Design and Building Practitioners Act 2020

19 Oct Design and Building Practitioners Act 2020

The Design and Building Practitioners Act 2020 (‘the Act’) introduces wide ranging regulatory changes to the building industry.

Part 2 of the Act, which will come into effect on 1 July 2021, requires design practitioners and building practitioners to make compliance declarations to the effect that their work complies with all requirements and makes them liable for disciplinary action for inaccurate compliance declarations.

Building practitioners and design practitioners will be required to have insurance.

Part 5 requires registration for building practitioners, design practitioners, engineers, and specialist workers.

Section 37 of Part 4 of the Act, which creates a general duty of care on building practitioners, came into effect on 11 June 2020. This section provides:

(1) A person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects—

      (a) in or related to a building for which the work is done, and

      (b) arising from the construction work.

(2) The duty of care is owed to each owner of the land in relation to which the construction work is carried out and to each subsequent owner of the land.

(3) A person to whom the duty of care is owed is entitled to damages for the breach of the duty as if the duty were a duty established by the common law.

(4) The duty of care is owed to an owner whether or not the construction work was carried out—

       (a) under a contract or other arrangement entered into with the owner or another person, or

       (b) otherwise than under a contract or arrangement.

Section 5 of Schedule 1 to the Act relates to the application of duty of care provisions to existing buildings and contracts and arrangements. It provides:

(1) Part 4 of this Act extends to construction work carried out before the commencement of section 37 as if the duty of care under that Part was owed by the person who carried out the construction work to the owner of the land and to subsequent owners when the construction work was carried out.

(2) Subclause (1) only applies to economic loss caused by a breach of the duty of care extended under that subclause if—

      (a) the loss first became apparent within the 10 years immediately before the commencement of section 37, or

       (b) the loss first becomes apparent on or after the commencement of that section.

“Construction work” includes building work within the meaning of residential building work in the Home Building Act 1989. “Residential building work” means any work involved in, or involved in co-ordinating or supervising any work involved in the construction of a dwelling, or the making of alterations or additions to a dwelling, or the repairing, renovation, decoration or protective treatment of a dwelling.

Multi storey buildings (over three stories) are exempt from Home Owners’ Warranty Insurance requirements – provided for in regulation 54 of the Home Building Regulation 2014 – but this does not affect the liability under the retrospective duty of care provided for by section 37 of the Act.

Accordingly, the duty applies to defects that became apparent in the ten years before 11 June 2010 BUT it is in turn subject to section 6.20 of the Environmental Planning and Assessment Act 1979 which provides that a building action may not be brought in relation to any building work more than 10 years after:

1. the date on which the relevant final occupation certificate was issued (or if an occupation certificate is not required, the date on which the compliance certificate was issued) or
2. the last date on which the building work was inspected by a certifying authority, or
3. if no such inspection has been conducted, the date on which that part of the building in relation to which the building work was carried out, is first occupied or used.

The section is subject to the Limitations Act 1969, which provides in section 14(1) that an action in respect of breach of statutory duty is not maintainable if brought after the expiration of a limitation period of six years from when it first accrues.

For further information or queries relating to this article, please contact Grant Hansen  on +61 2 9261 8533.