NSW Parliament releases final report on managing the defects crisis

With New South Wales (NSW) suffering from a severe breakdown in public confidence when it comes to the building and construction sector, the NSW Government established a set of inquiries, reviewed by the Public Accountability Committee, to gauge where there has been a lack of regulation and government oversight within the sector.

On 30 April 2020, the committee released its final report — Regulation of Building Standards, Building Quality and Building Disputes — which focused on the issues of flammable cladding, private certification of buildings, and the role of the strata committee in dealing with defective buildings and disputes.

The final report is significant as it makes a range of recommendations to government, including but not limited to:
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  • An urgent review of the Design and Building Practitioners Bill 2019 (NSW). This includes giving building design practitioners a duty of care to carry out work and a variety of penalties.
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  • A range of significant recommendations in terms of flammable cladding. Recommendations include:
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    • The need to disclose to potential buyers or renters when a building contains flammable cladding.
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    • That the NSW Government provide substantial funding for the rectification of buildings containing aluminium composite panels, and that these products be banned from the Australian market.
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    • That the funding the NSW Government provide for flammable cladding be proportionate to that of the Victorian Government’s $600 million.
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    • In circumstances where insurance has not provided a suitable solution to the flammable cladding issue, the NSW Government should take it upon itself to pay for the rectification of flammable cladding.
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  • Large-scale changes around the building certification process by private certifiers (this is where the building is inspected and approved as compliant with NSW legislation). Recommendations include:
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    • Increasing public control and removing private certification by giving the responsibility back to local councils.
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    • However, there are concerns over this in regard to making a profession redundant and, once it’s back in the hands of local governments, increasing delays and slowing construction.
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    • That the certification process receives a more detail review in another inquiry.
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    • Should there be a place for private certifiers in the future, that this become highly regulated.
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  • That there be changes that impact the role of the strata committee. Recommendations include:
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    • That the NSW Government appoint a Strata Commissioner to sit with the NSW Building Commissioner.
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    • That the Strata Commissioner;
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      • Provide training, support and advice to strata committees on rectifying building defects, flammable cladding, and dealing with strata disputes.
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      • Monitor and change the policy that governs disputes between homeowners, builders, and developers.
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      • Decide that a buildings’ initial strata manager be in place until the first annual general meeting.

While the report merely puts forward recommendations at this stage, it highlights that the NSW Government needs to make critical decisions when it comes to restoring faith and good working order within the building and construction industry. The report does, however, also raise awareness to the fact that the NSW Government will need to make decisions that do not give way to overly expensive procedures and lengthy delays.

For more information, the report can be accessed via the NSW Parliament website or you can receive regular industry updates via our PICA Group newsletter or visit or legislation updates webpage.