Last week the Minister for Planning, the Hon Richard Wynne, introduced the Building Amendment (Registration of Trades and Other Matters) Bill 2018 into the Victorian Parliament. The Bill makes numerous, significant changes to the building regulation scheme in Victoria. The key reforms in the Bill are:
- that trade contractors and employees doing ‘restricted’ domestic and commercial building work will be required to be registered:
- amendments to support the state-wide cladding audits including:
- a power to ban high risk external wall cladding products;
- changes to facilitate collaboration between the VBA and municipal and private building surveyors in cladding audits;
- changes to enforcement powers following the decision of the Supreme Court in the LU Simon case in 2017;
- enabling building owners to apply for low cost loans to fund cladding rectification works; and
- swimming pool and spa owners will be required to register their pools with councils and to inspect pool barriers and have them independently approved periodically.
Registration of trade contractors
Amendments to the practitioner registration scheme will require trade contractors and employees carrying out ‘restricted building work’ to hold a licence or registration. The scope of ‘restricted building work’ will be prescribed by the regulations. However, the Minister stated in his second reading speech that the ‘priority areas’ for consideration are carpenters, plasterers, footing and foundation workers, bricklayers and water proofers.
Those sub- contracting, i.e. trade contractors, will need to hold registration and will be able to perform work and enter into subcontracts or contracts directly with owners. Those employed by a person holding registration will need to have a license and will be entitled to carry out work but not to enter into contracts or perform other business functions.
The transitional process will be as follows:
- contractors or employees carrying out ‘restricted building work’ will be given 12 months from the commencement of the scheme (likely to be September 2020) to apply for provisional registration or licence;
- provisional registration will allow the person to carry out the restricted work but not to enter contracts or perform other business functions;
- those that are given provisional registration or licence will have 5 years to attain any necessary qualifications to be eligible for a full licence or registration;
- those that do not seek provisional registration or licence within the first 12 months after the commencement of the scheme will only be able to apply for a full licence or registration.
The full detail of who will need to seek registration, what qualifications, experience or other requirements will apply to different types of work, and how the transitional process will operate will be set out in regulations which will be subject to consultation through a regulatory impact statement.
The Minister stated clearly that the new scheme was not intended to alter common law obligations on builders to be responsible for the work of their employees and/or subcontractors. He said that where a builder is the subject of disciplinary action in relation to a failure to ensure compliant work, any sanction should not be diminished merely because a licensed employee or registered trade contractor might share some responsibility for defective work. The intention is that by making employees and trade contractors also able to be subject to disciplinary action, this would assist builders or head contractors by making the trade contractor accountable. In addition, by requiring registration or a licence, this ensures those performing the work hold minimum skills and experience which should increase existing levels of competence across the industry.
Amendments relating to the state-wide cladding audits
New power to ‘ban’ high risk cladding products
The Minister will have a new power to declare that a high-risk external wall cladding product is prohibited from begin used (new section 192B). The new power will not apply to any other building products. The new power will be more robust than the current power used to issue Ministerial Guideline 14 in March 2018. It will be an offence not to comply with a ‘ban’ issued under the new power.
Proposed ‘bans’ are to be published on the internet 48 hours before they are published in the Government Gazette and the Minister will have a discretion to seek submissions before making any ‘bans’.
Powers in relation to municipal and private building surveyors
There are 3 changes in relation to powers the Minister and VBA have concerning the functions of municipal and private building surveyors, all of which appear to be aimed at enabling collaboration between the VBA and municipal and private building surveyors as part of the state-wide cladding audits.
1. Minister will be able to issue directions relating to the functions of municipal or private building surveyors (new section 188AA). The second reading speech does not explain what sorts of directions might be made under this new power. However, the Minister does say that government will expect municipal and private surveyors to use their powers under Part 8 to work in collaboration with the VBA to address the state-wide cladding issue so perhaps this new power will be used to articulate those expectations. Such directions need to be published in the Government Gazette and the failure to comply with a direction will be a ground for disciplinary inquiry. This new power will be in addition to the existing power the VBA has to issue a direction or recommendation to an individual municipal or private building surveyor under section 205M;
2. The power under section 205M will be amended so that instead of giving the municipal or private building surveyor 14 days-notice of the intention to issue a direction, the VBA will only have to give 7 days-notice OR if a high risk external wall cladding product is involved, no notice will be required. The Minister says the VBA will have a clear ‘operational escalation pathway’ setting out when it will use this power.
3. The current power in section 190, for the Minister to declare the VBA to be the municipal building surveyor, will be amended to allow the declaration to be made in relation to a class if building, a class of building work or class of land. The Minister states that this will allow the VBA to be declared the municipal building surveyor for multiple buildings that are the subject of the state-wide cladding audit.
Amendments in response to the LU Simon decision
In response to the Supreme Court’s decision in LU Simon in December 2017 (where the court held that a ‘direction to fix’ could not be issued to a builder after an occupancy permit had been issued), the Act will be amended to clarify that a building notice or order can be issued by a ‘private building surveyor’ after an occupancy permit or certificate of final inspection has been issued (new section 107(2)).
The government has stopped short of providing for directions to fix to be issued to builders after an occupancy permit has been issued. However, section 104 will be amended to provide that an emergency order can be issued to an owner or builder requiring them to arrange for a specified building product or material to be to be subjected to destructive testing and provide the results to the municipal building surveyor.
Funding cladding rectification works through Cladding Rectification Agreements
The Bill amends the Local Government Act 1989 to allow building owners to access low-cost finance to fund cladding rectification works.
The scheme will be voluntary and enable low-cost loans to be repaid via the council rates system over at least 10 years. Where a property is sold, the new owner will take over the repayments. The loan will take precedence over any mortgage and there will be controls over debt levels so that the total amount of taxes, rates, charges and mortgages owning on the land when added to the total value of the rectification charge does not exceed the estimate capital improved value of the land at the conclusion of the works.
Apparently, councils have indicated support subject to receiving financial support or incentives from the state regarding administration and other costs.
Pools and spas
- Increased regulation in relation to the safety of pools and spas is being introduced in response to recommendations from Coroners. The new requirements will be set out in regulations which will be created following a regulatory impact statement process. No time frame is given for how long this may take. Key features of the scheme will be:
- councils will hold a register of pools and spas in their municipality;
- owners will be required to undertake a self- assessment of their pool barrier;
- in certain circumstances or at certain intervals, an inspection and approval by an independent swimming pool barrier inspector will be required. A new category of registration will be established for swimming pool barrier inspectors.
Pending the new regulations, the VBA will establish a voluntary register and provide owners will guidance and checklists on how to undertake a self-assessment of their pool barrier.
Other matters covered by the Bill
There will be a new power to take disciplinary action where a builder does not comply with the ‘dispute resolution order’ issued under the Domestic Building Dispute Resolution Victoria process. Currently the builder can seek a review of the decision to issue and dispute resolution order in VCAT. If the builder does not comply with the order or seek a review, disciplinary action can be taken, and the builder’s registration must be suspended or partially suspended within 28 days.
There will be a continuing professional development scheme introduced for plumbers. Details of the scheme will be set out in regulations.
Other minor changes deal with what happens if an owner-builder sells a property before the building work is complete or where a builder does not complete building work.