The Building Legislation Reforms: An inside out update

This paper serves as an update to an earlier paper and presentation on the building legislation reforms, powered by the Building Act 2011 (WA) (Building Act), which commenced operation on 2 April 2012.

The Hon Simon O’Brien  MLC, Minister for Commerce perhaps best described the nature of the reforms during the second reading of the Building Amendment  Bill 2012:

We have not replaced it with an updated version; rather, we have turned the system inside out.

As was to be expected, reforms of this nature have a teething period and often creases need ironing out.  That is where we are at now, updating the inside out.

General feedback from the building industry is that with the new amendments,  the reforms are achieving a more efficient and streamlined permit process.  That said, some local councils reportedly still take excessive time to process applications.  Key players in the residential building industry now exclusively use the certified application process for permits providing it greater certainty and efficiency within their business.

By and large commercial builders didn’t suffer the shock that was reported of the residential industry when the reforms came into effect.  They did experience difficulties with transitional building licences, particularly when attempting to obtain an occupancy permit.  With a bit of common sense, where that issue arose, it was capably resolved between  the permit authority and contractor without any legal or further intervention.

Part 1 - Amendment legislation

The Building Amendment  Bill 2012 received assent on 5 November 2012 and the changes it has imposed were all in effect by 18 December 2012.  It provided amendments  to the Building Act which flowed on to the Regulations.

Some of the key changes include: 

• Removing the requirement to obtain neighbours’ consent to access vacant land.  Note, however, that the laws of trespass still apply.
• Builders can remove a fence, without the affected neighbour’s consent, in order to build a boundary wall if a building permit has been granted to build the wall.
• Ministerial orders may issue on certain occasions to relax the requirement for signatures (from owners or builders) to be provided to the permit authority.
• Power granted for the Regulations to prescribe how permit authorities may deal with applications that are missing information, including “pausing” rather than “resetting” the time for the permit authority to process that application.
• Amendments to the Regulations (see Regulations 31A to 31J) to more clearly identify the building standards that apply to the building.  Generally the applicable standards will be the edition of the Building Code of Australia (BCA) that is in force at the date of the permit application, although the Regulations now also deal with specific circumstances.

Part 2 – Miller case study – certified applications

The State Administrative Tribunal (Tribunal) decision in Miller v City of Melville [2012] WASAT 156 (Miller decision) was delivered by the Hon Justice John Anthony Chaney and Senior Member Clive Raymond on 31 July 2012.  In my view it is the most important decision so far dealing with the new regime.

In short, the dispute concerned a difference of opinion between  the surveyor who issued the Certificate of Design Compliance (CDC) for a certified application for a building permit and the City of Melville.  The surveyor certified (as required in the CDC) that in his opinion, the building  if constructed in accordance with the plans and specifications would comply with each building standard that applied to it.  The City of Melville, on review of all the documents, did not consider that the building would comply.  On that basis the City of Melville refused the certified application.

S22 of the Building Act empowers the permit authority to refuse an application where there is an error in the information provided for the application.

The Tribunal held that:

[at 34] … There is, however, a power given to the permit authority to refuse the grant of a building permit where an error is detected in information provided for the application.

[at 35] … there is, in our view, no reason why an erroneous opinion contained within [the CDC] cannot be said to be an error for the purposes of s.22 of the Building Act.

[at 36] …Where, however, in the course of that analysis, for any reason the permit authority forms a genuine belief that there is an error as to compliance, we do not consider it inconsistent with the scheme of the Act that the power under s 22 to refuse to grant the application is enlivened.

At first glance of the decision, it would be fair to query the effectiveness of the certified application process given it is not uncommon for qualified experts, including surveyors, to form different opinions from time to time.  The certified regime is set up to contemplate that the permit authority will not overly scrutinise the application documents given the CDC and we would expect that most permit authorities would have no interest in taking on additional work when it is not required.  Other factors, however, may change the motivations of one permit authority to the next as to how it will treat a particular certified application.

Fortunately within its decision the Tribunal reinforced the intent of the certified application process and the legislation generally and made in summary a comment that:

[at 36] … Undoubtedly the Building Act contemplates that applications for the issue of the building permit will not be subjected to more than one analysis to ascertain compliance with relevant building standards.  The provisions of s 144 of the Building Act make that position quite clear.  Mostly, therefore, the terms of a certificate of design compliance will not be subjected to review, and a permit authority will confine itself to considering whether it is satisfied of those matters of which s 20 requires it to be satisfied before the obligation to grant the building permit arises.

On 10 August 2012 the WA Local Government Association (WALGA) issued a brief to all councils on the Tribunal’s decision. After outlining the case and decision, the recommendation was:

…if a Permit Authority does review a CDC and does form a different opinion to the certifying building surveyor, the Permit Authority should bring the error to the attention of the certifying building surveyor in the first instance and provide an opportunity to withdraw/amend the application.  If agreement  on the difference of opinion cannot be reached, the matter can be referred to the Building Commission for advice or determined by review by the State Administrative Tribunal under s119.

The upshot is:

• yes a permit authority can reject a certified application on the basis it disagrees with the opinion of the surveyor in the CDC;
• but, the practical intent (and way in which the Building Commission (Commission) and WALGA propose to treat the matter) is that this is not the norm and permit authorities should not use that power to undermine the certified process; and
• there is still the right of review under s119 of the Building Act of a permit authority’s decision on a permit application.

Part 3 – Disputes, compliance  and enforcement

The new complaints process seems to be working a treat – only issue felt within the legal community and building industry is that the Commission may still be too quick to refer matters to the Tribunal.  This is understandable, at least initially, as it was a major reform, there were a large number of legacy matters which required administrative processing (although handled by the Tribunal) and the Commission being the first port of call for all complaints lodged.  The only real shot parties will get at amicably resolving or mediating the dispute will be while it remains at the Commission because once it is at the Tribunal, their policy with building matters is generally not to mediate and to list it as quick as possible for hearing.  Overall though, a big tick.

We’re beginning to see the tough new provisions designed to tighten the strings on building standards in WA come into play.  By way of a couple of examples:

• An owner-builder is currently being prosecuted by the City of Stirling under s29(1)(a) and 29(1)(b) of the Building Act for allegedly commencing or carrying out in June 2012 building works other than in accordance with the plans and specifications set out in the applicable certificate of design compliance.  It is alleged, amongst other things, that the owner-builder altered floor plans, relocated the kitchen, added a balcony and changed location of windows.  The matter is ongoing, but illustrates circumstances which have triggered a local council to take enforcement steps under the Building Act.  The building permit was originally issued under the old regime but by transitional provisions is deemed to be under the new regime.  The penalty under both regimes is a maximum fine of $50,000, however under the new regime that fine increases substantially for the second and further offences.

• The Commission has recently investigated, as a disciplinary matter, whether a home renovation company had been performing building works without building permits in place and whether that amounted to negligent conduct under s51(3)(e) of the Building Services (Registration) Act 2011.  The Commission has the power on disciplinary matters to suspend or cancel a builder’s registration for negligent conduct.  Investigations are ongoing, but it raised a critical question as to what type of renovation/alteration works would require a permit under the new regime.  After the new regime came into effect in April 2012, the builder received conflicting written advice from some permit authorities that if the works were aesthetic and not structural, they would not require a permit.  That is not strictly the test that applies for exemptions for renovation works as set out in Item 2 of Schedule 4 of the Regulations.  Certain aesthetic works may not actually fit within the exception if it affects how the building complies with the BCA.  For example, where the building was compliant by having an external waterproofing coating, such as AcraTex, in lieu of weepholes but during renovations to achieve an aesthetic change a different external coating or finish is used, the building may no longer comply with waterproofing performance requirements under the BCA.  Item 2 of Schedule 4 of the Regulations must be closely considered and in particular whether the proposed renovations will affect the building’s compliance with building standards.

Given the time involved in the average construction job and the relatively short time the new regime has been in place we are still largely in this “transitional” period where we are yet to see the full effects of regulation, compliance and enforcement under the new regime.  I expect within the next 12 months we will be able to see more examples of where the new regime differs from the old and how the industry may have benefited.

At this stage, the Tribunal has only delivered decisions on a handful of cases dealing with the Building Act.

Part 4 – Tying off loose ends

What constitutes “adversely” affecting  neighbouring land? 

Those within the industry have reported that some councils had formed the view that neighbours were always “affected” by building work and were insisting on consents being obtained in many circumstances.

The definition under the Building Act is inclusive.  It provides circumstances that it specifically includes, but is not limited to.  Those circumstances are works that:

• reduce the stability or bearing capacity of the land or a building or structure on the land;
• damage, or reduce the structural adequacy of, a building or structure on the land; or
• the changing of the natural site drainage in a way that reduces the effectiveness of the drainage of the land or existing or future buildings or structures on the land.

The given circumstances assist in interpreting what else may fall within the meaning.  It would seem that the circumstance has to have some physical connection to the neighbouring land or building on that land.  In my view, this meaning and relevant provision under the Building Act is not intended to capture things like odour, noise or lighting commonly occurring during normal construction works and which may otherwise be considered to adversely affect neighbours.

The Commission state on their website that a permit authority may take into account (in satisfying themselves that the permit application complies with the relevant provisions of the Building Act) a statement signed by a builder, surveyor, architect or engineer that the land beyond the boundaries of the work area will not be adversely affected.  This kind of statement  is not binding on the permit authority but is a common sense approach to addressing any potential confusion that might arise during the permit application process.

The prudent builder would obtain consent when in doubt, but would be entitled to resist unreasonable requests from permit authorities for consents which clearly fall outside the scope of the intended meaning.

Magistrates Court process for resolving consent  disputes

I am not aware of any standard forms or processes that have been developed through the Magistrates Court to deal with situations where a person refuses to provide a consent required under the Building Act.

Nor am I aware of the Magistrates Court process being used to resolve a consent dispute yet, but would imagine that this would only be a matter of time.

Fortunately with the recent amendments, vacant land is now exempt from the requirement to obtain consent and we had anticipated that this would have been a large source of the need to apply for an order in the Magistrates Court, given issues identifying and locating owners.

Minor changes to design  during construction

When the reforms were first introduced, there was some discussion about where minor changes occur during the course of the works, such as slight changes to the position of a sink, a door or a light fitting. Under the old regime, the industry (including local governments) generally treated these minor changes with the odd “red pen” amendment or in a final approval of the as constructed plans at practical completion.  Sometimes approval wouldn’t have been sought or insisted upon at all.

The Building Act is clear on this.  If it is included in the plans and specifications approved by the permit authority, then it must be followed exactly or the person named on the permit will be exposed to fines for breaching s29 of the Building Act.  An application for “retrospective” approval (a Building Compliance Certificate) may be applied for and issued to approve the changes after they have been performed but it will not excuse a person’s liability for breaching s29.  Builders can no longer expect that permit authorities or the Commission will turn a blind eye.

Best practice under the new regime requires the builder to first obtain a further permit with respect to the change in works only, before those works are performed.  With respect to that further permit application, the criteria to be satisfied under the Building Act is assessed against the change in works as they fit into the overall build.  So, for example, if the scope of works associated with the change or deviation from the original plans would not, of itself, require planning approval under the Planning and Development Act 2005, then no further planning approval would need to be obtained and provided with the further permit application.  Minor changes are unlikely to attract the substantial steps involved in the original permit application.  However a substantive change which affects the use (for example a mezzanine floor used as a study changed into a full sized second storey with bedroom) will likely involve a substantial further application with supporting planning approvals.

If the changed works were not specifically set out in the plans or specification that was approved in the original permit, then provided the changed works fit within the nature of the exemptions under Schedule 4 of the Regulations no further permit is required.

Dealing with permit  authorities

As mentioned in the Miller decision, where a dispute may arise with the permit authority on an application for a permit, the mechanism for resolving that dispute is to refer it to the Tribunal under s119 of the Building Act.  The Commission is also a worthwhile informal avenue to turn to at first instance to try and resolve disputes.

Although ss6(3) and 7 of the Building Act require a person to apply for the building permit to the local government where the building works are being performed, other permit authorities can be engaged, just as you could engage a private building surveyor, to provide certificates such as the CDC.  This creates competition and options within the marketplace but also assists in circumstances where some local governments do not have the resources of an in-house building surveyor or an in-house surveyor who is most skilled and experienced for a particular building project.

Under Regulation 4, the Building Commissioner is the prescribed person who is authorised under the Building Act to approve all forms and notices.  Only forms and notices that are issued and approved by the Commission are lawful under the Building Act.  Other forms developed by permit authorities or builders that attempt to deal with those forms, applications or notices required under the Building Act should not be used or relied upon.

Technical certificates

The Regulations have still not prescribed any circumstances where a technical certificate is required (from a specialist person such as an architect).

Architects and other specialists alike can submit statements, by way of a technical certificate, with the plans and specifications to be considered by the surveyor issuing the CDC that demonstrate how the design will ensure compliance with a particular building standard.  Although the surveyor (or permit authority) must ultimately be satisfied in performing their task under the Building Act (and is not bound to accept such statements),  by s144 of the Building Act they expressly do not have a duty to check the accuracy of a technical certificate or have an obligation to form their own view on the subject matter of the technical certificate.

True private  certification

Industry stakeholders are keen to see “true” private certification unfold in WA, as it is in eastern states.

This would see private building surveyors assess, approve and issue building permits shifting all of the work and responsibility away from local governments.