Posted by Ben Robertson | 13 April 2021 | Civil Contractors and Construction
These conflicting sector results show a marked increase year to date for Building Approvals for Detached Housing – but also a decline over the same period for Approvals for Units & Apartments.
The buoyancy of the detached housing market can no doubt be attributed to the Federal Government HomeBuilder stimulus package, which saw an increase in contracts in December 2020 and a likely increase in contracts in March 2021.
The MBA has reported that for civil construction works to the September 2020 quarter – $5.4B worth of works started, $6.2B worth of works performed and $16.96B worth of works yet to be performed; with the breakdown of the works to be performed as follows:
Design and Building Practitioners Act 2020 (NSW)
Looking forward, the Design and Building Practitioners Act 2020 (NSW) will commence from 1 July 2021. The operative regulations were published on 9 April 2021 and industry stakeholders should ensure their systems are ready to adjust to the new upcoming regulatory environment.
Key features of the legislation include mandatory compliance declarations for building elements and performance solutions at the design and construction phases of multi-storey residential apartment construction projects, with lodgment of compliance documentation through the NSW Planning Portal at four key phases being:
Security of Payment Act 1999 (NSW)
From 1 March 2021, all NSW residential builders can now use the Security of Payment legislation in the event of a payment dispute. Previously the paper-based adjudication system contained in the Security of Payment legislation was only available for commercial buildings, investment buildings, or sub-contractors across all projects. This change will be welcomed by residential builders who now have a mechanism to recover payments in the event of a dispute in much quicker time than through a litigated pathway via the Tribunal or Court system.
Click to watch our SOP webinar presentation, in which we explain:
Do you know the differences between your State Security of Payment Regimes?
As demonstrated in the recent decision in the Queensland case of Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd & Ors; Jones v Galaxy Developments Pty Ltd & Ors  QCA 10, it is important to be aware of the strict timeframes set by your States’ Security of Payment regime – as it may result in an adjudication decision being made void and could cause a claimant to lose their right to payment under the relevant Act.
The Victorian Court of Appeal has handed down its decision in the application for leave to appeal from the decision of VCAT in the Lacrosse Apartment fire litigation**. The application for leave to appeal was largely unsuccessful and the Court of Appeal agreed with the interpretation of the relevant BCA in place when the apartment was constructed and found that the ACP used was not compliant with the BCA. Ultimately the appeal which will now proceed may result in an adjustment of the apportionment of damages between the consultants in the first instance and it remains to be seen to what extent the apportionment will be altered.
Click to read Nexus Construction’s previous Combustible Cladding Update regarding Victoria prohibiting the use of ACP containing greater than 7% polyethylene
In our opinion, the construction sector will remain a key driver for the economy and is likely to remain robust over Q2 – Q4 in 2021.
On 17 July 2021, the NSW Government issued a public health order directing that work not be carried out on construction sites in Greater Sydney. "Following construction sites being shut down over 17 – 18 July 2021, builders and subcontractors should review their contracts closely and attend to issuing contract notices for extensions of time and suspension of work as applicable," said Nexus National Practice Director Ben Robertson.
"With NSW Design & Building Practitioners Act 2020 coming into force on 1 July 2021, there will be a 12 month transition period to allow industry to adapt to the new provisions," said National Practice Director Ben Robertson.
"As we reported last year, business interruption policy insurers lost a significant test case in the NSW Court of Appeal when the court found that many exclusion clauses, which insurers sought to rely upon to deny claims for business interruption due to COVID 19, were invalid," said Nexus National Practice Director Construction & Infrastructure Ben Robertson.