Introduction

Owning a strata property in NSW can feel like trying to solve a giant jigsaw puzzle. Strata owners often juggle problems like defects and hefty repair bills, and they might even end up in squabbles with the owners corporation. But don’t fret just yet. There’s a silver lining peeping through the clouds. As the number of strata defects and disputes soar in NSW, the Design and Building Practitioners Act 2020 shines brightly as a game-changing reform. Coming into action on 1 July 2021, this Act targets squashing those pesky strata defects while upping the ante on safety standards. Ever wondered what makes this Act tick and how it could turn the tide for you?

This article dives deep into the pivotal concept of ‘Building Work’ as defined by the DBP Act and highlights the reinforced safeguards it provides against strata defects, paving the way for safer strata living than ever before.

What does “Building Work” mean under the Design and Building Practitioners Act 2020?

The DBP Act clearly outlines the scope of ‘Building Work’ through its Sections 4 and 36. Within Section 4, ‘building work’ is broadly defined, encompassing tasks, coordination, or oversight related to the construction, modification, extension, repair, refurbishment, or protection of specific building types:

• Residential apartment complexes (Class 2).
• Accommodations like boarding houses and hostels (Class 3).
• Facilities for residential care (Class 9c).

Shifting focus to Section 36, this definition narrows its lens to Part 4 of the Act, which addresses the duty of care that design and building practitioners are bound to uphold. Here, ‘Building Work’ encapsulates ‘residential building work’ as per the Home Building Act 1989’s terms. This broad category includes activities associated with erecting a ‘dwelling’—essentially any structure, or part thereof, crafted or modified for residential use. From construction and modifications to repairs, enhancements, aesthetic enhancements, protective measures, or specialized tasks associated with such a residence, all fall within the domain of ‘residential building work’.

Are strata buildings in NSW covered under the Design and Building Practitioners Act?

Absolutely. Strata buildings find their protection within the DBP Act, specifically targeting Class 2 buildings. These are typically multi-residential structures, much like many strata properties. The DBP Act isn’t just a superficial solution; it delves deep, establishing stringent provisions tailored for Class 2 buildings. These provisions address areas like duty of care and beefed-up compliance measures, among others, which we’ll delve into further on. Interestingly, if a strata property straddles the line between commercial and residential use, it still firmly remains under the protective umbrella of the DBP Act.

Enhanced protection against strata defects under the Design and Building Practitioners Act

One of the main purposes behind enactment of the DPB Act is to address the lack of accountability related to poor design and construction of residential buildings in NSW. This is done with:

1. a new duty of care upon design and building practitioners
2. personal liability for defects
3. new obligations and compliance requirements for design and building practitioners
4. Disciplinary oversight

1. New duty of care upon design and building practitioners

The DBP Act imposes a new statutory duty of care on design and building practitioners and professional engineers to ensure that their work is carried out in a competent and proper manner. Section 37 of the DBP Act states that:

“a person who carries out construction work has a duty to exercise reasonable care to avoid economic loss by defects: in or related to a building for which the work is done; and arising from the construction work.”

In practical terms, this means that professionals now have to exercise reasonable care to avoid economic losses caused by building defects. The term ‘economic loss’ includes the cost of rectifying building and strata defects, as well as the reasonable costs of providing alternate accommodation, if needed. 

More importantly, this duty of care has retrospective application, covering any loss that comes into light within the 10 years immediately prior to 11 June 2020 (the date on which the duty of care provisions came into force). If your strata property was completed on or after 11 June 2010, you are protected under this duty of care. 

2. Personal liability for defects

The new legislation holds directors, supervisors, project managers and developers personally liable for defects in building works, including those related to strata properties. In the recent case of Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust vs DSD Builders Pty Ltd (in liq) [2022] NSWSC 624, the Supreme Court of NSW held that a builder’s project manager was liable for defective works under the DBP Act.

In another case titled The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659, the court found the developer liable under the DBP Act. The court also observed that a person could be held liable if they could have controlled the construction work, even if they were not necessarily in control. This nuanced perspective broadens the ambit of responsibility, ensuring greater accountability in the realm of construction and strata developments.

3. New obligations and compliance requirements for design and building practitioners

The DBP Act introduces several vital changes to enhance construction quality:

1. Registration of Professionals: All design and building experts must register on a publicly available list. This transparency ensures that professionals are recognized and qualified.
2. Mandatory Design Documentation: Before construction kicks off, design practitioners are required to present detailed designs. They must also affirm that these blueprints adhere to the established standards.
3. Certifying Safe and Standard Adherence: Before any building is deemed fit for occupation, builders need to validate that they’ve adhered to the Building Code of Australia. Furthermore, individuals issuing such validations should be adequately insured.

In essence, the DBP Act ensures that strata buildings are constructed with an enhanced focus on quality and safety. Should an issue arise, tracing back to the professionals responsible is more straightforward, facilitating quicker rectification and accountability.

4. Disciplinary oversight

The DBP Act grants significant authority to the Secretary of the NSW Department of Customer Service. Not only can they take disciplinary steps against registered design and building practitioners—including levying fines or even suspending their licenses—but they’re also equipped to intervene directly in ongoing projects. If the Secretary discerns that a building project violates the DBP Act or poses notable risks to the public, future residents, or the property itself, they have the power to issue a ‘stop work’ order. This act underscores the legislation’s commitment to ensuring that construction standards are maintained and that public safety remains paramount.

Conclusion

In conclusion, the DBP Act was introduced in 2020 as the NSW Government’s response to the rising numbers of strata defects across the state. This legislation has significant impact on strata defects and increases accountability for all parties involved in the design and construction of a strata scheme. The DBP empowers strata owners with a range of new rights and remedies. At the same time, it lays down a host of regulatory and compliance requirements for design and building professionals. Whether you’re a lot owner, owners corporation or a design or building practitioner, a deep understanding and adherence to these new mandates is crucial. To ensure you’re on the right track, seeking expert legal counsel is invaluable. Let PBL Law Group’s seasoned strata attorneys guide you through these evolving landscapes. Request a call back from our expert strata lawyers down below.