The NSW Government has released their second response to the Shergold Weir Building Confidence Report (Report) in the midst of the second high profile apartment defect issue, Mascot Towers, and is calling for further submissions.

The NSW Government responded to the 2018 report some 6 weeks after the Opal Towers fiasco.

It appears the Mascot Towers’ issue has been used as the catalyst for promoting the NSW Government’s further response to the Report, which was released on 26 June 2019. A copy of the Government response is available here.

The updated response is still limited in its scope and does not provide any substantial policy or legislation approach for the construction industry or consumers.

The updated response contained 4 main points:

  1. Requiring categories of building practitioners who are defined as ‘building designers’ to formally declare that plans, specifications and performance solutions they provide are compliant with the Building Code of Australia (BCA), and that builders declare that buildings are built according to the declared plans;

  2. Introducing a new registration scheme for ‘building designers’;

  3. Ensuring an industry-wide duty of care is owed to subsequent homeowners; and

  4. Appointing a Building Commissioner to act as the consolidated regulator for building in NSW.

The changes proposed are considerable, but at this stage still vague. They potentially extend risk to parties that previously may not have had direct exposure to litigation and claims when building defects arose.

In particular, the inclusion of a duty of care (an issue not even raised in the Report) has far-reaching impacts in extending the already generous warranties provided by builders and developers to an undefined period of time, and means further legislative intervention into an area previously tested under common law and in the High Court[1].

It remains unclear as to how the cost of projects, insurance risks, and liability under contract will need to shift once these proposed changes are properly canvassed – including the overall impact on construction and new developments in the NSW economy.

Submissions in response to this government discussion paper can be made until 24 July and can be lodged through the Fair Trading website.

Over the coming weeks, Morrissey Law + Advisory will work through the wide-ranging impacts, the players on who it may impact and the considerations they should be making in preparing the potential changes.

 

[1]  Brookfield Multiplex Ltd v Owners Corporation Strata Plan No 61288 [2014] HCA 36

Disclaimer: This publication by Morrissey Law & Advisory is for general information and commentary only and should not be considered or relied upon as legal advice. Formal legal advice should be sought in relation to any matters or transactions that may arise in relation with communication.