Page 2159 - Week 07 - Tuesday, 2 August 2016
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comprehensive building inspection and audit process; improve licensing requirements for builders and building surveyors; provide better information for consumers and practitioners; and establish stronger, more comprehensive standards of practice and contracting.
This bill is one of the first steps in implementing the reforms. To borrow a building phrase, which I think is appropriate in this case, the bill includes amendments that will lay the foundation for a stronger and more responsive system. Amendments range from major reforms to smaller technical and minor amendments which are all part of maintaining building and construction legislation and keeping relevant over time.
One of the most significant changes in the bill is to expand statutory warranties to all buildings used primarily for private residential use. Since statutory warranties were first included in building laws, they have only applied to residential buildings of three storeys or fewer, excluding any storey for car parking. This was based on an assumption that the conditions, building and risk management practices in the medium-high residential sector were significantly different from and more advanced than those in the low rise sectors. It was also expected that a form of warranty was implied for all buildings, even when not expressly stated in law.
All indications are that even if these assumptions were relevant once, they are no longer relevant today. In addition, a recent High Court of Australia decision has not supported the assumption that there is an implied warranty. Therefore, the primary policy and legal issue is whether the Assembly intends all owners in buildings used primarily for residential use to have the same warranty protections under the law regardless of the height of the building. This bill gives the Assembly the opportunity to show that they do.
The warranty is six years for the structural elements of the building and two years for the non-structural elements. Given that the expected life of a building is decades, this is not an unreasonable expectation of builders.
It is important to note that the provisions in the bill do not, and are not intended to, affect the residential building insurance scheme. Under the reform program, the government will undertake further consultation on other protections in the building regulatory system, including insurance.
Many of the amendments relate to improving protections for people who use or provide construction services from unfair or disreputable practices. While there are some people who close one business and start another having met all of their liabilities, there are others who deliberately shut down a business to avoid them, only to set up another and keep operating. This is known as “phoenixing”.
As people may know, stamping out phoenixing in the building industry is a particular interest of mine, but it is not the only issue we need to address. People may also establish multiple entities and multiple licences from the start and move operations from licence to licence if one licence has a rectification order or a serious disciplinary action against it. In addition, if the licensee loses their eligibility, they may continue to operate for months without being entitled to.
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