I’ve written on several occasions about matters relating to building approvals and certifying authorities. With the commencement of the new Building and Development Certifiers Act 2018 (Certifiers Act) and the corresponding Building and Development Certifiers Regulation 2020 (Certifiers Regulation) on 1 July 2020, I thought the subject warranted a brief review.
For the benefit of the uninitiated, building certification is the process by which the construction of a building is verified as complying with the specifications detailed in an approved set of plans. Certification is required for any structure that is the subject of a development application or is to be approved as complying development. Such structures must be so certified, through a series of mandatory inspections, before an Occupation Certificate can be issued and the structure can be legally used for its intended purpose.
Prior to the introduction of private certification in 1998, building certification had traditionally been the domain of local councils. At the time, there was a perception that the monopoly held by local government on the building approvals and certification process presented an unnecessary bureaucratic obstacle. In an effort to speed up the building approvals and construction process, the NSW Government introduced a system of accreditation for private certifiers. As might be expected, environmental and consumer protection groups were more concerned with the potential consequences of having builders or construction companies effectively employing the people responsible for the ostensibly independent oversight of their work.
NSW, however, wasn’t the first state to introduce private certification. Similar systems were already in operation in South Australia, Tasmania and the Northern Territory.
While there has been no shortage of compliance issues allegedly arising from privately certified works, the spotlight really turned on the building certification process following several high-profile building failures, first the Opal Tower, then more recently the Mascot Towers and several other apartment building projects in Sydney.
The intent was always that a certifier, private or otherwise, would be acting for the consumer, certifying that a building had been constructed in accordance with approved plans, effectively holding the builder or construction company to account if this was not deemed to be the case. There was then a quite clear conflict of interest when a private certifier was engaged by the builder or construction company whose work was being certified. It was a cosy relationship for some, but it also had predictable consequences.
With the commencement of the new Act and Regulation, the NSW [Government] Building Professionals Board, previously responsible for the oversight and regulation of private certifiers, has been abolished, with its functions now under the control of NSW [Government] Fair Trading. Principal Certifying Authorities are now known simply as Principal Certifiers.
Rather than simply being accredited, certifiers must now be registered and thereby subject to explicit conflict of interest provisions. Although the new regulations have been introduced primarily to address the sorts of problems that have surfaced in larger development projects, the impact on smaller developments may also be significant for different reasons. In particular, a certifier is now prohibited from providing professional services, such as design and compliance advice, while at the same time acting as the Principal Certifier on a project. Private certifiers on smaller projects often provided all of these services concurrently. Together with increased liability under the new regulations, and the subsequent costs associated with indemnity insurance, the full commercial impact of these changes in the residential dwelling market is probably yet to play out.
The new Act also amended the Home Building Act 1989 (NSW) to better support consumers in choosing a Principal Certifier. Contractors are now explicitly required to provide their customers with information that explains the role of the certifier before entering into a building contract. This is to ensure that consumers are more aware of the certifier’s role and obligations in the construction process. Contractors will also be strictly prohibited from unduly influencing or attempting to influence the appointment of a certifier.
The bottom line remains that a Principal Certifier works for and operates in the interest of the consumer, not the provider of construction services. If you encounter a contractor who tries to suggest otherwise, it might be a good idea to consider working with someone else.