Class 2 Amendments- NSW

CLASS 2 REFORMS

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RESIDENTIAL BUILDING REFORMS

The residential building industry reforms came into affect on the 1st of July 2021. These reforms are designed to provide homeowners with much needed assurance from the increasingly deteriorating quality standards which is becoming rife in the industry.

WHY ARE THESE REFORMS IN PLACE.

The massive surge in development is a response to the growing demand in the New South Wales region. Population forecasts from the department of planning show that NSW is expected to grow on average by over 100 000 people each year until 2041.

In response to this forecasted growth massive infrastructure projects are being undertaken from the revitalising of Parramatta & Sydney CBD, Badgery creek airport, Sydney metro as well as many other infrastructure projects that can be seen on your council local infrastructure growth schemes.

As a result of this growth many developers took advantage of this sudden demand for housing. In these boom times, there is significant market pressures to build quickly and cheaply. This approach, as can be seen in the below examples, comes at a cost of quality.

HOW MANY BUILDINGS ARE AFFECTED:

Thanks to the Opal tower and the mascot towers debacle, which has had massive implications to the each of the residence, brought a spotlight to a serious issue facing the construction sector.

Almost 40% of new apartment buildings in NSW have serious defects a new survey has shown that was completed by 1400 strata managers of residential buildings of 4 stories and higher. The survey was completed in collaboration between the office of the NSW building commissioner and the states peak strata body.

WHERE THE ISSUES ARISE

In lieu of a proper governing body to oversea commercial developments, developers actually owe few legal obligations once the apartments are sold.

However the rise in defects can be a result of the following:

I) Incomplete construction documentation being used to build. This design as you go mentality results in poor design coordination, construction and a lack of control of a project.
II) Deviation from construction designs not being properly documented and reviewed by the appropriate engineers.
III) Lack of quality control measures during the construction process.
IV) Privatisation of the PCA body of the industry creating a relaxed certifying body which
V) Disregard / relaxed consultant engineer inspections in regards to the actual construction of the space ensuring what is designed is being built.
VI) Oversight from the builder in regards to the process prioritising speed of construction over key quality inspections.
VII) Lack of documentation control through the construction process from construction, handover and maintenance of a building.

These reasons create a lack of accountability for the developers who are preying on unsuspecting new home owners who are investing in there future. Not all developments fall in the above category but from recent surveys if 40% of all new developments are experiencing major defects, something needs to change in the industry.

WHAT IS A CLASS 2 BUILDING:

A class 2 building are apartment buildings. They are typically multi unit residential buildings where people live above and below each other. It can also be a building that contains 2 more sole occupancy units.

In addition, mixed use buildings containing a class 2 component such as where there are commercial spaces attached to the building (such as on ground floor) will fall under this class 2 ruling.

DESIGN AND BUILD PRACTITIONERS ACT.

On 1st of July 2021 the design and building practitioners act and regulation become active. The act is currently focusing on class 2 buildings that are typically multi-unit, multi storey residential buildings where people live above and below each other.

The act will expand to reforms to other classes of construction in the future. The main changes are outlined below in regard to Class 2 buildings:

Ø Architects, Engineers and Design and build practitioners are required to register through the planning portal. Only
Ø Declared designs need to be lodged on the NSW planning portal. A declared design requires a full construction pack of documentation that has been reviewed and declared for compliance against the building code of Australia.
Ø Only the individual declaring the documentation for approval is required to register. However the declared designs must be declared by a class 2 registered practitioner.
Ø All variations to the work must be declared for compliance through the council portal. The practitioners must be class 2 registered to declare the documentation and submit it through the council portal. This must be done within 1 day of completing the construction works.
Ø Any variation works after an OC has been submitted must also be submitted to council as declared plans.
Ø Any practitioner failing to make a declaration or who makes a declaration when unregistered will face a maximum penalty of $165 000 as a body corporate or $55 000, in any other cases.
Ø Any practitioner that knowingly makes false or misleading declaration will face a maximum penalty of $220 000 and/or two years imprisonment.
Ø All required applications are to be administered through the planning portal before an OC can be submitted.

CONCLUSIONS

These new measures are an attempt to stem the impact poor quality construction is having on a growing city. It is a necessary policy that is required to ensure that homeowners are protected from putting there life savings into a home that may be subject to hundred of thousands of rectification due to poor quality control and management and unqualified builders.

We will wait and see how these policies, with the building commissioner David Chandler at the helm, will reform the industry.