If you are in the business of developing, designing or building residential apartments in New South Wales then you should by now:
Construction activity of this kind is to be regulated not just by the Home Building Act (NSW) but also the Strata Schemes Management Act 2015 (NSW), Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 No.9 (NSW), which came into force on 1 September 2020, and the Design and Building Practitioners Act 2020 (NSW), parts of which came into effect on 11 June 2020 (such as the duty of care) with the balance coming into effect on 1 July 2021 or as proclaimed.
Transitional provisions under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 No.9 for obtaining the occupation certificate will expire on 1 March 2021. The occupation certificate is a necessary element not just for permitting use of the constructed building but almost invariably is a necessary element for achieving practical completion under the relevant construction contract.
On and from 1 March 2021, the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 No.9 will impose upon a “developer” a strict and stepped regime for obtaining the occupation certificate, which will be in addition to those which would normally apply under the Environmental Planning and Assessment Act 1979.
“Developer” is given a broad meaning in the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 No.9 and could apply to a developer (as it is traditionally understood), the Principal under a head contract, the owner of the land on which the construction takes place or the head contractor. In this respect, it captures how the industry may allocate the contractual responsibility for obtaining the occupation certificate.
To reflect the change to occur from 1 March 2021, you must ensure whichever entity under the construction contract is tasked with applying for the occupation certificate is aware of and prepared for the requirement that that entity must give a written notice (called an expected completion notice) to the Secretary of the Department of the date (called the expected date) on which an application for an occupation certificate is expected to be made. This notice has to be given between 6 to 12 months prior to the expected date.
If following the giving of an expected completion notice, circumstances indicate that the expected date may have changed, then an expected completion amendment notice must be issued within seven days of the developer becoming aware of the change.
The generous notice periods are clearly designed to give the Secretary the opportunity to conduct any investigation of the work carried out for the purposes of identifying issues that could fundamentally affect the safety and stability of the structure.
If we have prepared contracts for you, you would find the statutory scheme to be quite familiar because our contracts already contain a similar regime for obtaining practical completion.
There will be serious consequences for non-compliance. In addition to attracting prescribed financial penalties, the Secretary has powers to make an order prohibiting the issue of the occupation certificate and, if relevant, the registration of the strata plan.
Such an event could have serious financial consequences for all concerned:
Hence, whatever role you might have in the procurement of residential apartments in New South Wales, all of the key parties concerned have a common interest in achieving compliance with this statutory scheme.
When the Design and Building Practitioners Act 2020 comes into effect on 1 July 2021, the applicant for an occupation certificate will have to comply with additional notification requirements.
What should you do?
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