Builders beware: NSW cracks down on the use of unsafe building products

unsafe building products

The Grenfell Tower and Lacrosse fire disasters. Most of us will remember the fires which ripped through the Grenfell apartment tower in London in June 2017 and the Lacrosse building in Melbourne in 2014.

The Grenfell fire contributed to the deaths of 80 people. It’s believed that the external cladding which formed part of the building may have accelerated the spread of the fire.

In the wake of these disasters there has been much discussion in Australia about the use of certain building materials, including cladding, and how they can be regulated.

As part of the NSW Government’s 10 point plan for fire safety in response to the Grenfell fire, the Building Products (Safety) Bill 2017 was introduced to NSW Parliament on 16 November 2017. The legislation came into effect on 18 December 2017.

What’s changed? A lot!

The objective of the Building Products (Safety) Act 2017 (NSW) is to ban the use of unsafe building materials and to regulate buildings that have already been constructed using certain materials which are defined to be ‘unsafe’.

The Commissioner for Fair Trading will have new powers to prohibit the use of certain building products. A prohibition which comes into effect will be a ‘building product use ban’ which will remain in force until it is revoked by the Commissioner.

The Commissioner will have wide sweeping powers including the power to require remediation and restoration of buildings and to undertake investigations.

What is considered to be a safety risk and what will happen if banned products are used?

A building will be considered to pose a safety risk if through the use of a certain building product any occupant of the building is likely to be at a risk of serious injury or death arising from the use of that product in the building.

If a building product is used after a use ban has been issued in relation to a product, an offence will have been committed under the Act. Any person or corporation found to be non-compliant will face very large fines. A corporation can be fined up to $1 million, whilst individuals are looking at fines of up to $220,000.

What happens to affected buildings?

If the Commissioner deems a building to be an affected building, they may issue an affected building notice which must include:

1. The location of the building
2. Particulars of the building product use ban and
3. Particulars of the safety risk posed through the use of the product.

Copies of notices must be provided to owners, councils, strata managers, and NSW Fire and Rescue. Details of the building may also be published on the internet if the Commissioner thinks the risk requires publication.

Complying with the National Construction Code won’t be an excuse

Products can be considered to pose safety risks even if the risk only arises in certain circumstances, such as a fire. The difficulty for builders is that a building may comply with the Building Code of Australia and the National Construction Code, whilst still causing a ‘safety risk.’

The Act prevails over the National Construction Code[6], so the fact that a product may comply with the National Construction Code will not be an excuse for non-compliance with the Act.

Far reaching consequences

The new laws change a number of existing NSW laws, including:

  • The Home Building Act 1999
  • Conveyancing (Sale of Land) Regulation 2017
  • Strata Schemes Management Regulation 2016 and
  • Environmental Planning and Assessment Act 1979.

How to manage the risk

Even though rectification orders will be directed at building owners, it is likely that building owners will want to mitigate the risk by passing it on to the builders, designers and third party consultants involved in the design and construction of the building.

If you are in the building industry in NSW, it is crucial that you seek legal advice about how these changes will affect you and the best way to protect your business.

For more information contact the Property, Commercial & Finance Team

Christine Murray — Partner — Property, Commercial & Finance
(02) 6279 4402

Rachael Wood  Associate — Property, Commercial & Finance
(02) 6279 4439