Part 11 Building defects

In this Part—

building bond —see section 207 (1).

building inspector —see section 193 (1).

contract price means the price determined as the contract price in accordance with the regulations.

developer means the developer of the strata scheme by whom or on whose behalf building work to which this Part applies was carried out.

final report means a report prepared under section 201.

interim report means a report prepared under section 199.

residential building work has the same meaning as it has in the Home Building Act 1989.

(1) In this Part—

builder responsible for defective building work means—

(a) the person (the principal contractor) who contracted to do the building work and who contracted with another person (a subcontractor) to do the work for the principal contractor, or

(b) the principal contractor, if the principal contractor did not contract with a subcontractor to do the work.

building work means any work involved in, or involved in co-ordinating or supervising any work involved in—

(a) the construction of a building, or

(b) the making of alterations or additions to a building, or

(c) the repairing, renovation, decoration or protective treatment of a building.

defective building work means building work that—

(a) is residential building work done in such a way that it constitutes a breach of a statutory warranty applicable to the work under Part 2C of the Home Building Act 1989, or

(b) is building work done in such a way that it would constitute such a breach if the building work were residential building work.

(2) For the purposes of this Part, the completion of building work to which this Part applies occurs on the date specified for the completion of residential building work for the construction of a new building for a strata scheme in the Home Building Act 1989 (whether or not the work is residential building work) or on the occurrence of some other event that is prescribed by the regulations as constituting completion of the work.

(1) This Part applies to building work carried out on a building, or a part of a building, that is part of the parcel of a strata scheme, being work that is—

(a) residential building work, or

(b) carried out on a building, or a part of a building, used or proposed to be used for mixed use purposes that include residential purposes.

Note.

The parcel of a strata scheme includes common property and lots in a strata scheme.

(2) This Part applies to building work only if the building work was carried out for the purposes of, or contemporaneously with, the registration of a strata plan or a strata plan of subdivision of a development lot.

(3) This Part does not apply to building work if the work is subject to the requirement to obtain insurance under Part 6 of the Home Building Act 1989 in relation to the work or is not subject to that requirement only because the contract price does not exceed the amount referred to in section 92 (3) of the Home Building Act 1989.

(4) The regulations may prescribe additional building work to which this Part does not apply.

(5) (Repealed)

The approval or consent of an owners corporation under this Part is to be given by a resolution of the owners corporation at a general meeting.

Note.

A resolution at a meeting is to be determined by a simple majority (see clause 14 (1) of Schedule 1). A developer, or lessor of a leasehold strata scheme, is not entitled to vote, or exercise a proxy vote, on a matter concerning building defects (see clause 15 of Schedule 1).

(1) In this Part, building inspector means a person appointed for the purposes of this Part as a building inspector for building work.

(2) A person is qualified to be appointed as a building inspector only if the person is a member of a class of persons prescribed by the regulations for the purposes of this section.

(1) If the initial period of a strata scheme ends not later than 12 months after the completion of building work, the developer of the strata scheme must—

(a) within that period of 12 months, appoint a qualified person as a building inspector to carry out an inspection of, and to report on, the building work and give the Secretary written notice of the appointment not later than 14 days after making the appointment, or

(b) if the developer fails for any reason to appoint a building inspector within that period of 12 months, give the Secretary written notice of the fact not later than 21 days after the end of that period.

Maximum penalty—200 penalty units.

(2) If the initial period for a strata scheme ends later than 12 months after the completion of building work, the developer of the strata scheme must give the Secretary written notice of that fact not later than 21 days after the end of that period of 12 months.

Maximum penalty—200 penalty units.

(1) The developer of a strata scheme must not appoint a building inspector under section 194 to carry out an inspection and to report on building work unless the appointment is approved by the owners corporation by a resolution at a general meeting of the owners corporation.

Maximum penalty—200 penalty units.

(2) If a building inspector proposed to be appointed by a developer to carry out any such inspection has been employed by, or by a contractor of, the developer at any time within the prescribed period preceding the proposed appointment, the developer and the proposed building inspector must disclose that fact to the owners corporation before the owners corporation determines whether or not to approve the appointment.

Maximum penalty—200 penalty units.

Note.

Notice of other connections is also required to be given to the owners corporation under section 197 (4).

(3) An owners corporation may refuse to approve the appointment of a building inspector on any grounds.

(4) The owners corporation must, not later than 14 days after deciding to approve or refuse to approve the appointment of a building inspector by a developer, give the developer and the Secretary written notice of the decision.

Maximum penalty—5 penalty units.

(1) On notification by a developer that the developer has not appointed a building inspector in accordance with section 194 or if the Secretary otherwise becomes aware that a developer has not done so, the Secretary—

(a) is to arrange for the appointment of a qualified person as a building inspector to carry out an inspection of, and to report on, the building work in accordance with this Part, and

(b) must give written notice of the appointment to the developer and the owners corporation as soon as practicable after the appointment is made.

Note.

The regulations may provide for a fee for an appointment by the Secretary, see section 204.

(2) An owner of a lot in a strata scheme who objects to an approval of the appointment of a building inspector by the owners corporation may, not later than 14 days after the approval, give the Secretary written notice of the objection and the grounds for the objection.

(3) On receiving the objection, the Secretary may, if the Secretary thinks it appropriate in the circumstances and the building inspector has not carried out an interim inspection—

(a) arrange for the appointment of another qualified person as the building inspector to carry out an inspection of, and to report on, the building work in accordance with this Part, and

(b) give written notice of the appointment to the developer and the owners corporation as soon as practicable after the appointment is made.

(4) The Secretary must give written notice of a decision not to arrange the appointment of a building inspector to the person who made the objection, the developer, the owners corporation and the building inspector approved by the owners corporation.

(5) The appointment of a building inspector arranged by the Secretary under this Part is not required to be approved by the owners corporation.

(1) The developer of a strata scheme must not appoint a building inspector to inspect building work for the scheme if the building inspector is, or was at any time in the 2 years immediately before the appointment, connected with the developer.

Maximum penalty—200 penalty units.

(2) In addition to the circumstances set out in section 7, a building inspector is connected with a developer if the inspector—

(a) has been involved in the design or any aspect of the construction or certification of the building work or any part of the building work to be reported on, or

(b) is connected with any person who has been so involved, or

(c) has a pecuniary interest in any aspect of the building work.

(3) A building inspector is not connected with a developer merely because the inspector has been or is appointed by the developer to carry out a report under this Part on other building work.

(4) A person who is connected with a developer of a strata scheme and who is proposed for appointment as a building inspector under this Part in connection with that scheme must give written notice of the connection to the person making or arranging the appointment, and to the owners corporation before the appointment.

Maximum penalty—100 penalty units.

(1) A building inspector carrying out functions under this Part cannot and does not represent the interests of the developer of a strata scheme and has a duty to act impartially in carrying out the functions of a building inspector under this Part. This subsection has effect despite any condition of the appointment of the building inspector and whether or not the inspector was appointed by the developer.

(2) A building inspector must not, on an understanding that the building inspector will act otherwise than impartially in the course of the building inspector’s functions as a building inspector under this Act, seek or accept, or offer or agree to accept, any benefit of any kind, whether on the building inspector’s own behalf or on behalf of any other person.

Maximum penalty—200 penalty units.

(3) A person must not, on an understanding that a building inspector will act otherwise than impartially in the exercise of the building inspector’s functions as a building inspector under this Act, give, or offer to give, any benefit of any kind, whether to the building inspector or any other person.

Maximum penalty—200 penalty units.

(1) The developer of a strata scheme must, within 28 days after a building inspector is appointed under this Division to inspect building work for the scheme (or within any other period prescribed by the regulations), provide the following documents to the building inspector—

(a) a document that identifies any building defects of which the developer is aware in the building work, including any building defects considered at the first annual general meeting of the owners corporation,

(b) any other documents relating to the building work that are prescribed by the regulations.

Maximum penalty—200 penalty units.

(2) The Secretary may provide a building inspector with any of the documents referred to in subsection (1) that are in the possession or under the control of the Secretary.

(1) A building inspector appointed under this Division is to carry out an inspection of the building work, and provide an interim report, not earlier than 15 months and not later than 18 months after the completion of the building work.

(2) The interim report must—

(a) be in the form and contain the matters prescribed by the regulations for the purposes of this section, and

(b) without limiting paragraph (a), identify any defective building work of a kind required by the regulations to be reported on, and

(c) if reasonably practicable, identify the cause of that defective building work.

(1) The developer of a strata scheme must, not later than 18 months after completion of the building work—

(a) arrange for the building inspector who prepared the interim report on the building work to carry out a final inspection of, and provide a final report on, the building work and give written notice to the Secretary of the arrangement not later than 14 days after making the arrangement, or

(b) if the original building inspector is not available, give the Secretary written notice of that fact not later than 14 days after becoming aware that the building inspector is not available, or

(c) make an application to the Secretary under this section.

Maximum penalty—200 penalty units.

(2) On notification under this section that the original building inspector is not available or if the Secretary otherwise becomes aware that a developer has not complied with subsection (1), the Secretary—

(a) is to arrange for the appointment of a qualified person as a building inspector to carry out the final inspection of, and provide the final report on, the building work, and

(b) must give written notice to the developer and the owners corporation of the appointment as soon as practicable after it is made.

(3) The Secretary is not required to arrange for a final inspection and report under this section if the interim report was prepared by a building inspector arranged by the Secretary and the report did not identify any defective building work.

(4) The Secretary may, on application by a developer, determine that the developer is not required to arrange for a final report under this section if the interim report did not identify any defective building work and the Secretary thinks it appropriate in the circumstances of the case to make the determination.

(5) The Secretary must give written notice of any decision that a final inspection and report is not required to the owners corporation and the developer not later than 28 days after the decision is made.

(6) In any case in which a final report is not required, the interim report is taken to be the final report for the purposes of this Part.

(1) A building inspector appointed to carry out a final inspection is to carry out a final inspection of the building work, and provide a final report, not earlier than 21 months and not later than 2 years after the completion of the building work.

(2) The final report must—

(a) be in the form and contain the matters prescribed by the regulations for the purposes of this section, and

(b) without limiting paragraph (a), identify defective building work identified in the interim report that has not been rectified, and

(c) identify any defective building work arising from rectification of defective building work previously identified in the interim report, and

(d) specify how the defective building work identified in the report should be rectified.

(3) The final report must not contain matters that relate to defective building work not identified in the interim report, other than work arising from rectification of defective building work identified in the interim report.

(1) A building inspector must give a copy of an interim report or a final report to the following persons not later than 14 days after completing the report—

(a) the developer,

(b) the owners corporation, if the initial period has ended,

(c) the Secretary,

(d) the builder responsible for any defective building work identified in the report.

(2) An owners corporation must give written notice to the owners of lots in the strata scheme of the receipt of an interim report or a final report on building work in connection with the scheme not later than 14 days after receiving the report.

(3) The notice must contain the particulars, if any, prescribed by the regulations for the purposes of this section.

Maximum penalty—5 penalty units.

(1) A building inspector appointed to prepare a report under this Division may enter and inspect any part of the parcel of the strata scheme.

(2) The building inspector must give at least 14 days written notice to the owners corporation and the owner and any occupier of any affected lot of an intention to enter any part of the parcel of the strata scheme.

(3) The owners corporation, any person who has exclusive use of common property, a strata managing agent, any building manager or manager of the common property and any owner or occupier of a lot must provide any assistance that is reasonable to enable an inspection to be carried out in accordance with this Division.

(4) A person must not, without reasonable excuse, refuse a building inspector access to any part of the parcel of a strata scheme or a lot in the strata scheme, or obstruct or hinder a building inspector, in the exercise of the inspector’s functions under this Act.

Maximum penalty—10 penalty units.

(1) The costs of obtaining an inspection and report by a building inspector under this Division are to be borne by the developer, whether or not the building inspector was appointed by the developer.

(2) The regulations may provide for the fees that may be charged for an inspection or a report under this Division.

(3) The regulations may provide for a fee for the arrangement by the Secretary of the appointment of a building inspector under this Division.

(1) A report prepared under this Division must be considered by the Tribunal for the purposes of determining a building claim under Part 3A of the Home Building Act 1989 and by any other court in proceedings relating to the building work the subject of the report, if the report is brought to the attention of the Tribunal or the court in the proceedings.

(2) The report does not bind the Tribunal or court.

(1) The builder who is responsible for defective building work, or an employee, agent or contractor of any such person, (the builder) may, at any time after the completion of the building work, enter any part of the parcel of the strata scheme that the person may reasonably require for the purpose of or in connection with rectifying the building work.

Note.

See sections 122 and 123 for other powers to enter the parcel of a strata scheme.

(2) The builder must give at least 14 days written notice to the owners corporation, the developer and the owner and any occupier of any affected lot of an intention to enter any part of the strata parcel for the purpose of or in connection with rectifying defective building work.

(3) A builder who enters a lot after giving notice in accordance with this section may enter the lot only at a time that is reasonable in the circumstances or at a time agreed with the owner or, if the owner is not the occupier of the lot, the occupier.

(4) The builder is not bound by any provision of a report under this Division for the purpose of or in connection with rectifying defective building work.

(5) A person must not, without reasonable excuse, refuse access to a builder to any part of the parcel of the strata scheme or a lot in a strata scheme if that access is permitted by this section.

Maximum penalty—10 penalty units.

(6) The duty under section 18BA of the Home Building Act 1989 to allow reasonable access does not require a builder to be given reasonable access to the parcel of a strata scheme at any time while a building inspector is carrying out a final inspection under this Part on any part of the parcel.

(7) If the builder who is responsible for defective building work is unavailable because the builder has died, is insolvent, has ceased to exist or is unavailable for any other reason prescribed by the regulations for the purposes of this section, the developer may appoint another person to rectify building work under this section. Any such person is taken to be the builder for the purposes of this section.

(1) The developer of a strata scheme must give the Secretary a security (a building bond), in terms acceptable to the Secretary, for building work to which this Part applies before an application is made for an occupation certificate under the Environmental Planning and Assessment Act 1979 for any part of a building for which the building work was done.

(2) The amount secured by a building bond is to be the prescribed percentage of the contract price for the building work.

(3) The purpose of the building bond is to secure funding for the payment (up to the amount secured by the bond) of the costs of rectifying defective building work identified in a final report under this Part.

(4) If the building work to which this Part applies comprises only part of the building work to which a contract price applies, the amount secured is to be the prescribed percentage of the part of the contract price applicable to the building work to which this Part applies.

(5) A developer must not fail to comply with this section.

Maximum penalty—10,000 penalty units and, in the case of a continuing offence, a further 200 penalty units for each day the offence continues.

A developer must not knowingly give to the Secretary information in relation to the contract price of building work, or the amount required to be secured by the building bond for building work, that is false or misleading in a material particular.

Maximum penalty—

(a) in the case of a corporation—1,000 penalty units, or

(b) in any other case—200 penalty units.

A building bond may be in one or more of the following forms—

(a) a bank guarantee issued by an authorised deposit-taking institution,

(b) a bond issued by an approved insurer,

(c) another form of security that is prescribed by the regulations for the purposes of this section.

(1) The whole or part of the amount secured by a building bond may be claimed or realised by the Secretary for payment as follows—

(a) to the owners corporation to meet the costs of rectifying defective building work identified in the final report on the work, if the report identifies the defective building work,

(b) to the owners corporation, with the consent of the developer, on application to the Secretary by the owners corporation and the developer,

(c) to a building inspector to meet the costs of the inspector for an inspection or report under Division 2,

(d) to a person who has prepared a report referred to in section 209A, to meet the developer’s share of the costs of obtaining the report.

(1A) The amount that may be claimed or realised for payment under subsection (1) (a) is an amount that the owners corporation and developer have agreed should be paid or the amount determined by the Secretary.

(2) An application under subsection (1) (b) must be made within the period prescribed by the regulations for the purposes of this section.

(2A) An amount may be claimed or realised for payment under subsection (1) (c) or (d) only if the costs concerned have not been paid and the developer—

(a) has died or ceased to exist, or

(b) is bankrupt or insolvent, or

(c) after due search and inquiry, cannot be found in Australia.

(3) An amount secured by a building bond must be claimed or realised under this section within the period prescribed by the regulations.

(4) The developer must take any necessary steps to enable the Secretary to claim or realise an amount secured by a building bond given by the developer and required for payment in accordance with this Division.

Maximum penalty—10 penalty units.

(5) The Secretary may refuse to claim or realise an amount, or reduce the amount otherwise payable, under this section if the Secretary is satisfied that the developer or the builder responsible for defective building work was unreasonably refused access to the strata parcel for the purposes of rectifying that work.

(6) The Secretary must give the owners corporation and the developer of a strata scheme written notice of any proposed payment under this section in relation to the strata scheme.

(1) For the purposes of enabling the Secretary to determine an amount under section 209 (1A), the Secretary may—

(a) require the owners corporation or the developer (or both) to provide any information or reports that the Secretary may require, or

(b) arrange for a person whom the Secretary considers to be appropriately qualified to provide a report to the Secretary in relation to the work required or the costs involved in rectifying the defective building work concerned.

(2) The costs of obtaining any report arranged by the Secretary are to be borne by the owners corporation and developer in equal shares, except in the circumstances (if any) specified in the regulations for the purposes of this section.

(3) The Secretary may give to a person whom the Secretary has arranged to provide the report any documents relating to the building work that the Secretary considers would assist the person to prepare the report.

(1) Purposes for which bond amount may be used An owners corporation for a strata scheme that is paid the whole or part of an amount secured by a building bond must, within a reasonable time, use the amount paid—

(a) for or in connection with rectifying the defective building work identified in the final report (whether or not the work affects the common property or any other part of the parcel), or

(b) for costs related to the rectification.

(2) Repayment of excess amounts to developer An owners corporation must—

(a) repay to the developer any amount secured by a building bond that has been paid to the owners corporation and is not required for a purpose specified in subsection (1), and

(b) give the developer written notice of the completion of the rectification of the defective building work.

Maximum penalty—10 penalty units.

(3) (Repealed)

(4) Owner not entitled to building bond This Act does not confer on the owner of a lot any entitlement to be paid any part of an amount secured by a building bond that is paid in respect of defective building work affecting the owner’s lot.

(5) Payments with consent not affected This section does not prevent the owners corporation from retaining any amount secured by a building bond that has been paid to the owners corporation, and using it for any purposes, with the consent of the developer.

The Secretary may provide to a developer any release necessary to enable a building bond for building work provided by the developer to be cancelled—

(a) if an interim report on the building work does not identify any defective building work and the Secretary thinks it appropriate in the circumstances of the case to enable the building bond to be cancelled, or

(b) on application by the developer, with the agreement of the owners corporation, if part of the amount secured by the building bond has been claimed or realised by the Secretary, or

(c) in any other circumstances specified in the regulations.

(1) The Tribunal may, on application, make an order requiring the occupier of a lot or part of a lot in a strata scheme or any other person to allow access to the lot or any other part of the parcel for the purpose of or in connection with an inspection under this Part or rectifying defective building work.

(2) An application under subsection (1) may be made by an owners corporation, the developer, a building inspector or a person entitled to enter any part of a parcel of a strata scheme under section 203 or 206.

(3) The Tribunal may, on application by an owners corporation, the developer or the Secretary, make an order specifying the amount of the contract price of building work for the purpose only of determining the amount required to be secured by a building bond.

Note.

The contract price is determined in accordance with the regulations. See the definition of contract price in section 189.

(3A) The developer may make an application for an order under subsection (3) only in the circumstances prescribed by the regulations.

(4) An application under this section is to be made to, and determined by, the Supreme Court (and not the Tribunal) if the matter is incidental to other proceedings being dealt with by the Court.

(5) A determination under this section of the amount of the contract price of building work does not bind a court or tribunal in any other proceedings.

(1) The Secretary may recover from a developer, as a debt in a court of competent jurisdiction, any amount required to be secured by a building bond given by the developer to the Secretary under this Part if—

(a) the building bond has not been given to the Secretary, or

(b) the building bond has been given to the Secretary but the amount secured by the building bond is less than the amount required under this Part.

(2) An owners corporation may claim from the Secretary the whole or part of an amount recovered under this section for payment to the owners corporation.

(3) Section 209 applies, with any necessary modifications, in relation to any such claim in the same way as that section applies in relation to a claim by the Secretary for payment of an amount secured by a building bond.

(4) The Secretary may refuse to pay an amount under this section in the same circumstances as the Secretary may refuse to claim or realise an amount under section 209.

(5) Section 210 (except section 210 (2)) applies, with any necessary modifications, in relation to an amount paid to an owners corporation under this section in the same way as it applies to an amount secured by a building bond that is paid under section 209.

(6) An owners corporation must—

(a) repay to the developer any amount that has been paid to the owners corporation under this section and is not required for a purpose specified in section 210 (1), and

(b) give the developer written notice of the completion of the rectification of the defective building work.

Maximum penalty—10 penalty units.

(1) In this division—

building element has the same meaning as in the Design and Building Practitioners Act 2020.

building product has the same meaning as in the Building Products (Safety) Act 2017.

decennial insurance means insurance of the kind described in subsection (2) that—

(a) is taken out by the developer of a strata scheme in favour of the owners corporation for the scheme, and

(b) insures against relevant defects in the building elements of the common property for one or more buildings in the scheme—

(i) for 10 years, and

(ii) on a strict liability basis.

DLI policy means a policy of decennial insurance.

relevant defect means—

(a) a defect in a building element that—

(i) is attributable to a failure to comply with—

(A) the performance requirements of the Building Code of Australia within the meaning of the Environmental Planning and Assessment Act 1979, or

(B) the relevant Australian Standards, or

(C) the relevant approved plans within the meaning of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020, and

(ii) causes or is likely to cause—

(A) damage to the building or part of the building, or

(B) a risk of death or serious injury to one or more persons, or

(b) a defect in a building product or building element that—

(i) is attributable to defective design, defective or faulty workmanship or defective materials, and

(ii) causes or is likely to cause—

(A) the inability to inhabit or use the building or part of the building, or

(B) the destruction of the building or part of the building, or

(C) a threat of collapse of the building or part of the building, or

(c) the use of a building product in contravention of the Building Products (Safety) Act 2017, or

(d) the installation of a vertical transportation product, if the use of the product in the building causes or is likely to cause a risk of death or serious injury to one or more persons, or

(e) a defect of a kind prescribed by the regulations.

vertical transportation product means machinery installed in a building and designed to move persons, vehicles or goods and includes the following—

(a) a lift,

(b) an escalator,

(c) a moving walkway,

(d) parking systems and equipment.

(2) For subsection (1), definition of decennial insurance, the insurance must—

(a) comply with criteria prescribed by the regulations, and

(b) be in a form acceptable to the Secretary.

The following provisions do not apply to a developer of a strata scheme who satisfies the Secretary that the developer has, for building work to which this part applies, obtained decennial insurance—

(a) Division 2, other than section 206,

(b) Division 3.

(1) A regulation may exempt a person from complying with the Home Building Act 1989, section 92 or 96, or both, in relation to building work if a developer has notified the Secretary of the developer’s intention to obtain decennial insurance for the building work.

(2) The regulation may—

(a) provide that the exemption is subject to specified conditions, and

(b) require the developer to give information to specified persons, including specifying the way and time within which the information must be given, and

(c) provide that the Secretary may require information be given by the developer to specified persons, including that the Secretary may—

(i) require information be included in contracts for purchase or in disclosure to potential purchasers before exchange of contracts, and

(ii) specify the way and time within which the information must be given, and

(d) if a regulation is made under subsection (1)—extend the application of a provision of this division that applies to the Secretary under this Act to the Secretary under the Home Building Act 1989, and

(e) make other provision about the exemption and the provision of information.

(1) The Secretary may, by written order, direct a person who has issued a DLI policy to give the Secretary the following information, as specified in the direction—

(a) the number, terms and premiums payable of DLI policies issued by the person,

(b) the names of developers to whom DLI policies have been issued,

(c) the buildings covered by DLI policies,

(d) the number and value of claims made under DLI policies,

(e) circumstances where a developer has failed to meet a term or condition of a DLI policy, including specific details about the developer and the term or condition not met,

(f) other information prescribed by the regulations.

(2) To avoid doubt, a direction under this section may—

(a) apply generally or specifically, and

(b) require information to be given on the occurrence of a specified event or at regular specified times, and

(c) specify the way and time within which the information must be given.

(3) A person must comply with a direction under this section.

Maximum penalty—

(a) 500 penalty units, and

(b) for a continuing offence—200 penalty units for each day the offence continues.

(1) The Secretary may, by written order, direct a developer who has obtained a DLI policy to give the Secretary or another specified person information about the insurance, as specified in the direction.

(2) To avoid doubt, a direction under this section may—

(a) apply generally or specifically, and

(b) require information to be given on the occurrence of a specified event or at regular specified times, and

(c) specify the way and time within which the information must be given.

(3) A person must comply with a direction under this section.

Maximum penalty—

(a) 500 penalty units, and

(b) for a continuing offence—200 penalty units for each day the offence continues.

A person must not knowingly give the Secretary information in relation to decennial insurance that is false or misleading in a material particular.

Maximum penalty—

(a) for a corporation—1,000 penalty units, or

(b) otherwise—200 penalty units.

(1) The Tribunal may, on application, make an order requiring the occupier of a lot or part of a lot in a strata scheme or another person to allow access to the lot or another part of the parcel for the purpose of or in connection with—

(a) an inspection authorised under a DLI policy given to the strata scheme’s owners corporation at the time of first occupation of a lot in the strata scheme, or

(b) determining whether building work is defective building work, or

(c) rectifying defective building work.

(2) An application under subsection (1) may be made by the following—

(a) an owners corporation,

(b) the developer,

(c) the builder responsible for the defective building work or an employee, agent or contractor of the builder,

(d) a person who has issued a DLI policy referred to in section 211AA that covers the defective building work.

(3) The developer may make an application for an order under subsection (2) only in the circumstances prescribed by the regulations.

(4) An application under this section must be made to, and determined by, the Supreme Court, and not the Tribunal, if the matter is incidental to other proceedings being dealt with by the Court.

(1) The regulations may prohibit the issue of one or more of the following unless evidence of the issue of decennial insurance, or the giving of a building bond under Division 3, has been given to the Secretary—

(a) a complying development certificate or a certificate under the Environmental Planning and Assessment Act 1979, Part 6,

(b) a strata certificate within the meaning of the Strata Schemes Development Act 2015.

(2) The regulations may specify the following—

(a) the type of evidence that must be given,

(b) the way in which the evidence must be given to the Secretary.

(3) A certificate issued in contravention of a prohibition under this section is invalid.

(4) To avoid doubt, evidence of the issue of decennial insurance includes evidence of the issue of a certificate of currency for decennial insurance that comes into force on the occupation of a building.

Regulations may be made about the following—

(a) requiring developers to give notice to the Secretary of an intention to obtain decennial insurance,

(b) requiring developers to give copies of certificates of currency for decennial insurance to the Secretary before specified events or actions,

(c) fees payable to the Secretary for assessing whether a DLI policy—

(i) meets, in the Secretary’s opinion, the criteria prescribed by the regulations under section 211AA(2)(a), and

(ii) is in a form acceptable to the Secretary under section 211AA(2)(b),

(d) matters of a savings or transitional nature consequent on a change in regulations under this part or a decision of the Secretary under this part.

Example of changes—

a change in a prescribed percentage or a change in the type of decennial insurance form acceptable to the Secretary

The Secretary may publish information obtained under sections 211AD and 211AE.

A direction may be given under this division to a person in relation to a matter even though the person is outside the State or the matter occurs outside the State, so long as the matter affects or relates to building work carried out in the State or to related goods and services supplied in the State.

(1) In this Division—

authorised officer means—

(a) an employee of the Department for the time being appointed under this Division as an authorised officer, or

(b) an investigator appointed under section 18 of the Fair Trading Act 1987.

(2) The Secretary may appoint any employee of the Department as an authorised officer for the purposes of this Division.

(3) An authorised officer is to be provided by the Secretary with a certificate of identification.

(4) An authorised officer must, when exercising on any premises any function of the authorised officer under this Division, produce the officer’s certificate of identification to any person apparently in charge of the premises who requests its production.

(1) An authorised officer may exercise the functions conferred under this Division for any of the following purposes—

(a) for the purpose of investigating, monitoring and enforcing compliance with the requirements imposed by or under this Part,

(b) for obtaining information or records connected with the administration of this Part,

(c) for the purpose of administering or executing this Part (including any regulations made under this Part).

(2) In this Part, a reference to an authorised purpose is a reference to any purpose referred to in subsection (1).

(1) An authorised officer may, by notice in writing given to a person, require the person to furnish to the authorised officer any information or records (or both) that the authorised officer may require for an authorised purpose.

(2) The notice must specify the manner in which, and a reasonable time by which, the information or records are to be furnished.

(3) The notice may only require the person to furnish existing records that are in the person’s possession or that are within the person’s power to obtain lawfully.

(4) An authorised officer to whom any record is furnished under this section may take copies of it.

(5) If any record required to be furnished is in electronic, mechanical or other form, the notice requires the record to be furnished in written form, unless the notice otherwise provides.

(1) An authorised officer may require a person whom the authorised officer suspects on reasonable grounds to have knowledge of matters in respect of which information is reasonably required for an authorised purpose to answer questions in relation to those matters.

(2) An authorised officer may, by notice in writing, require a corporation to nominate, in writing within the time specified in the notice, a director or officer of the corporation to be the corporation’s representative for the purpose of answering questions under this section.

(3) Answers given by a person nominated under subsection (2) bind the corporation.

(4) An authorised officer may, by notice in writing, require a person to attend at a specified place and time to answer questions under this section if attendance at that place is reasonably required in order that the questions can be properly put and answered.

(5) The place and time at which a person may be required to attend is to be a place and time nominated by the authorised officer that is reasonable in the circumstances.

A power conferred by section 211D or 211E may be exercised whether or not a power of entry under section 211G is being exercised.

(1) An authorised officer may enter any premises at any reasonable time.

(2) Entry to any premises may be effected with or without the authority of a search warrant.

(3) This section does not empower an authorised officer to enter any part of premises that is used predominantly for residential purposes without the consent of the occupier of the part or under the authority of a search warrant under this Division.

(1) An authorised officer may apply to an issuing officer for a search warrant if the applicant believes on reasonable grounds that a provision of this Part or regulations made under this Part has been or is being contravened on premises.

(2) An issuing officer to whom an application for a search warrant is made under this section may, if satisfied that there are reasonable grounds for doing so, issue a search warrant authorising an authorised officer named in the warrant and any other person named in the warrant—

(a) to enter the premises concerned, and

(b) to search the premises for evidence of a contravention of this Part or regulations made under this Part.

(3) Division 4 of Part 5 of the Law Enforcement (Powers and Responsibilities) Act 2002 applies to a search warrant issued under this section.

(4) Without limiting the generality of section 71 of the Law Enforcement (Powers and Responsibilities) Act 2002, a police officer—

(a) may accompany an authorised officer executing a search warrant issued under this section, and

(b) may take all reasonable steps to assist the authorised officer in the exercise of the officer’s functions under this section.

(5) In this section—

issuing officer means an authorised officer within the meaning of the Law Enforcement (Powers and Responsibilities) Act 2002.

An authorised officer proposing to exercise a power of entry under this Division may, by notice in writing given to the owner or occupier of the premises or to the owners corporation, require the owner, occupier or owners corporation to provide, within a specified time and in a specified manner, any reasonable assistance and facilities that are specified in the notice.

(1) An authorised officer may, at any premises lawfully entered, do anything that in the opinion of the authorised officer is reasonably necessary to be done for an authorised purpose, including (but not limited to) the things specified in subsection (2).

(2) An authorised officer may do any or all of the following—

(a) make any examinations and inquiries that the authorised officer considers necessary,

(b) direct a person to produce records for inspection,

(c) examine and inspect any records,

(d) copy any records,

(e) seize any thing that the authorised officer has reasonable grounds for believing is connected with an offence against this Part or regulations made under this Part,

(f) do anything the authorised officer is empowered to do under this Division.

(3) The power to seize any thing connected with an offence includes a power to seize—

(a) a thing with respect to which the offence has been committed, and

(b) a thing that will afford evidence of the commission of the offence, and

(c) a thing that was used for the purpose of committing the offence.

(4) The power to do a thing under this section includes a power to arrange for that thing to be done.

(5) A power to do something under this section in relation to a thing may be exercised without the consent of the owner of the thing.

(6) In this section, a reference to an offence includes a reference to an offence that there are reasonable grounds for believing has been committed.

(1) An authorised officer who seizes anything under section 211J on any premises must issue the person apparently in charge of the premises with a written receipt for the thing seized.

(2) An authorised officer may retain anything seized under section 211J until the completion of any proceedings (including proceedings on appeal) in which it may be evidence.

(3) A record may only be retained if the person from whom the record was seized is provided, within a reasonable time after the seizure, with a copy of the record certified by the authorised officer as a true copy. The copy is, as evidence, of equal validity to the document of which it is certified to be a copy.

(4) Subsection (2) ceases to have effect in relation to anything seized if, on the application of a person aggrieved by the seizure, the court in which proceedings referred to in that subsection are commenced so orders.

(1) A person must not, without reasonable excuse, refuse or fail to comply with a requirement made of the person under this Division.

Maximum penalty—

(a) in the case of a corporation—40 penalty units, or

(b) in any other case—20 penalty units.

(2) A person is not guilty of an offence of failing to comply with a requirement under this Division to furnish records or information or to answer a question unless the person was warned on that occasion that a failure to comply is an offence.

(1) A person must not, without reasonable excuse, delay, hinder or obstruct an authorised officer in the exercise of the authorised officer’s functions under this Division.

Maximum penalty—

(a) in the case of a corporation—40 penalty units, or

(b) in any other case—20 penalty units.

(2) A person is not guilty of an offence under this section unless, before the alleged offence occurred, the authorised officer produced the authorised officer’s certificate of identification for inspection by the person.

(1) The Secretary may, on the Secretary’s own motion or on application by the developer, owners corporation or a building inspector, vary the period within which an interim report or a final report is to be provided, or any other action is to be done, under this Part, if the Secretary considers it appropriate to do so in the circumstances of the case.

(2) The Secretary must give written notice to the developer, owners corporation or building inspector of the following—

(a) any application under this section,

(b) a decision by the Secretary under this section.

(3) The Secretary is not required to give notice of an application to any person who made the application.

(1) Right to apply for review An interested person may apply to the Secretary for a review of a reviewable decision.

(2) The following persons are interested persons in relation to a reviewable decision—

(a) the developer of a strata scheme to which the decision is related,

(b) the owners corporation of a strata scheme to which the decision is related,

(c) the owner of a lot in a strata scheme to which the decision is related,

(d) any other person prescribed by the regulations for the purposes of this section.

(3) Reviewable decisions The regulations may prescribe decisions under this Part that are to be the reviewable decisions for the purposes of this section.

(4) Applications An application for a review is to be made in accordance with the regulations.

(5) Individuals who may carry out reviews An application for a review of a decision is to be dealt with by an individual other than the person who made the decision who is (if the reviewer is not the Secretary) approved by the Secretary.

(6) The reviewer must be, as far as practicable, an individual—

(a) who was not substantially involved in the process of making the decision under review, and

(b) who is a member of staff of the Department, and

(c) who is suitably qualified to deal with the issues raised by the application.

(7) Powers on review In reviewing a decision, the reviewer is to consider any relevant material submitted by the applicant.

(8) Following the review of the decision, the reviewer may—

(a) affirm the decision, or

(b) vary the decision, or

(c) set aside the decision and make a decision in substitution for the decision that is set aside.

(9) In exercising a function under subsection (8), a reviewer is taken for all purposes to have the right to exercise the same functions in law that the person who made the decision had in making the decision being reviewed.

(10) Reviewer to notify relevant decision maker of decision A reviewer must notify the Secretary of the result of, and the reasons for, his or her decision under subsection (8) as soon as is practicable after making the decision.

(11) Statement of reasons For the purposes of this section, an applicant is notified of the reasons for a decision in a review only if the applicant is given a statement of reasons setting out the following—

(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,

(b) the understanding of the reviewer of the applicable law,

(c) the reasoning processes that led the reviewer to the conclusions the reviewer made.

(12) Status of decisions made on review For the purposes of this Act, a reviewable decision that is affirmed, varied or set aside and substituted under this section is—

(a) taken to have been made by the person who made the original decision (as affirmed, varied or substituted by the reviewer), and

(b) taken to have been made on the date under which the applicant is given a notice of the decision under this section.

(13) No reviews of decisions previously reviewed under this section A person is not entitled to a review under this section of any decision previously reviewed under this section or a decision made under subsection (8).

A matter or thing done or omitted to be done by a building inspector, or a person acting under the direction of a building inspector, does not, if the matter or thing was done or omitted to be done in good faith for the purpose of executing functions under this Part, subject the building inspector or person so acting personally to any action, liability, claim or demand.

(1) A matter or thing done or omitted to be done by a professional association, or an individual acting under the direction of a professional association, does not, if the matter or thing was done or omitted to be done in good faith for the purpose of executing functions under this Part, subject the professional association or individual so acting to any action, liability, claim or demand.

(2) In this section—

professional association means a body that is prescribed by the regulations for the purposes of this definition.

(1) Regulations may be made for or with respect to the following—

(a) building bonds,

(a1) the functions of professional associations, or other bodies, with respect to determining whether persons are qualified to carry out functions as building inspectors,

(a2) registers of persons qualified to be appointed as building inspectors, including the public availability of those registers,

(a3) conditions that may be imposed on the exercise of functions under this Part by building inspectors, including the imposition of conditions by the Secretary or professional associations,

(b) the appointment of a building inspector by the Secretary if a building inspector is no longer available or is not qualified or is otherwise not suitable,

(c) additional circumstances in which the Secretary, rather than the developer, is to appoint a building inspector,

(d) information required to be provided to the Secretary by the developer or the owners corporation in relation to building inspectors and other matters arising from this Part,

(e) nomination of building inspectors for approval by owners corporations,

(f) matters to be disclosed to the owners corporation by a developer seeking approval of a building inspector and the period within which disclosure is to be made,

(g) meetings of owners corporations to consider the approval of the appointment of a building inspector,

(h) the provision of information to a building inspector for the purposes of an inspection or report,

(i) applications to the Secretary for a determination that a final inspection and report are not required,

(j) requirements to be observed in relation to the conduct of a review under section 213.

(2) Without limiting subsection (1) (a), the regulations may provide for the following—

(a) requirements for the provision and maintenance of a building bond,

(b) requirements for additional information or documents to be provided relating to the amount required to be secured by a building bond,

(c) how the contract price is to be determined for the purposes of the amount required to be secured by a building bond,

(d) when a building bond lapses or need not be maintained,

(e) procedures relating to applications for, and the payment of, amounts secured by a building bond,

(e1) procedures to be followed by the Secretary in determining an amount under section 209 (1A),

(f) the period of notice to be given of a proposed payment of an amount secured by a building bond,

(g) fees relating to the provision of building bonds under this Part.

(1) A building bond is payable in respect of defective building work under this Part whether or not—

(a) Part 2C of the Home Building Act 1989 applies to the work, or

(b) the developer is liable to the owners corporation or the owner of a lot in respect of the work.

(2) A developer may recover the amount of any building bond paid to an owners corporation in respect of defective building work for which the developer is not otherwise liable from any person against whom the developer has a cause of action in respect of the defective building work.

(3) Any thing done or omitted to be done under this Part does not affect any action that may be taken, or remedy that may be sought, by or in respect of building work under any other law.

(4) However, any court, tribunal or other body may take into account any payment made, rectification work done or any other action taken in relation to building work under this Part when it is determining a matter relating to the work.

(1) The Minister is to review this Part to determine whether the policy objectives of this Part remain valid and whether the terms of this Part remain appropriate for securing those objectives.

(2) The review is to be undertaken as soon as possible after 1 January 2024.

(3) A report on the outcome of the review is to be tabled in each House of Parliament no later than 1 January 2025.