The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (RAB Act) introduced reforms and increased regulation of construction of apartment buildings throughout NSW in 2020 as a response to several high-profile scandals involving defective apartment buildings such as the Opal Tower in Sydney Olympic Park and Mascot Towers in Mascot.
Application of the RAB Act
The RAB Act only applies to building work for ‘residential apartment buildings’: RAB Act s 6(1). ‘Residential apartment buildings’ are those that are class 2 buildings within the meaning of the Building Code of Australia and extends to any building containing a class 2 component, except those excluded by regulation: RAB Act s 3(1).
Crucially, functions under the RAB Act can be conducted with regards to work authorised or required to be authorised by a construction certificate or development certificate at any time within 10 years of the issue of the construction certificate or development certificate.
‘Developers’
The RAB Act involves a relatively broad definition of ‘developers’, who are subject to various duties, obligations and levies under the RAB Act. Under RAB Act s 4, the definition of ‘developer’ includes the following persons unless excluded by regulation:
- Persons who contracted or arranged for, or facilitated or otherwise caused, (whether directly or indirectly) the building work to be carried out;
- Owners of land on which the building work is carried out at the time the building work is carried out if the work is the erection or construction of a building or part of a building;
- Principal contractors under the Environmental Planning and Assessment Act 1979 (NSW);
- Developers of strata schemes under the Strata Schemes Management Act 2015 (NSW); and
- Persons prescribed by regulation.
Building Work Levies
RAB Act s 6A allows the imposition of building work levies by regulation. This has been provided for in Residential Apartment Buildings (Compliance and Enforcement Powers) Regulation 2020 (NSW) (RAB Regulations) and was introduced in 2022 in the Residential Apartment Buildings (Compliance and Enforcement Powers) Amendment (Building Work Levy) Regulation 2022 (NSW).
RAB Regulations provides for building work levies to be paid by developers when expected completion notices are given: RAB Regulations regs 6-8. The amounts to be paid depend on:
- The number of storeys constructed if the building work relates to a new building or the addition of storeys to an existing building: RAB Regulations reg 7; or
- The projected cost of the building work if the building work is to repair, renovation or protective treatment of a building or part of a building: RAB Regulations reg 8.
RAB Regulations reg 5 lists the types of building work that are exempted from the building work levy. In addition, building works with a projected cost of less than $150,000 do not require a levy to be paid: RAB Regulations reg 8.
Notifications of Intended Completion
Under RAB Act s 7, developers cannot apply for occupation certificates if the developer has not notified the NSW Building Commission of their intention to apply for an occupation certificate and the date of expected completion 6-12 months before submitting such an application. If there is more than one developer for a project, only one developer has to submit such notification: RAB Act s 7(6).
However, when building works are expected to be completed in less than 6 months, such notification must be given within 30 days of the commencement of the building work: RAB Act s 7(3).
Developers also have an obligation to notify of any changes to the date the developer expects to make an application for an occupation certificate if the new expected date of completion is not within 60 days of the original notified date in the original notification: RAB Act s 8.
NSW Building Commission Investigation Powers
RAB Act pt 3 confers various powers on ‘authorised officers’ to investigate, monitor and enforce compliance with the RAB Act and its regulations, the National Construction Code, Australian Standards, and approved plans in relation to building work: RAB Act s 12. An ‘authorised officer’ refers to the Building Commissioner or a person appointed under RAB Act pt 3 div 2: RAB Act s 11.
Some of the powers conferred upon authorised officers include:
- The power to require production of information and records: RAB Act s 17;
- The power to require answers to questions: RAB Act s 18;
- The power to record such questions and answers: RAB Act s 19;
- The power to enter premises with or without a search warrant: RAB Act ss 20-2;
- The power to require provision of assistance to the authorised officer: RAB Act s 23; and
- The power to do all that is reasonably necessary for an authorised purpose upon lawfully entering the premises: RAB Act s 24.
Obstruction of authorised officers is an offence under RAB Act s 26 and failure to comply with a direction of an authorised officer is an offence under RAB Act s 27.
In addition, RAB Act s 32 confers additional powers to conduct investigations whether or not a complaint has been received, and confers discretion as to what investigations it chooses to conduct.
Orders Prohibiting the Issue of Occupation Certificates
Under RAB Act s 9(1), the NSW Building Commission has the power to prevent an occupation certificate from being issued in the following circumstances:
- The expected completion notice requirements under RAB Act s 7 were not met;
- An expected completion amendment notice requirements under RAB Act s 8 were not met;
- There is a serious defect in the building;
- A rectification bond required under the terms of an undertaking given by the developer relating to the residential apartment building has not been provided;
- A building bond required under Strata Schemes Management Act 2015 (NSW) s 207 in relation to the building has not been given;
- A developer, in relation to building work of the residential apartment building, fails to comply with a direction of an authorised officer under RAB Act ss 17 or 18; or
- Other circumstances prescribed by the regulations.
There is a presumption that, where is a serious defect, a building work rectification order remains in force or a development control order under the Environmental Planning and Assessment Act 1979 (NSW) relating to defects in the building work remains in force: RAB Act s 9(2).
These orders can be appealed to the NSW Land and Environment Court within 30 days of the notice of the order being given but the lodging of an appeal does not stay action on the order: RAB Act s 10.
Undertakings
Undertakings under RAB Act s 28 are written statements by developers agreeing to either refrain from conduct that contravenes the RAB Act or the RAB Regulations, take action to prevent or remedy contraventions of the same or to provide a rectification bond to meet the costs of eliminating, minimising or remedying a serious defect or a potential serious defect: RAB Act s 28(2).
The undertaking may or may not be accepted: RAB Act s 28(1). However, once an undertaking is accepted, contravention of an accepted undertaking is an offence: RAB Act s 28(3).
Stop Work Orders
Stop work orders are orders which require developers to stop building work if ‘the building work is, or is likely to … result in significant harm or loss to the public or occupiers or potential occupiers of the building to which the work relates or significant damage to property’: RAB Act s 29(1). Such orders may be unconditional or subject to conditions: RAB Act s 29(3). Failure to comply with a stop work order is an offence: RAB Act s 29(8).
These orders can be appealed to the NSW Land and Environment Court within 30 days of the notice of the order being given but the lodging of an appeal does not stay action on the order: RAB Act s 30.
Orders to Restrain or Remedy Contraventions
The NSW Building Commission can apply to the NSW Land and Environment Court for an order to remedy or restrain a breach of the RAB Act or the RAB Regulations or any order under the RAB Act: RAB Act s 31(1). These orders can be made even if there are no proceedings in relation to offences under the RAB Act: RAB Act s 31(3). In proceedings for such orders, interim orders may be granted if the Court deems it desirable: RAB Act s 31(4).
Building Work Rectification Orders
Building work rectification orders can be made if ‘building work was or is being carried out in a way that could result in a serious defect in a residential apartment building, or a residential apartment building has a serious defect’: RAB Act s 33(1). Such order must be made in writing and can be unconditional or subject to conditions: RAB Act s 33(3). The order must also be served and only takes effect from the time of service: RAB Act s 35.
In addition, when a building work rectification order is issued, another order may be issued requiring the occupier of the land to permit the developer to carry out the necessary rectification works: RAB Act s 41(1). The owner must permit the work to be carried out within 28 days of being served the order: RAB Act s 41(2).
Failure to comply with either of such orders is an offence: RAB Act ss 33(9), 41(3).
However, before a building work rectification order can be given, notice must be given of the intention to give such an order and the proposed terms of the order: RAB Act s 44(1). This requirement may be dispensed with if there is a serious risk to public safety or it is an emergency: RAB Act s 44(3). After being provided this notice of intention, the person whom the notice is given to may make written representations to the NSW Building Commission: RAB Act s 46. The notice may also include a date by which such representations must have been made: RAB Act s 44(2). These representations must be considered before a decision as to whether to give the orders is made: RAB Act ss 47-8.
Building rectification orders can be appealed to the NSW Land and Environment Court within 30 days of the order being given but any appeal does not effect a stay of the order: RAB Act ss 49-50.
Compliance Cost Notices
When a building work rectification order is issued, a compliance cost notice may also be served on the developer: RAB Act s 51(1). Under RAB Act s 51(2), these are notices requiring the developer to pay some or all of the reasonable costs incurred in:
- monitoring action under the building work rectification order, and
- ensuring that the building work rectification order is complied with, and
- the investigation that led to the giving of the building work rectification order, and
- the preparation of the building work rectification order, and
- any other matters associated with the building work rectification order.
However, if the developer was not responsible for the situation which gave rise to the issue of the notice, the developer can recover the cost of complying with the notice from those responsible provided that the developer complies with the notice: RAB Act s 51(5).
Compliance cost notices can be appealed to the NSW Land and Environment Court within 30 days of the service of the notice: RAB Act s 52(1). The Court can deal with the appeal regarding the compliance cost notice at the same time as an appeal regarding the related building work rectification order, if such appeal has been filed: RAB Act s 52(2)(b).
Multiple Building Work Rectification Orders and Multiple Developers
Multiple building work rectification orders can be given in a combined order: RAB Act s 53. Building work rectification orders can also be given to multiple people: RAB Act s 54.
In addition, a building work rectification order is not invalid merely because it is not directed towards all the developers on a project, if there are multiple developers on the project: RAB Act s 55(1)(a). In these situations, any developer on the project may complete the work to ensure compliance with such an order: RAB Act s 55(1)(b).
Prosecution of Offences Against the RAB Act
Prosecutions of contraventions of the RAB Act are done in either the NSW Local Court or NSW Land and Environment Court, depending on the penalty sought: RAB Act s 56(1), (3)-(4). Prosecutions of contraventions of the RAB Regulations are done in the NSW Local Court: RAB Act s 56(2).
A limitation period of 3 years usually applies for the prosecution of offences: RAB Act s 56(5)(a). However, the Court may provide leave to commence proceedings falling outside this period if proceedings commence less than 2 years after the date on which evidence of the offence was discovered: RAB Act s 56(5).
Once there is a conviction of an offence under the RAB Act, the Court has the power to order ‘publicity orders’ under RAB Act s 56A. These require the person convicted of an offence to publicise the offence including the circumstances of the offence, the consequences of the offence, the order e.g. building work rectification order made in connection with the person, and the penalty imposed: RAB Act s 56A(1).
Conclusion
A copy of the current RAB Act can be found here.
If you require any advice on building claims, including if you have a potential claim or have a claim made against you, please do not hesitate to contact our expert lawyers at admin@valorumlaw.com.au or voregan@valorumlaw.com.au. Our expert construction lawyers will be on hand to assist you.
The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.
Contributors: Harry Chen
