New laws proposed by NSW Government aim to make builders liable for design errors to third party purchasers

In response to the highly publicised defective construction works in Sydney’s Opal and Mascot Towers, and the recommendations of the Shergold-Weir Report, the NSW Government has proposed new laws designed to “weed out bad builders” and restore confidence in the NSW construction industry.

The changes proposed under the Design and Building Practitioners Bill 2019 (NSW) (the Bill), include:

  1. Imposing a statutory duty on builders to take “reasonable care” not to cause homeowners and subsequent owners economic loss arising from defective works. Where a builder breaches this duty, owners and subsequent owners will have a statutory entitlement to seek damages from the builder, irrespective of whether they were a party to the contract to carry out the construction work (Note: this proposed statutory duty departs from the current state of law – see our summary on Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 and Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 313 ALR 408).
  2. Introducing a requirement for:
    • design practitioners who design certain building work to be registered and provide “design compliance declarations” confirming that the design complies with the Building Code of Australia (BCA) and other requirements to be prescribed by regulations; and
    • building practitioners who carry out certain building work to be registered and provide “building compliance declarations” confirming that the building work complies with the BCA and other requirements to be prescribed by regulations. Where the building work does not comply with the BCA or other requirements, the builder must set out the steps required to be taken to ensure compliance with the BCA.
  3. Imposing obligations on builders who carry out certain building work to take “all reasonable steps” to ensure that:
    • the design compliance declaration has been prepared by a registered design practitioner; and
    • the building work, or any part of that work, complies with the BCA.
  4. Introducing severe penalties for non-compliance (for example, fines of up to $330,000 and up to two years imprisonment).

CDI Lawyers will keep you up to date with any further developments in relation to the Bill as and when they unfold.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader’s specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

Key contacts:

Stephen Pyman – Director | Principal
Christopher Rowden – Principal


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