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Building Amendment (Registration of Building Trades and Other Matters) Bill 2018

  Building Amendment (Registration of
  Building Trades and Other Matters)
               Bill 2018
    Note: replacement Explanatory Memorandum lodged with a correction to remove the
                 reference to Part 2 in subclause (3) of clause 2 on page 2.


                           Introduction Print


               EXPLANATORY MEMORANDUM


                                  Clause Notes

                             Part 1--Preliminary
Clause 1    sets out the purposes of the Bill.
            In summary, the purposes of the Bill are--
                      to amend the Building Act 1993 (the Principal Act)--
                              to make it an offence for person to carry out
                               certain types of building work without being
                               registered or licensed; and
                              to provide for the provisional registration of
                               certain builders who carry out certain building
                               work and to introduce related offences; and
                              to provide a licensing scheme for building
                               employees who carry out certain building
                               work and to introduce related offences; and
                              to make provision in relation to certain wall
                               cladding products; and
                              to clarify the grounds for discipline of registered
                               building practitioners in relation to breaches of
                               dispute resolution orders; and




581475                                    1       BILL LA INTRODUCTION 30/8/2018

 


 

 to provide further for the regulation of swimming pools and spas; and  to make consequential and other miscellaneous amendments; and  to make related, minor and consequential amendments to certain other Acts; and  to amend the Local Government Act 1989 to provide for Councils to enter into agreements to rectify cladding on buildings, and to provide for Councils to declare and levy charges to fund such rectification. Clause 2 provides for the commencement arrangements of the Bill. Specifically, subclause (1) provides that Part 1 and sections 30, 38-41, 45-56, 58, 64-72, 73, 75 and Part 5 come into operation on the day after Royal Assent. These provisions include the new disciplinary ground for a breach of dispute resolution order notice and how provisions are intended to apply if a disciplinary body finds that a registered building practitioner is no longer a "fit and proper person". These amendments come into operation on the day after Royal Assent as they reflect the original intent of the scheme. Subclause (2) provides for Part 6 to come into operation on 30 October 2018. Subclause (3) provides that the remaining provisions of Part 4 come into operation on a day or days to be proclaimed. Subclause (4) provides that if those provisions don't come into operation before 1 July 2019 they come into operation on that day. Subclause (5) provides that Part 3 comes into operation on a day or days to be proclaimed and subclause (6) provides that if a provision in Part 3 does not come into operation before 1 December 2019, it comes into operation on that day. Subclause (7) provides that Part 2 comes into operation on a day or days to be proclaimed and subclause (8) provides that if a provision in Part 2 does not come into operation before 1 September 2020, it comes into operation on that day. The forced commencement date in subclause (8), which is more than 12 months from the date of the Bill's introduction, is to allow for the subordinate framework to be developed and 2

 


 

to allow adequate time for industry to transition to the new scheme. Clause 3 provides that in this Act the Building Act 1993 is called the Principal Act. Part 2--Amendment of the Building Act 1993-- Registration of building trades Division 1--Definitions Clause 4 amends section 3(1) of the Principal Act to insert new definitions or amend existing definitions. Subclause (1) inserts a definition of subcontractor into the Principal Act to support new provisions relating to registration of building trades. The new definition defines a subcontractor as a person who enters into a contract with a builder to carry out all or part of the building work that is to be carried out by the builder under another contract. Subclause (3) amends the definition of registered building practitioner in the Principal Act to include a building practitioner that is provisionally registered. This will support new provisions relating to registration of subcontractors. Subclause (4) inserts new definitions of licensed building employee, provisional licence, provisional registration, training contract and Victorian Registration and Qualifications Authority into the Principal Act to support new provisions relating to registration of subcontractors and employee licensing. Division 2--Amendments relating to registration of builders Clause 5 amends sections 24B(3)(a) and (4)(b) of the Principal Act, which deal with the naming of certain persons as the builder on the building permit, to clarify that a registered building practitioner under these subsections does not include a building practitioner that is provisionally registered. Subclause (2) inserts new section 24(3)(ab), which provides a provisionally registered building practitioner may be named as builder for the purposes of subsection (3) only if the builder's registration authorises the carrying out of all the building work under the proposed permit. 3

 


 

Clause 6 amends sections 25B(1)(b) and 25B(1A) of the Principal Act, which deal with restrictions on an owner-builder, to clarify that these provisions do not apply to a builder who holds a provisional registration. Clause 7 amends section 57(1)(b) of the Principal Act, which are special provisions to deal with prescribed temporary structures, to clarify that a registered building practitioner under this subsection does not include a building practitioner that is provisionally registered. The effect of the amendment is to clarify that a full registration is required for erection of a temporary structure. Clause 8 amends section 137B(1)(a)(i) of the Principal Act to clarify that a registered building practitioner under this sub-subparagraph does not include a building practitioner that is provisionally registered. The effect of the amendment is to clarify that in order for an owner-builder selling a building without a report or insurance to avail themselves of the disapplication of the offence, the registered building practitioner must be fully registered. Clause 9 inserts new section 169(2) into the Principal Act, which makes it an offence for a person who is provisionally registered to represent or imply they are a person registered as a class of builder under section 171(1)(a) of the Principal Act. Clause 10 inserts new section 169EA into the Principal Act to provide an offence for certain persons undertaking certain prescribed types of building works unless registered or licensed. Specifically, new subsection (1)(a) provides a person must not carry out a prescribed type of building work unless their registration authorises the carrying out of that type of building work. Under new subsection (1)(b), a person must not carry out a prescribed type of building work unless their licence authorises the carrying out of that building work, and the person is carrying out that work in the course of their current employment. The offence is an important part of the registration and licensing scheme, which is designed to ensure that people who carry out or perform prescribed work have adequate qualifications, skills and experience to do so. New subsection (2) provides that the offence under new subsection (1)(b) does not apply to a person who is employed under a specified training contract to carry out the type of building work referred to under new subsection (1). 4

 


 

Clause 11 amends section 169F of the Principal Act to clarify that it applies to domestic building work. It also inserts a note at the foot of section 169F(2). Clause 12 inserts a new sections 169FA and 169FB into the Principal Act. New section 169FA makes it an offence for a person to engage another person as a subcontractor (the proposed subcontractor) to carry out building work prescribed under new section 169EA (the relevant building work) unless the proposed subcontractor is registered and the registration authorises the carrying out of the relevant building work. Subsection (2) provides an exception to the offence if the person took reasonable steps to ensure the proposed subcontractor was registered to carry out the relevant building work. A non-exhaustive list of reasonable steps is outlined in new subsection (2)(a)-(d). New section 169FB makes it an offence for a person to direct or require another person (the directed person) to carry out prescribed building work unless the person has the required registration or licence and in the case of the licensed person the work is carried out in the course of employment. Subsection (2) provides a person does not commit an offence under subsection (1) if the directed person is employed under a training contract to carry out the relevant building work and the employer has been approved under the Education and Training Reform Act 2006 and the person directing the directed person is the employer or a person acting on behalf of the employer. Subsection (3) provides an exception to the offence under subsection (1) if the person took reasonable steps to ensure the directed person was registered under Part 11 or licensed under new Part 11A to carry out the relevant building work. A non-exhaustive list of reasonable steps is outlined in new subsection (2)(a)-(c). Clause 13 amends section 170 of the Principal Act, which deals with who may apply for registration, to clarify the section applies to provisional registration. 5

 


 

Subclause (2) inserts new subsection 170(2), which clarifies that an application for a provisional registration may only be made in respect of a class of builder that authorises the carrying out of a type of building work prescribed for the purposes of new section 169EA. Clause 14 amends section 171(1)(a) of the Principal Act, which deals with the registration of a building practitioner, to clarify that the section does not apply in the case of provisional registration. Subclause (2) inserts new subsection 171(1)(ab), which provides the criteria for the Victorian Building Authority (the Authority) to consider in respect of registering an applicant as a building practitioner in the case of a provisional registration. The applicant must have the prescribed knowledge or experience to carry out that type of building work. Subclause (3) inserts new section 171(1A) which provides that if a nominee director of a body corporate is provisionally registered in a particular class, the body corporate can only be granted provisional registration in that class. It would be anomalous to grant full registration to a body corporate if its nominee director was only provisionally registered. Clause 15 inserts new section 171G(2)(ba) into the Principal Act to provide that a certificate of registration which relates to a provisional registration must have the word "Provisional" displayed prominently on the certificate. Clause 16 substitutes section 171I(1) of the Principal Act to provide for a period of registration for both provisional registrations and registrations in any other case. A provisional registration lasts for 5 years; while a registration, in any other case, lasts up to a period of 5 years, as determined by the Authority. Clause 17 amends section 173 of the Principal Act, which deals with renewal of registration, to remove the reference to "surrender" in the heading, as the section deals solely with renewals. Subclause (2) clarifies that this section does not apply to renewals of provisional registrations. This is because there is no ability to renew a provisional registration. 6

 


 

Clause 18 amends section 183C(2) of the Principal Act, which deals with the consequences of suspension of registration, to clarify that for the purposes of this section, a registered building practitioner does not include a provisionally registered building practitioner. This is because there is no ability to renew a provisional registration. Clause 19 amends section 205LH(2)(a) of the Principal Act, which deals with the assessment of a levy, to clarify that for the purposes of this section, a registered building practitioner does not include a provisionally registered building practitioner. The effect of the amendment is to clarify that a full registration is required to investigate and report on building levy issues. Clause 20 amends section 238(2) of the Principal Act to clarify, for the purposes of this section, that a registered building practitioner does not include a provisionally registered building practitioner. The effect of the amendment is to clarify that a full registration is required for a building surveyor to rely upon a certificate issued by that building practitioner. Division 3--Amendments relating to the licensing of building employees Clause 21 inserts a new Part 11A--Licensing of building employees into the Principal Act. The new Part will provide for a building employee licensing scheme. This will mean that a licence will be required for a building employee to perform prescribed building work, and there will be greater accountability for that work. Division 1--Building employee licence Subdivision 1--Application to be licensed New section 187A provides that a natural person may apply to the Authority to be licensed as a building employee to carry out building work prescribed for the purposes of section 169EA. New section 187B sets out the requirements of an application to be licensed. New section 187C allows the Authority to conduct inquiries and require further information. Subsection (1) provides that, in considering an application for a licence, the Authority may conduct inquiries or require an applicant to provide further information. New subsection (2) provides that the Authority 7

 


 

may specify how information is to be verified, which can include by statutory declaration. New subsection (3) provides the Authority may refuse an application if requirements under subsection (1) are not met within a reasonable time or information is not verified as required. New section 187D(1) provides that the Authority may ask an applicant to consent to disclosure of information as specified by the subsection. New subsection (2) provides the Authority may refuse to consider an application if an applicant fails to comply with a request under subsection (1). New section 187E(1) provides an applicant for a licence must give notice to the Authority of any material change during the relevant period to the information provided in support of the application within 14 days after becoming aware of the change and provides for penalties. New subsection (2) defines material change and relevant period. Subdivision 2--Licensing New section 189F(1) provides that the Authority must grant an employee licence if satisfied the applicant holds the prescribed qualification or a qualification which either alone or together with other qualifications as specified in the section, is equivalent to a prescribed qualification. The section also requires the applicant to pay appropriate application fee and to meet any other prescribed requirements. New subsection (2) provides that the Authority must refuse the application if not satisfied of the matters specified in subsection (1). New subsection (3) provides that the Authority is not required to conduct a hearing to determine whether to grant or refuse to grant a licence. New section 187G provides that if the Authority refuses to grant a licence under section 187F it may provisionally license the employee if satisfied the applicant has the prescribed knowledge or experience to carry out the type of building work authorised by the licence. New section 187H(1) provides that the Authority must impose prescribed conditions on a licence and may impose any other conditions the Authority considers appropriate. New subsection (2) provides it is an offence for a person to not comply with conditions on the person's licence, with a penalty of 50 penalty units. 8

 


 

New section 187I(1) provides that a licence under section 187F lasts until cancelled. New subsection (2) provides that a provisional licence lasts for 5 years. New subsection (3) provides that subsections (1) and (2) do not take away from any provision about the suspension or cancellation of a licence. New section 187J(1) provides that if the Authority licences a person as a building employee it must issue a licence certificate to that person. New subsection (2) provides for certain specified matters to be included in the licence certificate. New subsection (3) provides the Authority can ask a person to return a licence under certain circumstances as specified. New subsection (4) provides it is an offence for a person to fail to return the licence to the Authority as soon as practicable after being asked to do so. The offence carries a penalty of 10 penalty units. New section 187K provides the Authority may issue a replacement licence certificate at the request of the employee if the fee (if any) is paid, and the employee satisfies the Authority the licence was lost, damaged or destroyed. Subdivision 3--Periodic licence fee and statement New section 187L(a) provides that a licensed building employee must pay licence fees as specified in the subsection to the Victorian Building Authority Fund at the end of each prescribed period. New subsection (1)(b) requires the employee to provide a statement to the Authority in respect of the period and specifies requirements for the statement. New section 187M provides a licensed employee may surrender the licence with the consent of the Authority. New section 187N(1) provides that the Authority must keep a Register of Building Employees, being those building employees licensed under Part 11A. This is consistent with the requirement for the Authority to keep a Register of Building Practitioners. New subsection (2) provides the register must be in the form (if any) and contain the information (if any) as required by the regulations and must include the names and classes of licence of the persons licensed. New section 187O provides a licensed employee must produce their licence for inspection if asked to do so by certain persons as specified in the section. It is an offence to fail to comply with the request, carrying a penalty of 10 penalty units. 9

 


 

Division 2--Disciplinary proceedings and actions Subdivision 1--Preliminary New section 187P sets out the meaning of disciplinary action in relation to a licensed building employee. This ensures appropriate accountability by licensed building employees for their work. New section 187Q provides for circumstances in which this Division (disciplinary proceedings and actions) applies to an employee whose licence is suspended. Subdivision 2--Grounds for disciplinary action New section 187R(1) provides the grounds for disciplinary action. New subsection (2) provides that the Authority may make inquiries to determine if a ground for taking disciplinary action exists. Subdivision 3--Show cause process New section 187S(1) provides that the Authority must give a licensed building employee a show cause notice if it reasonably believes a ground for taking disciplinary action against the employee exists. New subsection (2) sets out what the show cause notice must state. New subsection (3) provides that the show cause period must be a period of at least 14 days after the notice is given to the employee. New subsection (4) provides the Authority may extend the show cause period at the request of the employee. New section 187T provides for representations that may be made in relation to the show cause notice. New subsection (1) provides that the employee may make written or oral submissions about the show cause notice to the Authority and if oral at a time and place agreed between the Authority and the employee. New subsection (2) requires the Authority to keep a record of oral submissions. New section 187U provides that within 28 days after the show cause period ends the Authority must decide whether a ground exists to take disciplinary action against the employee. 10

 


 

New section 187V provides that if the Authority no longer believes a ground for disciplinary action against the employee exists it must take no further action and must, as soon as practicable, give notice to the employee that no further action will be taken. New section 187W provides that if the Authority believes a ground exists to take disciplinary action against the employee, the Authority may accept an undertaking from the employee under section 234B and do the things set out in this section. New section 187X sets out the process for taking disciplinary action after a show cause notice. New subsection (1) provides that if the Authority believes a ground exists to take disciplinary action against the employee the Authority may take the disciplinary action proposed in the show cause notice or on the basis of the representations or new evidence received take disciplinary action the Authority considers to be less serious than that which was proposed in the show cause notice. New subsection (2) requires the Authority to give a written notice of its decision to the employee as soon as practicable. New subsection (3) sets out what the notice (of the decision) must state. New subsection (4) provides for when the decision takes effect. Subdivision 4--General provisions relating to disciplinary action New section 187Y deals with notice of decisions. New subsection (1) provides that notice of a decision in relation to an employee must be given to any person who made a complaint about the matter to which the decision relates. New subsection (2) provides that of the Authority is aware the employee is employed by a particular person, the authority must cause notice of decision to be given to that employer without delay after the decision takes effect. New section 187Z provides that a complaint is privileged. This means that a person is not liable for loss, damage or injury to another if the person, in good faith, lodged a complaint about an employee with the Authority or produced information or evidence in relation to certain matters as specified in the section. New section 187ZA provides for the consequences of suspension of a licence, being that while an employee is suspended the person is taken not to be licensed. 11

 


 

New section 187ZB provides that the Authority may revoke a suspension at any time if satisfied it is appropriate to do so and must give written notice of the revocation to the employee without delay. Division 3--Review of decisions relating to building practitioners Subdivision 1--Preliminary New section 187ZC provides definitions of affected person, review decision, reviewable decision, and reviewer for the purposes of review of decisions concerning licensed building employees (internal review). Subdivision 2--Internal review New section 187ZD sets out the process of applying for internal review. New subsection (1) provides that the section applies if a reviewable decision is made by a delegate of the Authority other than a Commissioner or the Chief Executive Officer of the Authority. New subsection (2) provides a person who is directly affected by a reviewable decision may apply to the Authority for internal review of the decision. New subsection (3) provides the application must be made within 28 days after the day the affected person is given notice of the decision. New subsection (4) allows the Authority to, at any time, extend the time for applying for an internal review. New subsection (5) provides that an application for an internal review must be in writing and state fully the grounds of the application. New subsection (6) provides that an application for an internal review stays the operation of the decision. New section 187ZE sets out who may conduct an internal review. New subsection (1) provides that the Authority must appoint an employee of the Authority to conduct an internal review. New subsection (2) provides that an internal review must not be conducted by certain persons as specified by the subsection. New section 187ZF sets out how a reviewer must conduct an internal review. New subsection (1) provides that the reviewer must base the internal review on certain things as specified by the subsection. New subsection (2) provides that, for the review, the reviewer must give the affected person a reasonable opportunity to make written or oral representations to the reviewer. 12

 


 

New section 187ZG sets out requirements in relation to a review decision. New subsection (1) provides that the reviewer must make a decision to affirm the reviewable decision, amend the reviewable decision or substitute another decision for the decision. New subsection (2) provides that if the review decision affirms the reviewable decision, for the purpose of an application for review by VCAT, the reviewable decision is taken to be the review decision. New subsection (3) provides that if the review decision amends the reviewable decision, the reviewable decision as amended is taken to be the review decision. New subsection (4) provides that if the review decision substitutes another decision for the reviewable decision, the substituted decision is taken to be the review decision. New section 187ZH sets out requirements in relation to notice of a review decision. New subsection (1) provides that the Authority must, as soon as practicable after the review decision is made, give the affected person notice of the review decision. New subsection (2) provides the things the review notice must state. New subsection (3) provides that if the Authority does not give the review notice within the review period the reviewer is taken to have made a review decision affirming the reviewable decision. New subsection (4) provides that in this section the review period is the longer of the period prescribed by the regulations or the period ending 28 days after the application is made. Subdivision 3--Review by VCAT New section 187ZI allows for application for review by VCAT of a reviewable decision. New subsection (1) provides that an affected person who has applied for an internal review of a reviewable decision and is dissatisfied with the review decision may apply to VCAT for review of the review decision. New subsection (2) provides that an affected person who was not eligible to apply for an internal review of a reviewable decision may apply to VCAT for review of the reviewable decision. New subsection (3) provides an affected person may apply to VCAT (without applying for internal review) for review of a reviewable decision to suspend or cancel a licence. New subsection (4) provides an application for review of a reviewable decision or review decision must be made within the time periods specified in the section. 13

 


 

New section 187ZJ sets out how VCAT may decide a matter, and the effect of proceedings on an application for review. It provides that after hearing the matter, VCAT may affirm the review decision or reviewable decision; or amend the review decision or reviewable decision; or substitute another decision for the review decision or reviewable decision. An application for review stays the operation of the decision. Clause 22 amends the functions of the Authority contained in section 197 of the Principal Act to reflect the new scheme under Part 11A for the licensing of building employees. Clause 23 inserts a new subsection 239(2) into the Principal Act to allow a certificate of the Registrar of the Victorian Building Authority to be used as evidence of the matters stated in it, in the absence of evidence to the contrary in relation to licensed building employees. Division 4--General amendments relating to the registration of building trades Clause 24 makes various amendments to the general regulation-making powers in section 261 of the Principal Act, to allow regulations to be made which give full effect to the new provisions of this Bill. Subclause (1) inserts new section 261(1)(ec) to allow for regulations to be made in relation to prescribing a class of building employee. Subclause (2) substitutes subsection 261(1)(f) of the Principal Act to reframe the scope of the regulation making power, to allow regulations relating to the qualifications for registration in a category or class of the Register of Building Practitioners or the Register of Building Employees. Subclause (3) amends section 261(1)(g) to provide that this regulation making power in respect of categories or classes of the Register of Building Practitioners, also extends to the classes of building employees in the Register of Building Employees. Subclause (4) amends section 261(1)(hb) by substituting the reference to "domestic building work" with "building work" to ensure that non-domestic building work can be specified. 14

 


 

Subclause (5) inserts a new section 261(1)(hc) to provide a regulation-making power to specify the building work that a class of licence as a builder employee authorises a person to carry out. Subclause (6) substitutes section 261(1)(i) of the Principal Act to provide a regulation-making power in respect of the form and divisions of the Register of Building Practitioners and Register of Building Employees and the information to be included within. Part 3--Amendment of the Building Act 1993-- Swimming pools and spas Clause 25 amends section 3(1) of the Principal Act to insert a definition of certificate of pool and spa barrier compliance and certificate of pool and spa barrier non-compliance and swimming pool and spa inspector and swimming pool and spa register. Clause 26 amends section 15A of the Principal Act to provide further regulation making powers with respect to swimming pools and spas. New section 15A(1)(c) is inserted in the Principal Act providing for regulations to be made in relation to safety of swimming pools and spas including signage. A new subsection (3) is inserted to provide that the Governor in Council may make regulations for and with respect to--  the registration of swimming pools and spas to enable the creation of a register; and  require owners of land to arrange for mandatory inspections of swimming pool and spa barriers; and  the issuing of swimming pool and spa compliance certificates and non-compliance certificates; and  the requirements of owners of land to asses and report to council on the compliance with swimming pool or spa barriers; and  prescribing fees for registration, inspection of swimming pools and spas and the lodgement of certificates and reports with council. 15

 


 

A new subsection (4) is inserted to provide that the regulations with for or with respect to fees may provide for maximum fees, differential fees, as well as reduction, waiver or refund of fees in whole or in port, and in specified circumstances. New subsection (5) provides that any regulations made under the subsection (3) may impose penalties not exceeding 20 penalty units for a contravention of the regulations. New subsection (6) provides that nothing in section 15A affects the operation of the regulation making powers of the Principal Act. Clause 27 inserts new subsection 144(2) into the Principal Act, which allows the owner of land on which a swimming pool or spa is located to appeal a council determination about the date of construction of the swimming pool or spa. Clause 28 inserts a new section 216D in the Principal Act to provide for a register of swimming pools and spas. New subsection (1) sets out the swimming pools and spas to which this obligation applies. Each council is required to establish and keep a register of swimming pools and spas within the municipal district of the council which includes any swimming pool or spa which is appurtenant to a Class 1, 2, 3 or 10 building or a Class 4 part of a building that is either registered with the council, or of which the council is aware. New subsection (2) makes it a requirement that the council must keep a register of swimming pools and spas located within the municipal district of the council. New subsection (3) specifies the swimming pools and spas which must be included on the register. New subsection (4) imposes a requirement that the register must be kept in accordance with the regulations. New subsection (5) provides that a local council must submit the information in the register to the Authority or a prescribed person, agency or body. New subsection (6) provides for the Authority to publish information regarding the number and types of swimming pools and spas within a municipal district, but not details of any owners of specific locations. 16

 


 

New subsection (7) specifies the categories of persons who may inspect a pool register. A person may only inspect the register insofar as it relates to them. New subsection (8) requires that, subject to this section, a council must ensure that no information in the register is published or made available to any other person, agency or body. Clause 29 amends section 262(e) of the Principal Act to allow exemption of "any persons or classes or person" from all or any of the requirements of the building regulations in relation to building work. This is so that building work that would normally be prescribed work requiring registration or a licence to perform it can be exempted if, for example, the work was going to be performed by the owner of a non-habitable building. Part 4--Other amendments to the Building Act 1993 Clause 30 amends section 3(1) of the Principal Act to insert new definitions of certificate of registration, destructive testing, external wall cladding product, high risk external wall cladding product, prescribed testing authority and registration card to support the operation of amendments to prohibit the use of certain wall cladding products. Clause 31 amends section 24B(3)(c) of the Principal Act to substitute an "insured architect" with an "architect registered under the Architects Act 1991" to clarify the intent and ensure legislative consistency. Clause 32 inserts new section 25AA into the Principal Act which permits a person who acquires land that is subject to a building permit that has been suspended under section 25AE(1)(d) to give a notice to the relevant building surveyor requesting that the builder named on the building permit be changed. This relates to a building permit that has been suspended because an owner-builder named as the builder in the building permit has transferred the land. The notice must include a request that the new owner be named as the builder on the building permit, any certificate of consent issued to a person to carry out the remaining building work under the building permit, the name and address of the new owner and any person issued with a certificate of consent to carry out the remaining building work under the permit if the person is not the new owner, any information or documents requested to be 17

 


 

provided by the relevant building surveyor in order for the relevant building surveyor to decide whether the new owner may be named as the builder on the building permit, and any other prescribed information. Clause 32 relies on the amendments made by clause 35 to provide for the relevant building surveyor to change the name of the builder in the building permit after receiving the notice. Clause 33 amends section 25A(1)(a) of the Principal Act to provide for notice to be provided to the relevant building surveyor of the ending of the engagement of an "architect registered under the Architects Act 1991" rather than an "insured architect" to ensure legislative consistency. Clause 34 amends section 25AB(1)(a) of the Principal Act, which currently provides for the owner of the building or land in or on which the building work is to be carried out to give a notice to the relevant building surveyor of the subsequent engagement of a builder or architect. This notice is used as a basis upon which the relevant building surveyor may change the name of a builder named in the building permit under section 25AC of the Act. The purpose of the amendment is to allow the notice to be served on the relevant building surveyor whether or not the building permit is suspended. Clause 34 also amends section 25AB(1)(b) to provide that the notice may be given in relation to an "architect registered under the Architects Act 1991", rather than an "insured architect" to ensure legislative consistency. Clause 35 amends section 25AC of the Principal Act to include reference to new section 25AA(2), which provides for the relevant building surveyor to change the name of the builder in the building permit after receiving a notice given under new section 25AA. Clause 36 substitutes section 25AE(1)(d) of the Principal Act to provide that if the builder named in the building permit is the owner of the land to which the building permit relates, and the builder ceases to own the land, the building permit is suspended on and from the day the builder ceases to own the land. Clause 37 amends section 25G of the Principal Act in relation to certificates of consent to insert new section 25G(1)(b)(iii) as a further ground for expiration of a certificate of consent. The effect of this clause is a certificate of consent will expire if the owner of the land to 18

 


 

which the certificate relates ceases to own the land. This is because the land to which a certificate of consent relates must be owned by the person who is issued with a certificate of consent, or owned by a related body authorised by section 25F of the Principal Act. Clause 38 repeals section 36 of the Principal Act as it is no longer required as it is now reflected in the amendments to section 228D of the Principal Act made under clause 64. Clause 39 amends section 104 of the Principal Act by inserting new section 104(4) and (5) with respect to emergency orders made to owners, occupiers or builders. New subsection 104(4) provides that an emergency order may require an owner of a building or a place of public entertainment that is a building, or a builder to arrange for destructive testing of a specified building product or material used in the building if the municipal building surveyor reasonably believes that the use of the building product or material is connected with a contravention of the Principal Act or regulations. New subsection 104(5) requires an owner or builder to provide the results of the destructive testing to the municipal building surveyor or another person authorised by the municipal building surveyor. Clause 40 amends section 107 of the Principal Act, which deals with actions by private building surveyors, to clarify that the power of a private building surveyor to provide a building notice or make a building order continues beyond the issue of a certificate of final inspection, occupancy permit or temporary approval in relation to a building, land or place. Clause 41 amends section 111 of the Principal Act, which deals with building orders, to provide a separate power for destructive testing. New subsection (8) provides a building order may require an owner of a building or a place of public entertainment that is a building, or a builder to arrange for destructive testing of a specified building product or material used in the building if the municipal building surveyor reasonably believes that the use of the building product or material is connected with a contravention of the Principal Act or regulations. 19

 


 

New subsection (9) requires an owner or builder to provide the results of the destructive testing to the municipal building surveyor or another person authorised by the relevant building surveyor. Clause 42 inserts a new subsection 170A(da) into the Principal Act to require the applicant for a registration as a building practitioner to include a recent photograph of the applicant in a size and form specified by the Authority. This will enable the Authority to issue a registration card with a photograph and supports the amendments made by clause 43. Clause 43 inserts new section 171GA into the Principal Act to require the Authority to issue a registration card to a registered building practitioner who is a natural person. The registration card must include specified matters, including the registration number of the building practitioner, a recent photograph and any other prescribed information. This supports the amendments to the identification requirements of authorised persons made under clause 62. Clause 44 amends the section 171J of the Principal Act, which currently provides for the Authority to issue a replacement certificate of registration. The amendment will provide for the Authority to issue a replacement certificate of registration or a replacement registration card. Clause 45 substitutes section 178(h) of the Principal Act to clarify that a disciplinary action in respect of disqualifying a registered building practitioner may include disqualification for a period up to 3 years from being registered in any category or class of building practitioner. Clause 46 amends section 179 of the Principal Act to create new grounds for disciplinary action against building practitioners. Subclause (1) inserts new section 179(1)(ca), which provides a ground for disciplinary action if the practitioner fails to comply with a Ministerial direction issued under new section 188AA. Subclause (2) inserts new section 179(1)(db), which provides a ground for disciplinary action if the practitioner has been issued with a breach of dispute resolution order notice under the Domestic Building Contracts Act 1995 (the DBCA) and the chief dispute resolution officer has notified the Authority 20

 


 

of the breach of order notice. The effect of this new ground allows the Authority to proceed with disciplinary action based on the receipt of a breach of dispute resolution notice without having to prove an actual breach of the dispute resolution order to establish the disciplinary ground (see section 179(1)(da) of the Principal Act). Under the DBCA, the practitioner has a right to seek review of the dispute resolution order or the breach of dispute resolution order notice in VCAT. Upon expiry of the period to seek VCAT review under that Act, the breach of dispute resolution order notice can then be provided to the Authority. Note, see clause 50(2) regarding deferment of disciplinary proceedings where an application for extension of time for review of the breach of dispute resolution order notice is to be made by the builder to VCAT). Subclause (3) amends section 179(g) to amend the trigger for the disciplinary ground, such that the Authority may take disciplinary action if the Authority believes on reasonable grounds that the practitioner is not a fit and proper person to practise as a building practitioner. The change removes the assumption that the building practitioner was at one time a fit and proper person. Subclause (4) inserts new subsections (4)-(7) to clarify how the disciplinary action ground set out in subsections (1)(da) or (db), relating to breaches of a dispute resolution order, interact with each other and other grounds in section 179(1). New section 179(4) provides that the grounds set out in subsections (1)(da) or (db) may be commenced together with or separately from other disciplinary actions. New section 179(5) provides that if the breach of dispute resolution order notice is cancelled, a disciplinary action based on that ground (new section 179(1)(db)) will be terminated and any related suspension imposed by the Authority or VCAT in relation to that ground is terminated; however, new section 179(6) provides this does not terminate or prevent any disciplinary action being undertaken in relation to the work that was the subject of the dispute resolution order. New section 179(7) provides for the definition of chief dispute resolution officer. 21

 


 

Clause 47 inserts a new section 179B into the Principal Act to provide that if the Authority or VCAT makes a finding that a registered building practitioner is not a fit and proper person the Authority or VCAT must cancel the practitioner's registration either in a specific category or class of registration or all classes or categories of registration. This amendment gives effect to the policy position that being a fit and proper person is an ongoing, not a "point in time", requirement of being a registered building practitioner. For the building practitioner to be reinstated, they would be required to submit a new application for registration in which the person must satisfy the Authority that he or she is (now) a fit and proper person. New section 179B may apply in addition to other disciplinary action. Clause 48 inserts in the Principal Act a new ground for immediate suspension of the registration of a registered building practitioner. New subsection 180A(2A) provides that the Authority must suspend the registration of a registered building practitioner if the Authority considers it in the interests of the public to do so until the show cause process is resolved. New subsection 180A(2B) provides matters that the Authority may have regard to in determining whether it is in the interests of the public to suspend the registration of a registered building practitioner. Subclause (2) amends section 180A(6) of the Principal Act to clarify that the Authority must give a show cause notice under section 182 without delay after giving notice under section 180A(1), not after giving notice after section 180A(2). Clause 49 makes various amendments to section 182 of the Principal Act to align the section with the amendments made in clause 46. Subclause (1) provides that section 182(1) operates subject to new subsection (6). Subclause (2) inserts a new subsection 182(1A) which sets a time limit on initiating the show cause process for disciplinary action taken under new section 179(1)(db). 22

 


 

Subclause (3) inserts new subsections 182(5) and (6) into the Principal Act. New subsection (5) requires that in the case of a show cause notice issued in relation to new section 179(1)(db), breach of a dispute resolution order notice, the disciplinary action must include a suspension under section 179(1)(f), which provides the practitioner engaged in conduct that is constituted by a pattern of incompetence or negligence. New subsection (6) exempts the Authority from having to give the registered building practitioner a show cause notice if a notice of immediate suspension has been issued under section 180A(2) and the Authority does not propose to take any other disciplinary actions. Clause 50 makes various amendments to section 182D of the Principal Act to align the section with the amendments made in clause 46. Subclause (1) amends section 182D of the Act to provide that section 182D does not apply to disciplinary action under section 178(1)(db). An undertaking cannot be accepted where the grounds for disciplinary action is notice of breach of a dispute resolution order. Subclause (2) inserts a new subsection 182D(2) which provides the specific circumstances in which the Authority may accept an undertaking when the ground for disciplinary action is under section 178(1)(db). Subclause (3) inserts a new subsection 182D(3) which provides that the Authority cannot accept an undertaking in relation to subsection (2) other than the undertaking specified in subsection (2)(a). Clause 51 amends section 182E of the Principal Act to align the section with the amendments made in clause 46. Subclause (1) amends section 182E(1) to provide that it operates subject to subsection (1A). Subclause (2) inserts a new subsection 182E(1A) to require that the Authority, if it believes there has been a breach of a dispute resolution order notice which meets the ground set out in section 178(1)(db), must take the disciplinary action proposed in the show cause notice. 23

 


 

Clause 52 substitutes section 185(3A) of the Principal Act to provide that an application of internal review of a reviewable decision made in relation to disciplinary action undertaken under sections 178(1)(da) or 178(1)(db) may be made at any time before any disciplinary action imposed by the reviewable decision ceases to have effect. Clause 53 inserts a new section 188AA into the Principal Act, which provides a new power of the Minister to issue directions relating to the functions of municipal building surveyors and private building surveyors. New subsection (2) provides for a direction to be published in the Government Gazette. New subsection (3) requires that a municipal building surveyor or private building surveyors must comply with any relevant directions. Clause 54 amends section 189(1) of the Principal Act to provide that the Minister may by instrument delegate to the Authority any of the Minister's functions under this Act, other than the Minister's power under section 192A(1) or new section 192B (see clause 56). Clause 55 substitutes section 190(1) of the Principal Act to provide that the Minister may declare any or of the functions of a municipal building surveyor under the Act or regulations are to the carried out by the Authority. The declaration may be made in relation to specified building work, buildings, or land situated within a municipal district. Clause 56 inserts a new section 192B into the Principal Act to provide for the Minister to make a declaration prohibiting use of high risk external wall cladding products. New subsection (1) empowers the Minister to declare that an external wall cladding product is prohibited from being used by any person in the course of carrying out any building work in connection with the construction of a building. New subsection (2) provides that declarations under subsection (1) do not apply to the use of external wall cladding products under permits if the applications for the permits were made before the declarations took effect. 24

 


 

New subsection (3) provides what the Minister must be satisfied, before making a declaration, that the external wall cladding products is causing or will likely cause risk of death or serious injury to building occupants, or members of the public or risk of severe property damage. New subsection (4) clarifies a risk referred to in subsection (3) may arise from either the use of external wall cladding products in particular circumstances or because of an event such as fire. New subsection (5) provides that a declaration may apply to a specified use, building or person, or a class of use, building or person. New subsection (6) provides that a declaration may include conditions relating to how wall cladding products affected by any declaration may be used. New subsection (7) provides that a declaration must include the Minister's reasons for making the declaration. New subsection (8) provides that, unless the Minister believes that the risk of using the external wall cladding product is so serious that in the interests of public safety a declaration must be made immediately, at least 48 hours prior to publishing the declaration, the Minister must publish on the internet a draft of the proposed declaration and a statement of intention to make the declaration. New subsection (9) specifies when a declaration under this section takes effect. New subsection (10) provides that the Minister may publish on the internet a draft of the proposed declaration, including the Minister's reasons for deciding to make the declaration and a statement inviting submissions on the proposed declaration. New subsection (11) provides that if the Minister publishes a proposed declaration under new section 192B(9), a person may make a submission within 28 days after the publication of the draft of the proposed declaration. New subsection (12) provides that if the Minister publishes a proposed declaration under new section 192B(9), the Minister must consider any submission on the proposed declaration received within the 28 days after the draft of the proposed declaration is published. 25

 


 

New subsection (13) provides that the Minister may amend a declaration in the same way as a declaration is made. New subsection (14) requires that the Minister ensure that an up to date version of any declaration is published on the internet for as long as the declaration is in force. New subsection (15) empowers the Minister to revoke a declaration by notice published in the Government Gazette. New subsection (16) provides a revocation under subsection (15) takes effect on the day it is published in the Government Gazette. Clause 57 amends section 204B(c) of the Principal Act to provide that a VBA inspector identification states that the VBA inspector is an authorised person within the meaning of section 228 of the Principal Act. Clause 58 amends section 205M of the Principal Act to reduce the period of notice which the Authority must provide to a municipal building surveyor or private building surveyor before making a direction under that section to 7 days from 14 days. It also provides that the Authority may be exempted from the notice period if the Authority believes on reasonable grounds that a high risk external wall cladding product has been used in connection with building work relating to a function of that surveyor. If high risk cladding products are suspected, then it is appropriate to have no notice period to ensure any risks are addressed immediately. Clause 59 inserts a new section 221ZD(2A) into the Principal Act to empower the Authority to refuse to renew the licence or registration of a plumbing practitioners if they have not complied with any prescribed continuing professional development requirements. Clause 60 amends sections 221ZZY(3) and (4) of the Principal Act to provide that the identification for plumbing inspectors and compliance auditors state that the person is an authorised person within the meaning of section 228 of the Principal Act. Clause 61 inserts a new section 221ZZZG(1)(da) into the Principal Act, which provides a new ground of disciplinary action that may be taken against plumbing practitioner in respect of non-compliance with continuing professional development requirements. 26

 


 

Clause 62 amends section 228B of the Principal Act to require that identification issued to an authorised person who is authorised by a municipal building surveyor or by Energy Safe Victoria or by a relevant building surveyor or the chief officer within the meaning of Country Fire Authority Act 1958 or by the chief officer within the meaning of the Metropolitan Fire Brigades Act 1958 must comply with the requirements of subsection (4). Subclause (2) amends subsection (4) to clarify that the identification is not issued under this section, but rather documentation for the purposes of subsections (1), (2), (3) and (7) must meet the specified requirements. Subclause (3) amends subsection (4)(a) to provide that an identification issued to a person in accordance with section 228B(4) must display a photograph of the person, unless the person has been issued with a registration card. Subclause (4) inserts new subsections (5), (6) and (7) in the Act to--  specify the identification requirements of an authorised person who is acting on behalf of a municipal building surveyor, Energy Safe Victoria, or a relevant building surveyor;  specify the identification requirements of a municipal building surveyor or a relevant building surveyor exercising a power under the Act; and  specify the identification requirements of the chief officer when exercising a power as an authorised person. Clause 63 repeals section 228C(3) of the Principal Act because amendments to section 228B specify the identification requirements of a relevant building surveyor and make existing section 228C(3) redundant. Clause 64 inserts new section 228D(6)(ab) into the Principal Act, which empowers an authorised person, for the purposes of an inspection under paragraph (a), to cause any building work to be demolished, opened or cut into, or tested if reasonable required to facilitate inspection. This amendment has been made to place section 36 which has been repealed (see clause 38). 27

 


 

Subclause (2) inserts new subsection (7A) into section 228D of the Act to clarify that the exercise of power under new section 228D(6)(ab) may include destructive testing if the authorised person believes on reasonable grounds that the use of building product or material is connected with a contravention of the Principal Act or the regulations. In that event the authorised person may conduct testing or a building product or material or take a sample of a building product or material. Clause 65 inserts new section 228E(4)(da) and (db) into the Principal Act, which provide that an authorised person who has exercised the power of entry under section 228E(1) may--  conduct destructive testing on a building product or material examined in or on the building or land, if the authorised person believes on reasonable grounds that the use of the building product or material is connected with a contravention of the Principal Act or the regulations;  arrange for destructive testing to be conducted on any building product or material seized or sampled from the building or land. Clause 66 inserts new section 228J(3)(e) and (3)(f) into the Principal Act, which provide that an authorised person who has exercised the power of entry under section 228J may--  conduct destructive testing on a building product or material examined in the or on the building or land, if the authorised person believes on reasonable grounds that the use of the building product or material is connected with a contravention of the Principal Act or the regulations;  arrange for destructive testing to be conducted on any building product or material seized or sampled from the building or land. Clause 67 inserts new section 228L(1)(e) and (1)(f) into the Principal Act, which provide that a warrant issued under section 228K may authorise a person named in the warrant to-- 28

 


 

 conduct destructive testing on a building product or material examined in the or on the building or land, if the authorised person believes on reasonable grounds that the use of the building product or material is connected with a contravention of the Principal Act or the regulations;  arrange for destructive testing to be conducted on any building product or material sampled from the building or land. Clause 68 inserts new section 228N(1)(a)(v) and (1)(a)(vi) into the Principal Act, which provide that warrant issued under section 228M may authorise a person named in the warrant to--  conduct destructive testing on a building product or material examined in the or on the building or land;  arrange for destructive testing to be conducted on any building product or material seized or sampled from the building or land. Clause 69 expands section 228O of the Principal Act, which provides for the seizure and sampling of the things not described in a warrant by inserting a new subsection. New subsection (2) provides that if a thing seized or sampled by an authorised officer under section 228O(1) is a building product or material, the person may conduct or arrange for destructive testing of the product or material. Clause 70 substitutes section 229C(3) of the Principal Act to provide that the requirements regarding retention and return of seized documents and things do not apply to samples taken by an authorised person or seized things subjected to destructive testing. Clause 71 inserts new section 229E(4) into the Principal Act to provide that the requirements regarding the return of a sample taken do not apply to samples subjected to destructive testing. Clause 72 inserts a new section 234E(6)(ba) into the Principal Act to provide that a Court may grant an injunction requiring a person to carry out testing, including destructive testing, of a building product or material or arrange for such testing. 29

 


 

Clause 73 inserts new sections 275 and 276 into the Principal Act. New section 275 provides for general transitional provisions to ensure persons are not retrospectively subject to offences for carrying out certain types of building work that were not unlawful at the point in time contracts where entered or work commenced. The transitional provisions in subsections (2)-(4) provide for a period of 12 months or longer under certain circumstances, during which time a person can apply for registration as a subcontractor or a licence without the offence provisions applying noting that a person cannot know whether they need to apply for registration or a licence to perform prescribed building work until regulations prescribing that work have been made. Subsection (1) provides that if a person enters into a contract, including a subcontract, to carry out building work and after entering into that contact that building work is a type prescribed for the purposes of new section 169EA, new section 169EA will not apply. Subsection (2) further provides that new section 169EA does not apply to a person who carries out the work prescribed for the purposes of section 169EA as a subcontractor or as an employee for a period of 12 months after the relevant building work is prescribed; or for an additional period after 12 months if the person applies for registration as a builder or for a licence as a building employee to carry out the relevant building work during that 12-month period and the Authority fails to grant the registration or licence during that period. Subsection (3) provides that new section 169FA does not apply to a person who engages an unregistered person as a subcontractor to carry out work prescribed for the purposes of section 169EA for 12 months after the relevant building work is prescribed; or for an additional period after 12 months if the subcontractor applies for a registration as a builder to carry out the relevant building work during that 12-month period and the Authority fails to grant the registration during that period. This will allow for regulations to be made which will prescribe building work for which registration is required and, therefore, make clear when related offences would apply. 30

 


 

Subsection (4) provides that new section 169FB does not apply to a person who directs a person to carry out work that is a type prescribed for the purposes of section 169EA for 12 months after the relevant building work is prescribed; or for an additional period after 12 months if the directed person applies for a registration as a builder or for a licence as a building employee to carry out the relevant building work during that 12-month period and the Authority fails to grant the registration. Subsection (5) provides that new section 25AA(1) applies to a building permit issued between 1 July 2018 and the day that the new section comes into operation. This provision clarifies that a subsequent owner of land, who is subject to a building permit issued after 1 July 2018, may notify the relevant building surveyor that the person is the new owner of the land. The relevant building surveyor may then change the name of the builder on the building permit under section 25AC of the Principal Act, as amended by clause 35, to the new owner. Subsection (6) provides that a registration card issued by the Authority to a registered building practitioner that is a natural person, which contains certain information, on a day before new section 171GA of the Principal Act comes into operation is taken to be a registration card issued under that new section. This provision saves registration cards which include the requisite information. Subsection (7) provides that new section 179(1)(db) of the Principal Act only applies in relation to a breach of dispute resolution order notice issued on or after the day on which that new section comes into operation (see clause 46(2)). Subsection (8) provides that new section 179B only applies to a finding in respect of which a show cause notice was issued before the day on which the new section comes into operation. Subsection (9) provides definitions of amending Act, relevant building work and unregistered person for the section. New section 276 enables the Governor in Council to make regulations of a transitional nature. The power to make transitional regulations expires 1 September 2022. 31

 


 

Clause 74 substitutes item 6 of Part 1 of Schedule 1 of the Principal Act to amend the regulation making power to clarify that regulations may provide for the destructive testing of specified building products and materials. Clause 75 makes statute law revision and other amendments. It substitutes correct references to a "certificate of registration" for incorrect references to a "building practitioner's certificate" in sections 239 and 261(1)(s) of the Principal Act. It also makes an amendment to section 150 of the Principal Act, which is consequential to the repeal of section 36 and the amendments made to section 228D by clause 64. Part 5--Amendment of other Acts Division 1--Amendment of Oaths and Affirmation Act 2018 Clause 76 repeals item 16 in Schedule 2 to the Oaths and Affirmation Act 2018. Item 16.1 in Schedule 2 of the Oaths and Affirmations Act 2018 amends section 231B(2) of the Principal Act, which was repealed by section 46 of the Building Amendment (Enforcement and Other Measures) Act 2017. Division 2--Amendment of the Domestic Building Contracts Act 1995 Clause 77 inserts a new section 49V(3) into the DBCA to require the chief dispute resolution officer to notify the Authority in writing of the cancellation of the breach of dispute resolution order notice. Cancellation of the notice results in the lifting of the suspension, or partial suspension. Division 3--Amendment of the Sale of Land Act 1962 Clause 78 amends the Sale of Land Act 1962 to require that a statement under section 32C(b) of that Act, include a statement that the land is in an area designated as a bushfire prone area, if it is in that area. This is a consequential amendment arising from the insertion of section 192A into the Principal Act by section 78 of the Building Amendment (Enforcement and Other Measures) Act 2017. 32

 


 

Part 6--Amendment of the Local Government Act 1989 Clause 79 inserts new Part 8B--Cladding rectification agreements, in the Local Government Act 1989. The purpose of this Part is to provide a mechanism to rectify non-compliant cladding on buildings. New Part 8B contains new sections 185H, 185I, 185J, 185K, 185L, 185M, and 185N of the Local Government Act 1989. New section 185H inserts new definitions of building, cladding rectification agreement, cladding rectification charge, common property, existing mortgagee, lot, owners corporation, for the purposes of Part 8B. New section 185I provides for a Council to enter into a cladding rectification agreement. The purpose of a cladding rectification agreement is to allow the Council to facilitate the provision of funds so that a land owner may rectify non-compliant cladding on buildings. The Council uses its capacity to raise a charge on the land as a way to ensure that money loaned to the land owner is repaid. New section 185I(1) specifies that the parties to a cladding rectification agreement must include the Council, a lending body, and either the land owner or the owners corporation (where the rateable land is managed by an owners corporation). The lending body may be the Council. New section 185I(2) excludes certain provisions from applying where the land is used for residential purposes. New section 185I(3) and (4) allows for the Minister responsible for the Building Act 1993 to issue a notice on the types of works subject to a cladding rectification agreement, and that these are the only works in respect of which such an agreement can be made. New section 185I(5) specifies matters that must be addressed and included in a cladding rectification agreement. These include--  the lending body is to advance funds for the works; 33

 


 

 the Council is to raise a cladding rectification charge and that the Council (and not the owners corporation) is to collect the money received under the charge to repay the lending body. New section 185J specifies conditions that must be satisfied before a Council enters into a cladding rectification agreement. New section 185J(1) provides that before a Council enters into a cladding rectification agreement, the owner of the rateable land or, in the case of rateable land managed by an owners corporation, the owner of the lot, must give the Council specified details in writing about the property, including debts and existing mortgages owing over the property. It also provides that an occupier of non-residential property is not liable to pay a cladding rectification charge unless they have agreed in writing to pay the charge. New section 185J(2) provides that the Council must give written notice to the owners that the Council requires the information for the purposes of subsection (1) within 60 days of the Council giving notice to the owner. New section 185J(3) provides how to calculate the debt owing under a mortgage in respect of the relevant property where the mortgage is held against more than one property. New sections 185J(4) and (5) provide that before entering into a cladding rectification agreement, the Council must be satisfied that the specified debts on the rateable land, or where the rateable land is managed by an owners corporation, on the specified lot do not exceed the value of the land or lot (whichever is applicable), after the works. New section 185J(6) provides that where an owner does not provide the Council the details specified under subsection (1), the Council can be taken to be satisfied of the matters in subsection (4) or (5) (whichever is applicable). New section 185J(7) provides that the owner must notify any existing mortgagee before a cladding rectification agreement can be entered into. 34

 


 

New section 185J(8) and (9) provide that a Council may still enter a cladding rectification agreement, even if the requirements of subsection (4) or (5) are not met, if (in the case of subsection (4)) all the existing mortgagees of the rateable land agree in writing to the cladding rectification charge, or (in the case of subsection (5)) all the existing mortgagees of the lots agree in writing to the cladding rectification charge. New section 185K provides the conditions that apply where a cladding rectification agreement is entered into in respect of rateable land managed by an owners corporation. New section 185K(1) provides that the owners corporation must not enter into a cladding rectification agreement without the written consent of at least 75 per cent of the owners of the lots and without first notifying the Council in writing of the names and postal addresses of all the owners and which owners consented to the cladding rectification agreement. New section 185K(2) specifies the effect of entering into a cladding rectification agreement with respect to the Owners Corporation Act 2006. New section 185K(3) provides that a cladding rectification agreement entered into in respect of rateable land managed by an owners corporation does not apply to common property on that land, and that the charge must be apportioned based on the separate lots or occupancies on the land. New section 185K(4) provides that an owners corporation is not liable to pay the lending body if the charge is not paid. However, it remains a charge on the land and is subject to recovery, along with penalty interest, in the same way as if it were a service charge. New sections 185L(1) and (2) provide that a Council must declare a cladding rectification charge in respect of the rateable land that is subject to the cladding rectification agreement, and that a charge may be varied. New section 185L(3) provides that the Local Government Act 1989 applies to a cladding rectification charge as if it were a service charge. Note that clause 385 of the Local Government Amendment Bill 2018 inserts a new section into the Local Government Act 1989 that provides that that Act is to be read as if it formed part of the Local Government Act 2018. 35

 


 

Accordingly, if the Local Government Bill 2018 is enacted, it is the intention that new section 185L(3) will operate such that a cladding rectification charge will be taken to be a service charge under the Local Government Act 2018. New subsection (4) provides that the Council may delegate the power to enter into a cladding rectification agreement to the CEO. New sections 185L(5) and (6) provide that a cladding rectification charge must not exceed the expected value of the rateable land after the works are completed, unless all the existing mortgagees agree, and that a cladding rectification charge must be repayable in equal instalments over a period of at least 10 years. New section 185M provides that an occupier of rateable land that is subject to a cladding rectification charge is not liable to pay the charge unless the occupier has agreed to pay the charge. However, an owner must not require an occupier or previous occupier to pay all or part of a cladding rectification charge in respect to residential properties. New section 185N provides that a Council must use its best endeavours to recover a cladding rectification charge but that neither the Council nor the owners corporation is liable to pay the lending body if the charge is not paid. However, it remains a charge on the land and is subject to recovery, along with any penalty interest, in the same way as if it were a service charge. Part 7--Repeal of amending Act Clause 80 provides for the automatic repeal of the amending Act on 1 September 2021. The repeal of the amending Act does not affect in any way the continuing operation of the amendments made by that Act (see section 15(1) of the Interpretation of Legislation Act 1984). 36

 


 

 


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