Western Australia

Recommendations for reforms to building regulation released in December 2023

In late December 2023, the WA government published recommendations for reforms to the state’s building regulatory regime.  The details of the recommendations are set out in over 350 pages of a Decision Regulatory Impact Statement entitled Building Better: Reforms to WA’s Building Regulatory Framework (DRIS).

The expectation is that the recommendations will be adopted by the WA government and reflected in legislation to be introduced into the WA Parliament some time in 2024.  If passed, the reforms will then take effect in 2025 or 2026.

The introduction to the DRIS states:

The DRIS recommends ambitious reforms are made to the building regulatory framework if WA is to implement many of the recommendations of the Building Confidence Report.  Not all reforms have universal support of stakeholders, but are considered necessary if Government is to improve compliance with building standards, promote confidence in the built environment, and move away from what is often described as the ‘lightest touch’ regulatory framework in Australia.

Volume 2 of the DRIS sets out the outcomes of a very detailed cost benefit analysis process aimed at ensuring the proposed reforms are justified and do not impose unnecessary burden on the building industry and consumers.  The DRIS states that over a 10 year period the net economic benefit to the WA community, largely from the avoidance of major defects in buildings, will be $453 million.

Each of the recommended reforms received high levels of support from stakeholders in the consultation process that led to the DRIS.  It is expected that having published the recommendations the WA government will now move to prepare and introduce legislation. This process will be slow. According to the DRIS the reforms will not begin to take effect until 2026 and implementation will be phased through to 2027 and beyond.  It is said this time is needed to build capacity, particularly to conduct the new mandatory inspections that will be required. Whilst this concern may be valid, businesses are unlikely to build capacity many months or years before it is needed. With the implementation of automatic mutual recognition, there is the potential that businesses from other jurisdictions will look to offer services in WA if the demand is there.

The very slow pace of reform in WA can be contrasted with the pace in NSW, where over a 4 year period that state has introduced and implemented significant reforms, some of which are similar to those proposed for WA.  One wonders why a greater sense of urgency is not apparent in WA.  Stakeholders support the reforms, there is precedent for them in other parts of the country, the DRIS acknowledges the inadequacies in the current system and there have been persistent media reports about poor quality construction in WA.  Many of these reports have concerned class 1 dwellings.  The reforms proposed are unlikely to bring much needed change to that sector for another 3 or 4 years.  A better way to approach this might be to implement the reforms more promptly but ensure there are high levels of education and support for the first 3-6 months before embarking on audit and enforcement of the new laws.  That way the demand is there to support increased capacity and business transition.

These reforms could have gone further and could be implemented quicker but they are comprehensive and the WA policy makers are to be commended.  This body of work gives well considered advice to the WA government on how to improve outcomes for industry and consumers in WA.

In this document further detail about the reforms is given below.  But, for those looking for just a snapshot the Department’s Building Better: WA Regulatory Reform Map is a good start. The map sets out briefly the 8 reform areas covered by the DRIS namely:

• mandatory inspections;
• improvements to the adequacy of design documentation;
• mandatory third party review of structural and fire safety design;
• increased integrity controls for the appointment of private building surveyors;
• formal requirements for the approval and documentation of variations;
• building manuals;
• increased penalties and enforcement powers; and
• tiered registration for builders.

More detail

For those wanting more detail, you can read on under the following headings

• Design Reforms
• The role of the Building Surveyor
• Mandatory Inspections
• Variations
• Building Manuals
• Other notable changes

Design Reforms

At present the WA scheme does not require designs to be prepared by registered design practitioners or have any requirements around the standard of documentation that must be in place before building work is carried out.  Although persons wanting to call themselves architects must be registered in WA, there is no requirement to engage an architect to prepare drawings.  A new scheme for the registration of engineers will commence in 2024.

The proposed reforms will do 4 main things:

1. Set out prescribed minimum requirements for design documentation;
2. Establish registration requirements for other design practitioners. The categories of registered designers will be subject to consultation but the government will be guided by the National Registration Framework for Building Practitioners which provides for architects, designers/draftspersons, engineers, plumbing, fire systems, disability access and energy efficiency consultants.
3. Require registered design practitioners to declare that their documentation meets minimum requirements. This will require them to understand the requirements of the NCC rather than rely on the statutory building surveyor who should be conducting an ‘independent’ assessment of completed documentation; and
4. Require that structural and fire safety designs are independently reviewed by a third party where they related to the construction of class 2 buildings over 25m in height (ie apartment buildings over about 8 storeys). The reviewer will likely need to have 10 years’ experience in the area of design they are reviewing, they will be paid for by the owner and their role will be advisory.

These reforms will see WA going from having virtually no regulation of the building design process to having best practice regulation for design work relative to other Australian jurisdictions.  A summary of how these reform compare to other jurisdictions is set out below.

Design reforms proposed for WA	Comparison with other jurisdictions
Prescribed requirements for plans and specifications to set out clearly what ‘adequate design’ should look like	NSW, Tas and the ACT have taken a similar approach
Mandatory independent third party review of structure and fire safety designs for class 2 buildings over 25m	NT has introduced mandatory independent third party review for structural design for ‘complex’ buildings
Registration of general building design practitioners	Qld, Vic, NSW, Tas register a range of categories of design practitioners (in addition to architects and engineers)
Certificates to be signed by building designers declaring plans and specifications will comply with building standards, applicable to class 2 buildings initially	NSW has this for class 2, 3 and 9 buildings

The role of the Building Surveyor

The WA model for privately appointed building surveyors is different to other jurisdictions in that all building permits are issued by local councils, referred to under the scheme as the Permit Authority.  An applicant may submit a certified or an uncertified application for a building permit.  Uncertified applications can only be made for proposed building work for class 1 and 10 buildings.  These are assessed in detail by the Permit Authority.  Certified applications are those that have been certified as meeting required standards by a privately appointed building surveyor.  Certified applications must be determined by the Permit Authority within 10 days and although the Permit Authority can undertake a substantive review of the application, they are not required to and in most cases they don’t.

Under this model, because there is no requirement for registered architects, designers or engineers to prepare documentation, it is common for the privately appointed building surveyor to form part of the design team and input into the design.  Where this occurs there is no independent assessment of design by the private building surveyor and because councils don’t tend to review certified applications in detail or at all, the system does not require independent assessment of design.  The privately appointed building surveyor’s appointment can be terminated at any time, allowing a builder or developer to ‘shop around’ for a building surveyor with the most favourable approach to compliance.  These features mean that notwithstanding that WA has not moved to allowing for privately appointed building surveyors to issue building permits like most other jurisdictions, conflicts of interest and lack of independence pervade the WA model.

For those interested in the various reviews that have been conducted in Vic, NSW, Qld and the UK into the privatisation of building surveying, the DRIS pages 63-67 of Volume 1 provides a nice summary.  These reviews consistently highlight the inherent conflict of interest in these models and discuss the challenges involved in reverting back to a council only process.

Under the WA reforms it is recommended that the statutory building surveyor be appointed by the landowner and their contract with the landowner will not be able to be novated to the builder.  The builder will be able to act as agent for the owner when engaging with the appointed building surveyor.  However, notwithstanding any agency, copies of documents such as advice from the fire authority, inspection reports and compliance certificates will have to be sent directly to the owner. The Building Commission will also publish suggested contract templates for use to appoint building surveyors.

It is recommended that for certified applications, it be mandatory for a private building surveyor to be appointed for the whole job.  Where that appointment is terminated, a notice of termination with reasons will need to be lodged with the Permit Authority and Building Commission.  The government says they will monitor these notifications to see whether more stringent controls on termination (which exist in many other jurisdictions) should be introduced.  The legislation will also state that the building surveyor must act in the public interest and that payment must not be conditional on the issuance of a report, certificate, permit or other document.

These measures to improve the independence of building surveyors will bring WA closer to the controls that already exist in most other Australian jurisdictions but they do not alter the key features of the WA model which as noted above, lacks adequate provision for the independent assessment of design.

Mandatory Inspections

WA is the only jurisdiction in Australia that does not presently mandate independent inspections of building work during construction.  SA comes a close second requiring at least one onsite inspection by councils of 90% of class 2-9 buildings and 66% of class 1 buildings (See Practice Direction 9).

Despite the hesitation of the WA government to introduce this reform, there was overwhelming support for inspections in response to the public consultation on this issue.  It is proposed to phase in mandatory inspections starting with class 2-9 buildings of 4 storeys or more, followed by class 2 -9 buildings of up to 3 stories and finally, extending the requirement to class 1 buildings.  The requirements will only apply to new builds, so presumably not to renovations, change of use or fit outs.

There will be prescribed stages for inspections but the appointed building surveyor will be able to add inspections requirements when issuing the building approval.  It is also proposed that the range of prescribed inspections will be increased over time as capability is developed.  The list of proposed inspection stages is found in Volume 1 of the DRIS at page 105 and will initially include structural elements, fire protection of service penetrations, fire systems and final inspections.  Later, inspection of waterproofing elements will be introduced.

It is proposed that if the building surveyor does not inspect or arrange an inspection within a specified timeframe the builder must notify the Building Commission and they will be entitled to a refund of any inspection fees already paid for.

The building surveyor may inspect any element of the work and there will be directions and forms published by the Building Commission regarding documentation of inspections.  If the work is compliant, it may proceed.  If it is not, the building surveyor will issue a written direction detailing the non-compliance, work required to remedy the issues and the required timeframe.  The builder will not be able to seek the cost of complying with a written direction from the owner.  Where the builder does not call for a mandatory inspection, attempts to inspect later can be made (including to have work opened for inspection), the Building Commission must be notified and the failure to call will be noted on the completion documents.

The DRIS does not set out what will occur if work is not compliant and written directions are not followed. Presumably, this conduct will be referred to the Building Commission or Permit Authority for enforcement.

The mandatory inspections will be conducted by the appointed private building surveyor or by someone the surveyor determines is a ‘competent person’.  Competent persons must be determined and agreed to by the appointed building surveyor before an inspection.  They can include design engineers appointed by the developer or builder. The legislation may prescribe that specified elements of construction can only be inspected by persons registered in specified categories of registration.  For example, only registered structural engineers will be permitted to inspect structural elements of work.  Competent persons will not be able to be the person that carried out the work. There will be an exception for class 1 buildings where it is proposed that wet areas will be able to be certified by the waterproofing contractor. There may also be provision for remote inspections managed by the builder to occur in some rural and regional areas of the state.

To support the role of ‘competent persons’ the legislation will provide that engineers registered in appropriate categories can issue compliance certificates which may be relied on by building surveyors and Permit Authorities.  When issuing certificates the engineers must act in the public interest.  Presumably, the types of certificates that engineers will be able to issue will be design compliance, inspection compliance and for independent third party review.

Variations

There will be a legislated process for how variations, post the issuing of a building approval, must be managed and documented.  This will include requirements for revised approvals and documentation process based on whether a variations is ‘minor’ or ‘major’.  Guidance on these terms is to be developed and provided by the Building Commission following consultation.  Volume 1 of the DRIS (page 122-127) discusses in more detail the proposed process for variations including clear obligations on the builder to seek approval and submit revised documentation to reflect variations including product substitutions, proposed performance solutions, design changes and departures from approved design.  The DRIS recognises that this will be a significant cultural shift for the industry given present practices are to rarely seek approval for or document changes post the issuing of a permit.

Building Manuals

WA will become the fourth jurisdiction to require a building manual to be provided upon completion of some types of building work.  NSW and Vic have legislated this requirement but are yet to switch it on and the ACT’s Property Developer Bill 2023 (not yet passed) also includes this requirement.  In WA the requirement will only be for class 2 buildings over 3 storeys but this may be extended to other types of buildings in the future.  It will be the responsibility of the builder to prepare the building manual which must be approved by the appointed building surveyor in order for an occupancy permit to be issued by the Permit Authority.  The information that must be in a building manual will be prescribed and is set out on page 132-134 of Volume 1 of the DRIS.  It includes site and design information as well as the developer and practitioners involved, compliance documents and maintenance information.  The builder will be required to provide a copy of the building manual to the strata corporation in a digital format.  The strata corporation will be responsible for keeping and updating the manual in accordance with prescribed requirements.

Other notable changes

Fire authority role – The advisory role of the fire authority is proposed to be strengthened by ensuring any report they issue on a proposed design is provided directly to the landowner for their information.  Early engagement with the fire authority will be encouraged and the statutory building surveyor will be required to respond to comments from the fire authority regardless of whether the fire authority’s report is given before or after a building approval has been issued.

Completion requirements – Currently in WA, the approvals process for class 1 buildings requires the builder to issue a notice of completion (NoC) to the Permit Authority as the final step.  For class 2-9 buildings the builder issues a NoC, then a building surveyor (not necessarily the one that certified the building permit application) must issue a certificate of construction compliance (CCC).  The NoC and CCC are given to the Permit Authority who may then issue an occupancy permit (OP).

It is recommended that both the CCC and OP include maintenance conditions for essential safety elements of the building.  This requirement already exists is most other jurisdictions. It is also recommended that the CCC/OP process be required for class 1b buildings.  For both the NoC and the CCC (if required) the obligations on the issuer will be strengthened requiring them to declare that the work complies with approved plans and applicable standards.

Enforcement powers – The Building Commission’s powers will be broadened to allow it to issue directions to industry on technical matters.  The Commission’s power of entry will also be strengthened to allow it to enter building sites to conduct inspections without the need for consent. The DRIS emphasises that this will not change the role and responsibilities of Permit Authorities to inspect and undertake enforcement in relation to complaints about building work.  Further to this, it is recommended that the Building Commission be empowered to notify owners and Permit Authorities about ‘seriously non-compliant work’ and to require the Permit Authority to respond to such notifications within 90 days.  The ability for local governments to issue infringement notices for breaches of the Building Act will be expanded and information sharing between councils and the fire authorities will be introduced.  Penalties will also be increased for some types of offences including where builders fail to give a NoC.

Requirements for a building permit expanded – It is proposed to expand the types of building work for which a building permit must be obtained, to include prescribed structures such as retaining walls, swimming pools, viewing platforms, masts and antennae.

Builder’s registration – WA is the only jurisdiction where builders’ registration is not tiered to reflect different competencies to construct different types of buildings.  After consultation on various models, the recommendation is for 2 tiers, namely level 1 – open and level 2 – low rise which will cover any class 1 and 10 building as well as class 2-9 up to 2000m2 of Type A and B only.  Qualification requirements for registration have been proposed which has led to recommendations to remove some of the existing pathways to becoming a registered builder (see p 175-179).  In addition, the monetary threshold for ‘builder work’ (ie work for which a registered building contractor must be engaged) is proposed to be increased from $20,000 to $40,000 but only for class 10a buildings, excluding high-risk retaining walls.  Finally, in relation to builders’ registration the current exemption from the need for registration which applies to specified remote areas of the state will be amended to require registration for any building work in the South West Division and local government districts adjacent to that boundary.

Mandatory CPD – the DRIS recommends introducing mandatory CPD of 7 hours per year. Initially this will apply to building surveyors only. It might then be extended to other classes of building service practitioner.

Disciplinary actions – There are  range of recommendations that go to enhancing the registration and disciplinary powers of the Building Services Board.  This includes increased penalties, expanding the powers of the State Administrative Tribunal and streamlining the complaints and referrals processes.

 

Weir Legal and Consulting

25 Jan 2024