- The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 imposes greater obligations on developers and introduces significant investigative and enforcement powers for the NSW Government.
- Developers are now obliged to notify the Secretary of the Department of Customer Service of the expected completion date of building work.
- NSW Government has greater power to investigate building work and developers, as well as the power to issue prohibition orders, stop work orders and rectification orders.
The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (‘the Act’) is the second of a two-punch combination by the NSW Government to address the much-reported NSW building crisis. The purpose of the Act, which follows the Design and Building Practitioners Act 2020, is to prevent developers from carrying out building work that may result in serious defects, or result in significant harm or loss to the public or current or future occupiers of residential apartment buildings. That is, the Act is largely directed at developers and applies to residential apartment buildings (as well as mixed use developments with a residential component).
The Act comes into force on 1 September 2020 and currently applies to both incomplete developments and developments completed within the previous 10 years.
The Act will likely have a significant impact not only on developers and residential apartment owners, but also on third parties such as certifiers.
The definition of developer in the Act is wide ranging and includes, for example, any person who arranges for, facilitates or otherwise causes (directly or indirectly) residential apartment building work to be carried out. It also includes owners of the land on which the building work occurs and principal contractors as defined in the Environmental Planning and Assessment Act 1979 (NSW).
Completion of residential apartment building work
The Act establishes a notification scheme (‘the Scheme’) which requires developers to notify the Secretary of the NSW Department of Customer Service (formally the NSW Department of Finance, Services and Innovation) (‘the Secretary’) as to when building work will be completed. The Scheme is the first of its kind in Australia.
Section 7 of the Act requires developers to notify the Secretary at least six months, but no more than 12 months, before an application for an occupation certificate is made (‘Expected Completion Notice’).
For projects that are expected to be completed within six months, the developer must provide the Secretary with an Expected Completion Notice within 30 days of the commencement of the building work.
Some flexibility has been provided under s 8 which allows for the amendment of the expected date provided to the Secretary should the circumstances of the building work change. That is, a developer is permitted to amend the expected date as long as an ‘Expected Completion Amendment Notice’ is provided to the Secretary within seven days of the developer becoming aware of the change in circumstances that affect the original expected date. A developer may provide the Secretary with more than one Expected Completion Amendment Notice.
Section 8 does not apply if the new expected date is within 60 days of the original expected date specified in the Expected Completion Notice.
Pursuant to s 9 of the Act, the Secretary may prohibit the issue of an occupation certificate in relation to a residential apartment building (‘Prohibition Order’) and, if relevant, the registration of a strata plan in relation to a residential apartment building if:
- the Expected Completion Notice, or the Expected Completion Amendment Notice, was not given or was given less than six months before the application for the occupation certificate was made;
- the Secretary is satisfied that a serious defect in the building exists; or
- any applicable building bond required under s 207 of the Strata Schemes Management Act 2015 has not been provided to the Secretary.
Prohibition Orders will not only affect developers but will also prevent certifiers from issuing occupation certificates in relation to building work the subject of a Prohibition Order. Any occupation certificate issued in contravention of a Prohibition Order is invalid.