Northern Territory Explanatory Statements

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BUILDING LEGISLATION AMENDMENT BILL 2010

48C Declaration by building contractor about building work

This clause of the Bill proposes to clarify the obligation imposed on building contractors to provide declarations regarding building work they perform that has been carried out under a contract entered into under s 48B. The substituted provisions are designed to make the position unambiguous and the intention for the operation of this section is as follows:

· Declarations must be made by the natural person that performed building work (s 48C(2) makes reference to this requirement in s 69(2) of the Act once amended).
· Subsections (2) and (3) provide that the declarations must be made within 14 days and provided to the certifier within that time. It is an offence for the building practitioner to not comply with these provisions. Previously the requirement for providing the declaration to the certifier was located in regulation 20A, however the amendments propose to repeal and substitute that regulation to clarify the obligations on building contractors for providing declarations. Moving this particular requirement to this proposed section is one of the methods that is proposed to achieve this.
· Proposed subsections (4) and (5) provide that declarations must be made irrespective of whether the entire work for which there was a contract entered into has been completed or is only partially finished. These subsections make it clear that if a building contractor ceases performing building work on a project, (such as where a nominee ceases to continue working for a corporation), he or she must make a declaration for the portion of work that they have performed in accordance with subsection (2).

· Any subsequent building practitioner (being a natural person) that performs work must also sign for the portion of work that they perform. Therefore, on a particular building project there may be multiple builders declarations made depending on the number of building contractors that are engaged to perform the work. This could occur in the instances when there is a change in nominee, or where a building contract is terminated.

The provisions are designed to ensure that the natural person responsible for the building work makes the declaration and provides for the situation where there is a change in builder during a building project.

48CA Declaration by corporation after prescribed event

Currently the Act does not provide for the situation where a prescribed event occurs. The proposed Bill is designed to allow the Director of Building Control to issue an exemption certificate as a last resort, when such an event occurs. If however the prescribed event occurs and the building work is being carried out under a contract by a building contractor that is a corporation, then the corporation is responsible for ensuring that the owners are able to obtain the required certification, despite the prescribed event. To achieve this, the Bill clarifies the obligations placed on corporations where a prescribed event occurs with respect to building work.

The proposed new s 48CA applies only to building work to which s 48C applies and where a prescribed event occurs and either the registered director or nominee responsible for that building work has failed to make a declaration because of that event. In relation to building work in which s 48C does not apply, this Bill proposes that existing Part 3, Division 4 is repealed and substituted with Part 3A, Declarations relating to particular building work.

Pursuant to proposed s 48CA(2), where a nominee or a registered director is responsible for performing the work and a prescribed event occurs, (such as the death of that building contractor), the corporation will be responsible for making inquiries as to whether the work performed by that building contractor was carried out in accordance with the building permit.

After the corporation is satisfied that the work has been performed in accordance with the building permit, proposed s 48CA(4) provides that the new nominee or registered director must make the declaration. As the new nominee was not responsible for personally carrying out the work, a note under subsection (4) refers to s 69(5) which proposes to provide that the person that makes the declaration for a corporation will not be criminally liable for that statement, if it was made in good faith. The proposed inclusion of s 48CA(2)(a) places a requirement on the corporation to undertake these enquiries with due diligence and within a reasonable period of time.

No penalty is included for a nominee failing to make the declaration in accordance with this section. This is because it was considered that a corporation will be able to manage its own affairs and if a nominee is not wiling to sign the declaration because they are not satisfied with the inquiries the corporation undertook, the corporation should either undertake further inquiries to satisfy the registered building contractor (being a natural person), or they could alternatively engage the services of another registered building contractor.

Further, it is always open for the Director of Building Control to investigate allegations of professional misconduct regarding registered building practitioners, which includes companies registered as building contractors and therefore the conduct of both the company and any nominee is able to be regulated in that manner.

The reference in proposed s 48CA(1)(a) to building work to which s 48C applies, makes it clear that an unregistered director is precluded from making the declaration as only a registered building contractor (a natural person) can make a declaration about building work pursuant to proposed s 69(2) (referred to in 48C(2)) .

Clause 9. Repeal and substitution of section 48G

48G Declaration by owner-builder about building work

The provision relating to owner-builders declarations requires repeal and substitution to reflect the amendments of this Bill because owner-builders are also required to provide a declaration for work they perform. The death, incapacity or disappearance of an owner-builder may lead to an impasse in the certification process.

It is also necessary to repeal and substitute this section to ensure that it is clear that owner-builders are responsible for signing off on all work that they perform. Therefore in the event that an owner-builder sells the property before completing the project, proposed s 48G(1) and (2) makes it unambiguous that the work that has been performed by the owner-builder must be signed off by that owner-builder. As a result it will be clearly distinguishable from any work that a subsequent builder performs.

It is proposed that the new process for a person (for instance a person administering the estate of an owner-builder that dies mid-construction) to apply to the Director of Building Control for an exemption certificate can be used when such an event occurs and therefore allow the certification process to continue.

Clause 10. Repeal and substitution of section 69

69 Declaration to accompany application

The repeal and substitution of s 69 makes the position with respect to who must sign a declaration about building work unambiguous by making reference to a “natural person” in subsection (2). Subsection (3) provides that subsection (2) does not apply, where a prescribed event has occurred and another natural person (the new nominee or registered director) has been required to make the declaration due to a prescribed event that has prevented the natural person that was performing the building work to sign the declaration (as provided for in proposed s 48CA(4)).

In this clause, the requirement for a building certifier to not issue an occupancy permit without a declaration is in relation to both registered and non-registered building contractors whether they are sole traders, or nominees or directors. The amendments are designed to ensure that it is clear that a builder must personally sign off on any work performed by him or her. The declarations referred to under this section relate to building work that requires an occupancy permit. Declarations that are required to be provided where there is no requirement for an occupancy permit are provided for in Regulations 20C, 20D and 20F.

Clause 11. New Part 8, Division 3A

Division 3A Exemption certificates and validation of exemptions

73A Exemption certificate and prescribed certification

The purpose of this proposed new division is to vest the Director of Building Control with the power to issue exemption certificates for certain certification that is required pursuant to the Act and Regulations. The provisions refer to the proposed new Schedule 4 which deals with specific matters relating to the proposed process.

Section 73A(1) relates to what an exemption certificate that is granted by the Director of Building Control provides. Section 73A(2) describes the type of certification that these new provisions apply to. It is noted that the Director will not be able to issue an exemption certificate in relation to some certification, for example, the Director will not be able to grant an exemption for certification required pursuant to other legislation, such as a certificate of compliance in accordance with the Electricity Reform Act.

73B Schedule 4 applies

This provision refers to proposed new Schedule 4 that defines the procedure for applying to the Director of Building Control for an exemption certificate.

73C Entitlement to apply for exemption certificate

This provision ensures that applications for exemption certificates may only be made where certain circumstances exist and defines those requirements.

73D Validation of exemptions and occupancy permits

Past decisions made by the Building Appeals Board for the issue of exemption letters are validated by proposed s 73D. This is designed to ensure that where an occupancy certificate has been issued on the basis of exemption letters previously granted by the Board, the occupancy certificate has the same status as if the exemption had been granted by proposed new s 73A. This was considered a necessary amendment due to legal advice obtained that the Building Appeals Board only has the power to modify and exempt requirements in the Regulations and not a requirement in the Act.

Clause 12. New Part 17

Part 17 Transitional matters for Building Legislation Amendment Act 2010

180 Definitions

This section defines certain terms relevant to this particular part of the amendment Bill.

181 Application for exemption certificate

These are transitional provisions that provide that the proposed Part 8, Division 3A (which relates to the application for and the provision of exemption certificates) applies regardless of whether the prescribed event or work occurred before the commencement day. This will enable currently affected owners to apply to the Director for an exemption certificate, pursuant to the new provisions.

182 Declaration made by corporation after commencement day for building work completed before commencement day

This section applies to work that has been performed pursuant to a contract required under s 48B entered into by a corporation and has either been partially or fully completed and the declaration has not yet been given to a certifier. It provides that the new requirements in s 48C (except subsection (4)) apply. That is, a nominee or director that has left the company will not be required to sign the declaration for that past work. The company however will be required to undertake inquiries about that building work and provide that information to the new nominee or director (that is a registered building contractor), and the new nominee or registered director must then make the declaration in accordance with the proposed new provisions in s 48CA.

Section 182(5) ensures that a registered building contractor is still liable and may be prosecuted for an offence against the repealed s 48C(1) which relates to the making of a declaration and repealed regulation 20A(5) which relates to the provision of the declaration to the certifier within 14 days.

These transitional provisions apply only to work performed under a contract entered into by a corporation.

It should be noted that where an impasse event (defined in clause 1 of Schedule 4) has occurred prior to the passage of this Bill, (for instance where a building practitioner has ceased to be registered), the provisions relating to an impasse will apply and the owner will be able to apply to the Director of Building Control for an exemption certificate.

183 Declaration made by owner-builder after commencement day for building work completed before commencement day

This transitional provision provides that where work has been completed (either partially or completely) by an owner-builder pursuant to an owner-builder’s certificate, if the declaration has not been provided to the certifier the new provisions pursuant to substituted s 48G are applicable.

If the owner-builder had finished carrying out the building work (either wholly or partially) and had sold the property prior to commencement day, proposed subsections 183(5) to (7) will apply. In that situation, if the new owner of the land wishes to perform building work as an owner-builder, they must satisfy themselves that the work that has been performed by the previous owner-builder was in accordance with the building permit and make the declaration (specifying the inquiries they undertook to do so).

If however the new owner wishes to engage the services of another builder (a registered building contractor), the new owner must apply to the Director of Building Control for an exemption certificate (as if the reason why the original builder had not made the declaration was because of the occurrence of a prescribed event).

Clause 13. Amendment of Schedule 1 (Regulations)

Items 53 and 54 are proposed to be included for the purposes of consistency with the remainder of the Act in that specific powers that the Regulations may make provision for are listed in Schedule 1.

Clause 14. New Schedule 4

Schedule 4 Exemption certificates

1. Prescribed events

Items 1(a) to (f) set out the circumstances that must be present for a person to apply to the Director under the proposed new exemption provisions. At present the Act does not allow for the situation where a builder for instance dies prior to making a declaration. The following circumstances are in relation to events that relate to building practitioners, owner builders and other people concerned with providing certification, (such as a manufacturer’s certificate for roof trusses). It has been left open for further matters to be prescribed by the Regulations in the event it is considered necessary by way of proposed s 73C(2).

2. Entitlement to apply for exemption certificate

Item 2 relates to the circumstances that must exist in order for an owner to be entitled to apply for an exemption certificate. It is important that these provisions are only construed to apply in relation to current, active building work, as opposed to incomplete certification matters (presently covered by a moratorium with respect to enforcement of compliance). The proposed provisions therefore require that the building work must have physically commenced on land, a building permit must also be current (unless it has lapsed due to a prescribed event) and the owner must have taken all reasonable steps to obtain the certification within a reasonable time. It will be a matter for the Director of Building Control to decide whether an owner has taken all reasonable steps to obtain the necessary certification and what is deemed to be a “reasonable time”.


3. Application for exemption certificate

Item 3 relates to the manner that an owner must apply to the Director of Building Control to engage these provisions. An approved form is required to be completed by the applicant who will need to include certain matters, as listed in Items 3(1)(a) to (e). No application fee will be charged for an application.

4. Consideration of application

Item 4 refers to the manner that the Director is to consider the application. The Director has the power to request the owner obtain further information if required.

Item 4(2)(b) makes it clear that the Director may require the owner to undertake certain work so that reports can be provided by suitably qualified persons regarding the status of the building work. In some circumstances a qualified person may consider it necessary for intrusive investigations to be undertaken to ascertain whether the work was performed materially in accordance with the building permit. This may include actions such as cutting into building work to inspect components or demolition to expose certain components of building work. It is the owner’s obligation to provide any information requested by the Director and to pay for the cost of any building work (including remedial work) that is incurred pursuant to this provision.

5. Determination of application

Item 5 relates to the matters the Director must take into account when deciding to issue or refuse an exemption certificate. Some of the matters listed will only be applicable to certain types of building work, i.e. there are no mandatory inspection stages in Tier 2 areas, therefore the Director does not need to consider sub-items (c) and (d) for that type of building work. It has been left open for further matters to be prescribed by the Regulations in the event it is considered necessary.

Sub-item (h) will enable the Director of Building Control to take into consideration the past performance of a registered building practitioner that is the subject of a prescribed event when determining whether an exemption certificate should issue. This means that where the Director of Building Control is aware of, or made aware of past performance of building work by the building practitioner that has been unable to provide the certification, the Director can use this information to assess what information he or she requires to satisfy him or herself that the building work was performed in accordance with the building work. This provision may be relevant when the Director determines whether or to what extent intrusive investigations are warranted. Item 5(4) ensures that the applicant is provided with the Director’s reasons if the Director refuses to issue an exemption certificate and is notified that they have a right of appeal to the Appeals Board in accordance with Item 6.

6. Appeal against refusal to grant exemption certificate

Item 6 provides an appeal right to the Building Appeals Board against a decision by the Director as to whether or not an exemption certificate should be granted. It is noted that the appeal ground is only in relation to the decision as to whether the exemption certificate should be granted. The provision does not allow an owner to appeal on any other grounds such as a decision regarding what reports or investigations the Director requires the owner to provide. Under these circumstances the applicant would be able to request the Director to make his or her decision based upon the information they have provided and if they are aggrieved by the Director’s decision not to issue an exemption certificate, they are able to appeal that decision to the Appeals Board. Further, exemption certificates can only be granted unconditionally by the Director of Building Control.

Part 3 Amendment of Building Regulations

Clause 15. Regulations amended

This clause specifies the part that amends the Building Regulations.

Clause 16. Amendment of regulation 2 (Interpretation)

The amendment of regulation 2(1) is a minor editorial change for the purpose of expressing the regulation in conformity with current drafting practice.

Subclause 16(2) would insert the definition of “completing building work”, for Part 3A of the Regulations to mean building work that has been completed as specified in regulation 20A(1), (which means either partially or fully completed building work).

Clause 17. Amendment of regulation 13 (Duration of building permit)

An amendment to regulation 13 is considered necessary to ensure that a building permit can be extended by the Director, where the building permit has lapsed solely due to a prescribed event. This is to ensure that owners are able to preserve the rights that they held under the existing permit that has lapsed due to a prescribed event.

Clause 18. Repeal and substitution of Part 3, Division 4

The amendment will repeal and substitute Part 3, Division 4 of the regulations which currently relates to builder declarations for certain building work.

Part 3A Declarations relating to particular work

20A Application of Part

This part provides for declarations for particular building work. The particular building work includes all building work that is carried out under a building permit, including building work mentioned in regulation 18 (Tier 2), except building work to which s 48C and s 48G applies. Section 48C and s 48G refer to building work that requires a building contract (s 48C) or owner-builder work (s 48G) and relate to the declaration required pursuant to s 69. Section 69 relates only to building work that requires an occupancy permit.

It was considered necessary to ensure that the procedure for the making of a declaration for building work that requires a declaration and is not provided for in s 48C or s 48G was dealt with explicitly. The previous provision in regulation 20A was considered unclear. These regulations do not add any further obligations, they simply ensure that the obligations are stated more explicitly and are set out more clearly.

Existing regulation 20A covers the situation where declarations are required to be provided for building work for the construction of a house, unit or shed other than building work that is covered by s 48C or 48G. This includes building work that is performed in Tier 2 areas and building work that does not require a registered building contractor or a building contract to be entered into. The current regulation is also where the requirement for declarations (required under s 48C and s 48G) to be provided to the certifier is found.

Because the regulation combined s 48C and s 48G matters, as well as building work that did not fall into those provisions, it was considered appropriate to divide the separate types of building work so that the requirements relating to the provision of declarations are clear for each type of building work. The requirements for a builder to make and provide a declaration for work that s 48C or s 48G applies are now both found in those proposed new provisions.

20B Declaration for building work requiring occupancy permit

The insertion of this regulation relates to the manner that a declaration for building work (other than building work that s 48C or s 48G applies) must be made. It is for work that requires an occupancy permit but does not require a building contract. An example of this would be commercial buildings, renovations to units, renovations to houses (if built in Tier 1). A timeframe for the declaration to be made and provided to the certifier is required for particular classes of building work such as houses and units. A timeframe is not provided for other classes of building work to maintain the status quo that exists with regulation 20A at present.
20C Declaration for building work not requiring occupancy permit

This proposed regulation relates to building work that does not require an occupancy permit for the completion of the certification process. An example of work that is covered by this proposed regulation is work for the construction of a new house in a Tier 2 area or renovations for a house in a Tier 2 area.

20D Requirements for declaration under regulation 20C

This regulation is designed to place the same requirements and obligations on the natural person that carries out building work that does require an occupancy permit pursuant to s 69. The type of work that would be covered by this regulation would be work for the construction of a new house in a Tier 2 area or renovations for a house in a Tier 2 area. It further provides the same process that is proposed to be used where a corporation is responsible for performing the work, in the event that an impasse occurs. It achieves this by protecting a person that makes the declaration in accordance with regulation 20E from criminal liability pursuant to proposed regulation 20D(5).

20E Declaration by corporation after prescribed event

This provision allows for the process that occurs where a prescribed event has happened (i.e. the builder has died) and the work was performed by a corporation. It relates to all work that is not covered by s 48C or s 48G. It is the same process as described in proposed s 48CA.

20F Building certifier to give copy of declaration to Director

This provision ensures that for work that is not covered by s 48C and s 48G, the declaration that is made pursuant to regulation 20C is provided to the Director of Building Control by the certifier within 7 days. For work that is performed pursuant to s 48C and s 48G the provision is covered by s 42(1)(c). This ensures that the declarations made for the completion of a house in Tier 2 areas are provided to the Director of Building Control to close the certification process as occupancy permits are not required in those areas.

Clause 19. Amendment of regulation 41G (building work)

The amendment to this regulation is designed to amend a mistake. The regulation should have included the same provision found at regulation 41L(2)(a). That is, that building work for s 48B(1) of the Act does not include work for or in connection with the construction of renovations or alterations to class 1a detached houses if there is no increase in floor area. This amendment will make the regulations consistent with the current regulatory practice.

Clause 20. New Part 16

Part 16 Transitional matters for Building Legislation Amendment Act 2010

The creation of this part of the regulations is to deal with the application of the regulations during the transitional stage.

51 Definitions

This section defines certain terms relevant to this particular part of the amendment Bill.

52 Declaration made by corporation after commencement day for building work completed before commencement day

This regulation applies if building work had been completed by a person carrying out building work for a corporation to which repealed regulation 20A had applied and a declaration has not yet been given to the certifier.

If this situation exists, the new regulations will operate other than regulations 20B(5) and 20C(4). This is consistent with the transitional provisions relating to building work that s 48C and s 48G apply to. This transitional provision is deigned to ensure that if a corporation was responsible for performing the building work, and the responsible builder ceased acting for the corporation the corporation must satisfy itself that the work had been performed in accordance with the building permit and ensure that the declaration is made by an appropriate person. Completion of building work refers to either partially or wholly completed building work.


Clause 21. Further amendments

This clause provides for further amendments that are proposed to be made to the Regulations in the Schedule to this amendment Act.

Clause 22. Expiry of Act

This is a clause that provides for the expiry of the Act, on the day after the Act has commenced and amended the principal Act.

Schedule. Further amendments of Building Regulations

Regulation 21 has been amended to make it clear that the matters prescribed there relate to s 40 in the principal act.

Regulation 41K has been amended to reflect the correct reference to the provision due to the proposed amendments.

Regulation 41K(a) has been amended to correct a drafting error.

Regulation 41M has been omitted as the regulation is not necessary because for s 48C building work, regulation 41E has the same effect therefore regulation 41M was an unnecessary duplication.
Schedule 4 has been amended to ensure that all references to Borroloola are spelt correctly.

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