The Design and Building Practitioners Act 2020 (NSW) (DBP Act) commenced on 11 June 2020 implementing broad legislative changes to the building and construction industry.
In contrast to the current legislative framework, the DBP Act legislates a broad duty of care to many industry participants.
If you are (or have been) involved in carrying out building work in NSW, the DBP Act could have a substantial impact on your liability for defective building work due to the introduction of a new extended statutory duty of care.
Here we focus on the extended duty of care accompanying the new DBP Act. For an outline of other key reforms brought about by the commencement of the Act, see our summary article here.
Extended Statutory Duty of Care
What is a Duty of Care?
A duty of care is an obligation to ensure the safety or well-being of others.
What is the extended statutory duty of care under the DBP Act?
A person who carries out construction work now has a duty to exercise a reasonable standard of care to avoid economic loss caused by building defects in or related to a building for which work is done. The duty also includes economic loss arising from construction work performed.
Who owes a duty of care?
Any person who has carried out construction work in the last 10 years had a duty to exercise reasonable care to avoid economic loss caused by defects, that includes people involved in the design and planning of any construction works. The DBP Act is a retrospective statute – meaning it exists on previous works even though it did not exist in this form at the time those works were carried out.
The duty is non-delegable, and parties cannot contract out of it.
Who benefits from the duty of care?
A duty of care is owed to each owner of the land in relation to which the construction work is carried out, including all subsequent owners. The duty of care is owed regardless of whether the construction work was carried out under an arrangement with the current owner or another person.
What kind of work does the duty of care relate to?
- building work (including residential building work);
- preparing regulated designs and other designs for building work;
- manufacturing and supplying a building product; and
- supervising, coordinating, project managing or otherwise having substantive control over the carrying out of any of the above
When does the duty of care apply?
A property owner can claim for a breach of the duty of care where a loss first becomes apparent within 10 years immediately before the commencement of the DBP Act (i.e. June 2010) as well as new contracts made after its commencement. Therefore, it has the potential to apply to an array of historic works provided the loss first became apparent during the prescribed timeframe*.
* This is subject to certain applicable periods established under the legislation which may provide an earlier expiry on rights.
We will be doing a deep-dive into the legislation over the coming weeks.
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The Design and Building Practitioners Act 2020 (NSW) can be viewed in full here.
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