Whilst the Residential Apartment Building (Compliance and Enforcement Powers) Act 2020 (NSW) (RAB Act) was only enacted 6 months ago, the Building Commissioner has shown his commitment to exercising the new powers conferred on his Department to regulate non-compliant developers and protect the interests of buyers in new residential developments.

The RAB Act commenced on 1 September 2020 and introduced a range of measures to regulate the carrying out of residential building work by developers, including:

1. a new occupation certificate notification scheme; and
2. the conferral of broad investigatory and enforcement power on the Building Commissioner.

(For more information on the RAB Act generally, please see our article from last year.)

As part of the Building Commissioner’s enforcement powers, on 21 December 2020, a Prohibition Order was issued to property developer, Fitz Jersey Pty Ltd (Fitz Jersey), preventing the issue of an occupation certificate and the registration of a strata plan in relation to its development at 563 Gardeners Road, Mascot NSW 2020.

Pursuant to section 9(1)(c) of the RAB Act, the Building Commissioner can make an order prohibiting the issue of an occupation certificate and/or the registration of a strata plan for a strata scheme in relation to a residential apartment building, if it is satisfied that a serious defect exists in the building. On two separate occasions last year, compliance officers from the Department of Customer Services conducted inspections of the building at Gardeners Road. During these inspections it was observed that building work carried out in relation to the fire safety systems was non-compliant with the performance requirements in the Building Code of Australia, which could result in serious defects.

The issue of a Prohibition Order has serious implications on a developer. Not only does it reflect poorly on their reputation in the industry (a register of Prohibition Orders issued is published publicly on the Fair Trading website), but it also has serious financial consequences as a developer cannot settle on contracts for sale and purchasers cannot lawfully occupy a building without an occupation certificate.

In November 2020, the Building Commissioner issued a Building Work Rectification Order pursuant to section 33 of the RAB Act also in relation to the building’s inadequate and non-compliant fire safety systems.

Residential developers should take heed of this as an example of the Building Commissioner’s willingness to exercise the new powers conferred by the RAB Act.

If you have questions about how the RAB Act may affect your project or would like further information on any of the above, please contact us at [email protected] or (02) 9248 3450.