A fundamental overhaul of building industry regulation in New South Wales will have a significant impact upon architects, according to the Architects Registration Board in that state.
In a statement following the coming into force of the state’s Home Building Amendment Act 2014 on January 15, the Board called upon architects throughout the state to familiarise themselves with the changes and consider them carefully, especially when spelling out roles and responsibilities of respective parties when awarding the building contract.
“Architects are typically engaged by owners to design a house, or by developers for an apartment building,” the Board said in a statement.
“Often this includes administering the construction contract between the owner or developer, and the builder. It’s how they do this that’s important. And often a series of extra protections come as standard. These protections matter, because the big changes to the Act are about how defects will be identified, rectified and paid for.”
A key aspect of the changes revolves around defects, which could impact whether or not a building receives its practical completion and could affect architects who are responsible for administering the construction contract of a given project.
Whilst the same warranty periods apply as before (builders must still warrant their work for two years after completion and six years in the case of what were previously considered to be ‘structural defects’), the concept of a ‘structural defect’ (i.e. building defects which have severe or significant effect on the building) has been replace by a definition of ‘major defect.’
According to the Fair Trading NSW web site, this is considered to be “a defect occurring in a ‘major element’ of the building that causes or may cause the building or part of it to be uninhabitable, to be unable to be used for its intended purpose or the partial or total collapse or destruction of the building, including but not limited to internal or external loadbearing component and, for the first time, fire safety systems and waterproofing.”
A further change, meanwhile, requires builders to provide a schedule of progress payments for all contracts over $20,000, and for those payments to be either specifically linked to completion of specific stages of work or for costs already incurred. Whilst this does not impact architects directly, it will bring the Act into line with the practice of most building contracts which are administered by an architect, and provide the owner with the comfort of knowing that the payment is has been linked to tangible aspects of the project.
Meanwhile, another interesting aspect of the changes extends the defence of builders and tradespeople from breach of statutory warranty claims where the builder/tradesperson is able to prove that the defect resulted from specific instructions from the consumer which were contrary to the builder’s advice and allows builders to claim a defence in circumstances where the defective work in question resulted from reasonable reliance on the written instructions of architects, engineers or others with specialist building knowledge who had been engaged by the consumer prior to the commencement of building work.
In short, the Board says the changes underscore the importance of agreeing how defects are dealt with upfront at the start of the contract.
“Buildings are complex, and it’s a rare thing for a new building to be defect free,” the Board said. “Amendments coming in to effect today (January 15) make it even more important to be clear upfront on how defects are identified, rectified and paid for.”
“Because the best defect is one you never have to live with.”