There is a litany of ways by which a property owner or building practitioner can run afoul of the penalty provisions of the Building Act 1993.
In recent times the legislature has ratcheted up the magnitude of the fines which reflects the severity of a failure to have regard to the probity pillars of the Building Act 1993.
Some of the pillars are:
- The legislative imperative to carry out building work with a building permit and to ensure that any changes to building work in progress that is at odds with the permission afforded by the building permit likewise culminates in an amendment to the building permit
- The legislative imperative to comply with building orders and emergency orders (note that both private building surveyors and municipal building surveyors can issue building orders but only municipal building surveyors can issue emergency orders)
- The ratcheting fine severity also evinces disillusionment on the part of the legislature with respect to its confidence in the market being able to self-regulate in terms of showing a sufficient level of dexterity with regards to the discharge of statutory obligations.
Invariably, when a market is not able to exercise a sufficient level of discipline and probity, the heavy hand of the regulator becomes more pronounced and the penalty arsenal that the Bench has at its disposal becomes far more robust.
The penalties that can be deployed can be very high and, for the person on the wrong end of the stick, they will in all likelihood be game changing.
Section 16 of the Victorian Building Act 1993
Section 16 of the Victorian Building Act 1993 provides that it is illegal for an owner to carry out building work without a building permit unless a building practitioner or an architect has been engaged to carry out building work relating to the building work that comes within the scope of the building permit.
Section 16 provides that:
- A person must not carry out building work unless a building permit in relation to the work has been issued and is in force under this Act. The penalty for carrying out building work without a building permit is up to $77 730 in the case of a natural person, or $388 650 in the case of a corporate sole.
- A person must not carry out building work unless the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work. The penalty for carrying out building work that is not in accordance with this Act, the building regulations and the relevant permit is up to $77 730, in the case of a natural person, or $388 650, in the case of a corporate sole.
- An owner of land must not permit building work to be carried out on that land unless a) a building permit in relation to the work has been issued and is in force under this Act; and b) the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work. The penalty for an owner of land is up to $77 730, in the case of a natural person, or $388 650, in the case of a corporate sole.
- A building practitioner or an architect who is engaged to carry out building work must ensure that a) a building permit in relation to the work has been issued and is in force under this Act; and b) the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work. The relevant penalty for building practitioners or architects that breach subsection (4) is up to $77 730 in the case of a natural person, or $388 650 in the case of a corporate sole.
- Subsection (3) does not apply to an owner if the owner has engaged a building practitioner or architect to carry out the building work on that land.
- Subsections (1), (2), (3) and (4) do not apply if the building work is exempted by or under this Act or the regulations.
Prior to the 2016 amendments, the onus of obtaining the building permit lay fairly and squarely with the building owner. The September 2016 amendments, however, migrate that onus to the building practitioners and the architect, and this is a game changer. Building practitioners and architects engaged to attend to matters pertaining to the building work will need to satisfy themselves that there is indeed a building permit in place before they venture into any domain associated with carrying out of building work.
What is building work?
As so much revolves around the issue of the legal imperative of obtaining a building permit for building work, it is very important that owners and building practitioners alike are familiar with the legislative definition of building work which is enunciated in section 3. “Building work” means work for or in connection with the construction, demolition or removal of a building;
“Construction” is also a defined term as section 3 provides that construct includes:
- Build, rebuild, erect or re-erect
- Repair or alterations
- Enlarge or extend
- Place or relocate
Some key exemptions from being required to have a building permit
The Building Act 1993 outlines some key exemptions to “building work.”
Schedule 8 of the building regulations 2006 traverses the exemptions. These exemptions are extensive and require very, very careful scrutiny, cross referencing and professional advice, as there is a plethora of considerations that are factored into the question of whether building work is exempt from the requirement to obtain a building permit. Some of these considerations are as follows:
- whether there will be an adverse impact upon the public
- whether there are Heritage Act restrictions imposed upon the site
- whether there will be any adverse impacts upon the structural integrity and soundness of the building or an increase to the size of the floor area
- whether there will be any adverse impacts upon the essential safety measures of the works
- whether the work will impact upon the underpinning or replacement of the footings or any element that provides support to the building
- whether the work projects beyond the street alignment
There are also provisions that traverse temporary structures, fencing, relocatable swimming pools, wire fences, pergolas and the like.
The above list is far from exhaustive and this caveat cannot be stressed enough: before determining whether the building work exemptions apply, one would be well-advised to seek the counsel of a reputable construction lawyer.
Building Order offences – failure to comply with a building order or an emergency order
Section 118(1) of the Building Act provides that it is an offence to fail to comply with an emergency order or a building order. Private building surveyors can issue building orders but cannot issue emergency orders. Regardless, failure to comply with the issue of either type of order is a serious offence under the legislation. In the case of a natural person, the maximum penalty is $77,730. In the case of a corporate entity, the maximum fine is $388,650.
Carrying out building work without the required in insurance
It is very serious offence for a person purporting to be a building practitioner to carry out building work in their chosen profession be it an engineer, building surveyor, builder as the case may be unless the practitioner has the required insurance cover.
Section 136 is the offence provision on point and it states that provides that:
- A building practitioner (other than a builder carrying out or managing or arranging the carrying out of domestic building work) must not carry out work as a building practitioner unless the building practitioner is covered by the required insurance. The penalty is up to $77,730 for a natural person, or $388 650 in the case of a corporate sole.
- A builder must not carry out or manage or arrange the carrying out of domestic building work under a major domestic building contract unless the builder is covered by the required insurance.
The relevant penalty is up to $77,730, in the case of a natural person, or $388,650 in the case of a corporate sole.
Section 176 of the Building Act: Holding out offences
Closely allied to the mandatory legislative requirement with respect to the mandatory insurance imperative is the legal requirement for all building practitioners, or those whom purport or hold out as being building practitioners, either generically or in respect to the particular vocational discipline, to be registered in the appropriate category.
Pursuant to section 176 of the Building Act it is an offence for a person who is not registered or to use one of the following titles unless he or she is registered in the below categories:
- Building practitioner or registered building practitioner
- Building surveyor
- Building inspector
- Engineer, if the title relates to the building industry
- Draftsperson if the title relates to the building industry
- Quantity surveyor
The penalty for holding out is $186,552.
Further, if a person holds to as being registered or being qualified to practice as a building practitioner in a specific category or use the title “building practitioner” in a generic sense, then the penalty is $77,730.
One cannot carry out work either as an inspector or a building surveyor unless one is registered in those prescribed categories; the penalty is $77,730.
A builder is not allowed to carry out domestic building work unless the builder is registered in that category. The penalty is $77,730.
In circumstances where either a director (in the case of a company) or a partner (in the case of a partnership) and one of same is either a director or a partner who is a registered building practitioner in the prescribed category of work that comes within the gamut of that which is carried out by the company or the partnership, then the company or the partnership can use the title that is afforded to the prescribed category of practitioner.
Holding out is not a defined term under the Building Act, and an extensive search has not revealed any useful legal definition of holding out that sits neatly within the context of practitioner holding out. A working definition for this purpose seems to be as follows:
To hold out is to represent or purport to be that which one is not.
Holding out is very much in the nature of misrepresentation. It invariably involves conduct that induces others to deal or engage ones services for reward. It is not considered to be a benevolent way of dealing with another and some would contend that it involves a large measure of deceit.
One could hold out in a number of ways. One could verbally state or verbally misrepresent that one is a building practitioner when one is not. One could in writing state or misrepresent that one is a building practitioner, such a builder or an architect when one is not. This misrepresentation could be done by:
- Making such statement on a business card
- By way of letter or email
- An application
- A banner on a building site
- An advertisement
Holding out by one’s conduct is more opaque and would very much depend on the evidence, the factual matrix and that which a reasonable person would construe as being conduct that evinces holding out behaviour.
This may be conduct such as the carrying out of work that can only be done by a building practitioner. For instance, if someone contracts to build a home for another without disclosing that he, she or it is not a builder, and instead uses some more generalist title like contractor or consultant, that would in all likelihood be considered to be holding out by way of conduct as being something that one is not.
Regardless of whether one holds out as being a licenced lawyer, registered architect or domestic builder, the institutions that regulate these professions are very much guardians of the legal gravitas that attaches to the disciplines and the titles that adorn such fraternities.
It thus should come as little surprise that those whom are intent upon using prescribed and regulated titles to carry out work that is the exclusive domain of those whom are suitably registered will attract the ire of the disciplinary tribunals.
Misconduct proceedings are an entirely different proposition and are governed by legislation that is purpose built for the misconduct jurisdiction. Furthermore, the cases likewise deal with discrete judicial nuances that resonate with the practitioner misconduct environment.
As this particular jurisdiction has its only judicial “pathology” for want of a better word, it requires an advocacy approach that is sensitive to that pathology.
Such is the seriousness attached to consequences of committing breaches under the Building Act, a respondent, regardless of whether it is the owner or a building practitioner, would be foolhardy not to engage a lawyer well versed in the handling of Building Act offences.
There is a further caveat: as the area is quasi-criminal, the lawyer needs to be across both construction law and criminal law as the advocacy skill sets traverse both disciplines to some degree.