The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (“the Act”) commenced on 1 September 2020. The Act contains provisions aimed to prevent developers from carrying out construction that may result in building defects, which can lead to significant harm or economic loss. This Act and the Design and Building Practitioners Act 2020 (NSW) are reforms to improve the quality of construction and provide better protections for consumers against non-compliance within the building sector.

The Act provides the Secretary of the Department of Customer Services (“Secretary”), who may delegate their role to the Building Commissioner, with the power to issue stop work orders, building rectification orders and prohibit the issuing of an occupation certificate along with implementing various notification requirements for developments of residential apartment buildings.

Stop Work Orders

The Act provides the Secretary with the power to issue a stop work order if building works are carried out in a manner that could result in significant harm or loss to the public or occupiers of the building. The stop works order will remain in force for a period of 12 months from the day the order takes effect, if it is not revoked by the Secretary earlier or if the term of the order was specified to end earlier.

Building Work Rectification Orders (“Rectification Orders”)

The Act empowers the Secretary to issue a Rectification Order to the developer if there is a reasonable belief that the work was or is being carried out in a manner that could result in a serious defect. A Rectification Order is defined under the Act as an order that requires the developer to “eliminate, minimise or remediate the serious defect or potential serious defect”.

A ‘serious defect’ is said to be a failure to comply with the requirements provided under the Building Code of Australia.

A Rectification Order must specify a reasonable period within which the order must be complied with. However, a Rectification Order may require immediate compliance if the Secretary believes that there is a serious risk to health or safety or an emergency.

A building work rectification order must be considered by NSW Civil and Administrative Tribunal (NCAT) for the purposes of determining a building claim under the Home Building Act 1989 (NSW).

Occupation Certificates

The Act now requires a developer to notify the Secretary at least 6 months in advance (but limited to no more than 12 months) prior to that developer applying for an occupation certificate for any part of a residential apartment building.

The Secretary may make an order prohibiting an occupation certificate from being issued in relation to a residential apartment building, and prohibiting the registration of a strata plan for a strata scheme, in circumstances where:

  • the expected completion notice required to be given to the Secretary was not given, or was given less than 6 months before the application for the occupation certificate was made (unless the expected completion notice was duly given); or
  • an expected completion amendment notice of a new expected date required to be given to the Secretary was not given or was given less than 6 months before the application for the occupation certificate was made; or
  • the Secretary is satisfied that a serious defect in the building exists; or
  • a building bond required under the Strata Schemes Management Act 2015 (NSW) has not been given to the Secretary.

The Secretary may be satisfied that a serious defect exists if a Rectification Order was issued and not revoked, or if a development control order under the Environmental Planning and Assessment Act 1979 (NSW) has been issued and not revoked.

Moving Forward

This Act provides an additional range of obligations for all in the building industry and penalties for non-compliance.

For further information about how this legislation may affect you or your business, please contact the team on (02) 9025 0808.