Chapter 14 NORTHERN TERRITORY
The primary legislation regulating the Northern Territory building industry is the Building Act 1993 (NT) (Building Act), the Building Regulations (Regulations), the Building (RBI and Fidelity Fund Schemes) Regulations and the Building (Resolution of Residential Building Work Disputes) Regulations.
The Building Practitioners Board (Board) is the statutory body created under the Building Act to regulate building practitioners.
Types of building practitioners
There are five categories of building practitioners under the Building Act.
If a person or a company intends to work as a building practitioner, they need to make an application to the Board to be registered in one of the following categories:
- building certifier;
- certifying architect;
- certifying plumber;
- certifying engineer; and
- building contractor (which is further subcategorised as residential (restricted) or residential (unrestricted).
Builders performing residential building works must be licensed in the building contractor category.
Registration as a building contractor
Requirements for commercial and residential builders
There are significant differences in the licensing requirements for residential and non-residential builders in the Northern Territory.
A builder performing residential building works otherwise known as prescribed building works under the Building Act (Prescribed Building Works) must be registered as a building practitioner in the category of building contractor residential (restricted) or building contractor residential (unrestricted).
Prescribed Building Works are works worth more than $12,000 on any of the following:
- a Class 1a detached house;
- a Class 2 building, such as attached units or flats;
- a Class 10 building attached to and built at the same time as the Class 1a or Class 2 building, such as an attached garage, carport or retaining wall; or
- a retaining wall that is not attached but is critical to the structural integrity of the building.
The Board is required to register an individual as a building contractor if satisfied that the applicant:
- is a fit and proper person test;
- has the relevant qualifications and experience; and
- holds (and will hold during the registration period) at least $50,000 of net financial assets.
There is no requirement to be registered to perform commercial or industrial building work under the Building Act.
A person may apply to the Board to be registered as a building practitioner using the prescribed form and paying a monetary amount to the Board. The Board will then consider the application and, if registration is granted, must issue a certificate of registration to a person, firm or corporation as evidence of their registration as a building practitioner. Registration is for two years from the date granted or renewed.
Requirements for companies
The Building Act regulates the licensing and registration of companies. To perform Prescribed Building Works, a company must be registered with the Board as a building practitioner in the category of building contractor residential (restricted) or building contractor residential (unrestricted).
The Board is required to register a company as a building contractor if satisfied that:
- all the directors of the company would be fit and proper persons to be registered if the application had been made by them personally;
- at least one director or a nominee of the company is a building practitioner in the category of building contractor to which the application relates, and that director will provide adequate supervision of the building work carried out by the corporation; and
- the company holds (and will holding during the registration period) at least $50,000 in net financial assets.
Individuals registered on behalf of a company
As recognised in the registration requirements for companies, in the Northern Territory a company may carry out the functions of a building contractor if one of the company directors or a nominee of the company is a registered building practitioner in the building contractor category.
In these circumstances, the name of the registered building practitioner must appear on all of the company’s advertisements, and they must supervise the building works and play an active role in the management of the company.
Suspension or termination of registration
A building practitioner (company or individual) may have its registration suspended or cancelled for acts of professional misconduct, for example, if a building practitioner has authorised or permitted the performance of works of the type that it is not registered to perform or supervise.
Complaints and offence
The Director of Building Control (Director) has the power under the Building Act to investigate complaints and take action against registered building practitioners.
A person may complain to the Director about a registered building practitioner on one or more of the following grounds:
- the building practitioner has committed an offence under the Building Act or the Regulations;
- the building practitioner has carried out work in a negligent or incompetent manner;
- the building practitioner is otherwise guilty of professional misconduct.
The Director may dismiss the complaint without investigation in certain circumstances, such as where the complaint is without foundation or is frivolous or vexatious, but is otherwise required to investigate the complaint as soon as practicable after giving the building practitioner formal notice of the complaint and at least 5 working days to respond to the complaint.
If there is evidence that the building practitioner has committed an offence, the Director may decide to prosecute the building practitioner for the alleged offence. However, if there is evidence that the building practitioner is guilty of professional misconduct, the Director must refer the matter to the Board for inquiry.
The Board has the power to conduct inquiries into the work and conduct of the building practitioner and, if necessary, to discipline the building practitioner.
No provision for interim registration
There are no interim or temporary building practitioner registrations available under the Building Act.
Contract formalities
A building contractor must not be commence or continue to carry out Prescribed Building Work unless the building contractor has entered into a contract with the owner of the land or with a person authorised by the owner to enter into the contract. However, a contract is not required if:
- the value of the building work is less than $12,000; or
- the building contractor is the owner of the land on which the building work is to be carried out, except if at any time after the building permit for the building work is granted, the building contractor enters into an agreement with a person providing for:
- the land to be transferred to the person before an occupancy permit is granted for the entire project; and
- the person to make progress payments at times during the term of the agreement as the building work is carried out.
A residential building contract for Prescribed Building Works must include the following provisions:
- relating to building work that is to be carried out on a single project (work)
- identifying the building contractor who will carry out the work
- specifying the building contractor’s registration number
- specifying the extent of, and contracted price for, the work
- if the contract provides for the payment of a deposit, specifying the deposit payable (which must not be more than 5% of the contracted price)
- specifying the stages of the work to which progress payments are linked and the amount of each progress payment (which is regulated by reg 41HA & 41HB of the Regulations)
- relating to the process for resolving disputes between the building contractor and the owner of the land
A building practitioner who enters into a non-compliant building contract commits an offence with a maximum penalty of $14,400.
There are no statutory requirements for contracts relating to commercial or industrial building work.
Consumer protection
The Building Act contains a number of consumer guarantees which apply to building work, of any value, in connection with the construction of a residential building (residential building work), including that:
- the builder carrying out residential building work (residential builder) will carry out the building work in a proper and workmanlike manner;
- the builder will carry out the building work in accordance with the plans and specifications specified in the building permit for the work and the contract (if applicable);
- all materials supplied by the builder will be:
- good and suitable for the purpose for which they are to be used; and
- new (unless the builder is an owner-builder or developer of the contract specified otherwise);
- the builder will carry out the building work in accordance with the Building Act and Regulations;
the builder will carry out the building work with reasonable care and skill; - the builder will complete the work by the date specified in the contract or, if no date is specified, within a reasonable period.
These consumer guarantees cannot be excluded from a contract for residential building work and are in addition to other consumer rights in force under any other law.
If a construction contract does not deal with the following issues, the schedules to the Construction Contracts (Security of Payments) Act (NT) may also imply terms into construction contracts relating to:
- variations;
- making payments;
- ownership of goods;
- unfixed goods; and
- retention money.
Insurance protection
A residential builder must not carry out residential building work unless an authorised Residential Building Insurance policy or fidelity certificate is in force for the work which has been provided to the owner of the land.
An authorised Residential Building Insurance policy and a fidelity certificate protect the beneficiary of the policy or certificate against financial loss where the residential builder:
- has failed to complete the work; or
- has contravened a consumer guarantee.
Payment will be triggered if the residential builder has died, disappeared, become bankrupt or insolvent, or if the builder’s registration has ceased.
The Master Builders Association NT manages the Master Builders NT Fidelity Fund which provides owners with protection against financial loss for incomplete or defective building work. A Fidelity Certificate provides owners with six years of cover for structural defects and one year of cover for non-structural defects.
Dispute resolution
The Commissioner of Residential Building Disputes receives complaints from owners in relation to defective building work, breaches of contracts and/or consumer guarantees. The Commissioner can hear and determine complaints and can prescribe alternative dispute resolution procedures.