03/11/2021
NEW LAWS & OBLIGATIONS FOR THE BUILDING & CONSTRUCTION INDUSTRY
Are you a builder, designer, contractor, subcontractor, manufacturer of building products or project managers who is or has worked on Class 2 buildings (apartment buildings).
In response to the defective building issues in NSW in the Opal towers and Mascot, on 11 June 2020, the State government enacted new laws in the Design and Building Practitioners Act 2020 (NSW) (the ‘Act’).
The new Act introduced a range of statutory obligations on builders, architects, engineers, contractors and subcontractors and other workers in the building industry.
In summary, anyone who performs construction work will now owe a statutory duty of care to both current and subsequent property owners. In other words, you will remain liable to the owner/s direct even after the project is completed.
In summary the new laws:
1. Create a statutory duty of care owed to owners or subsequent owners by anyone who carries out construction work to exercise ‘reasonable care’ to avoid economic loss caused by defects in or related to a building;
2. The Regulations stipulate that the duty of care provided by the Act operates retrospectively if the loss became apparent within 10 years immediately prior to 11 June 2020, meaning designers and builders on completed projects will now be subject to this duty of care.
3. Require designers, builders and engineers to be registered under a new statutory registration scheme;
4. Establish a scheme for the provision of compliance declarations to be made by designers and builders in respect of their work; and
5. Create a mandatory obligation for registered practitioners in respect of insurance coverage for their work.
Who is the duty owed to?
The duty of care is owed to all owners of the land and to all subsequent owners of the land.
Retrospective operation & limitations periods (10 years)
The duty of care operates retrospectively if the loss first became apparent within the 10 years immediately before the commencement of s 37 i.e and from 11 June 2010. The limitation period – generally a claim must be brought within 10 years of completion of the work (i.e the day on which the occupational certificate was issued).
Restrictions in Contracting out and damages
The Act expressly prevents a person builder or contractor or other professional who completes building work including designers from delegating or contracting out of the duty of care or contracting out of the Act.
How does this impact property owners?
The greatest beneficiaries of the Act will be owners of buildings who were not protected under the Home Building Act 1989 (NSW) when the statutory warranty periods expire.
What this all means for Builders, Contractors, Engineers & Designers
Contractors, subcontractors, builders and designers or any person completing construction work will now owe a duty of care to ensure that their work is not defective and therefore does not cause economic loss or damage to the owners of a building. All persons completing construction work are now liable directly to the owner/s. If there is a breach in this duty of care, contractors, subcontractors, builders and designers could be liable for costs and damages as a result of defects in their work that results in economic loss.
This liability extends up to a period of 10 years for work completed to owners and subsequent owners of properties who can sue contractors, subcontractors, manufacturers and designers directly whether or not they were engaged by the builder or they were a party to the contract if they completed construction work on that building.
Also, commencing 1 July 2021, the Department of Customer Service will have broad powers to take disciplinary action, investigate compliance, issue “stop work orders”, authorise the publication of a warning notice against registered practitioners under the Act.
If you have any questions regarding the new duty of care laws, the Act and require cost-effective expert legal advice, contact George Anton of GA Lawyers today on (02) 9554 8111 for an obligation free chat over the phone about your individual needs and circumstances.
We can assist in advising you generally and ensure that you are properly structured to avoid becoming personally liable.
A solicitor and lawyer who will look after your interests to the full extent of the law is what the legal team at GA Lawyers Sydney are well known and respected for.
