form and we’ll call you back.

This information serves as a general guide and does not constitute legal advice. It is based on our research and experience at the time of publication. Please consult our knowledgeable Legal Team for any specific inquiries or advice relevant to your circumstances, as the content may not have been updated subsequently.