Chapter 14 TASMANIA
In Tasmania the primary legislation regulating the building industry is the Building Act 2016 (Tas) (Building Act), the Occupational Licensing Act 2005 (Tas) (Occupational Licensing Act) and the Residential Building Work Contracts and Dispute Resolution Act 2016 (Tas) (RBWCDR Act).
Commercial and domestic building work
There are significant differences in the requirements of the regulatory framework depending on whether the relevant work is classified as ‘residential building work’ under the RBWCDR Act or other (commercial) building work.
The following is a non-exhaustive list of examples of ‘residential building work’:
- erecting, re-erecting, constructing, altering, repairing, underpinning, demolishing or removing a residential building;
- adding to, or removing a part of, a residential building;
- the restoration, maintenance, renovation, alteration, extension, improvement or repair of a residential building; and
- the prefabrication of any component that is to form part of a residential building, including the manufacture of a prefabricated dwelling, regardless of where that prefabrication is carried out.
Exemptions and exclusions
A ‘residential building’ is a building or structure that is classified under Volume One of the National Construction Code (NCC) as a:
- Class 1a building
- Class 2 building
- Class 10 building, if that building is associated with a Class 1a building or Class 2 building.
The RBWCDR Act expressly provides that a ‘residential building’ does not include motels, residential clubs and hotels, residential parts of educational institutions, hospitals and prisons.
The RBWCDR excludes several types of works from the scope of ‘residential building work’. For example, work undertaken for the purposes of subdivision of land and delivery of materials
Licencing requirements
The licensing regime for building practitioners in Tasmania falls under the Occupational Licensing Act. This regime replaced the previous system of accreditation under the now-repealed Building Act 2000 (Tas) in 2017.
The Occupational Licensing Act requires that, with some limited exceptions, persons ‘must not manage, carry out, or enter into a contract to manage or carry out, any building services work’ without holding the building services licence for the relevant class of work.
The Occupational Licensing (Building Services Work) Regulations 2016 (Tas) prescribes certain types of work which constitutes ‘building services work’ for the purposes of the Occupational Licensing Act. These works include forms of building, demolition, design, assessment and certification work.
A building services licensee is only permitted to engage in the class of building services work for which the building services licence is held.
Persons exempted from licensing include those engaging in certain types of ‘low-risk work’ prescribed by the Director of Building Control from time to time under the Building Act
An application for a building services licence and renewal must be submitted to the Administrator of Occupational Licensing.
Offences concerning licensing
It is an offence for a person who does not hold a building services licence to purport to be a building services provider. The Occupational Licensing Act also provides that it will be an offence to purport to be licensed in a different class to the one for which a licence is held, to use another’s licence and to lend or allow use of one’s licence.
Contract formalities
Commercial building contracts
There are no formal requirements in the Building Act or RBWCDR Act for commercial building contracts.
Residential building work contracts
Under the RBWCDR Act there are a number of mandatory requirements for the form and content of residential building work contracts.
These requirements include (but are not limited to) that the building contractor ensure the residential building work contract:
- is in English and is readily legible;
- sets out in full all the terms of the contract;
- specifies the names of the parties to the contract;
- if the building contractor holds a licence under the Occupational Licensing Act, specifies the number of the licence;
- includes a description of, and any plans or specifications in relation to, the residential building work to be performed under the contract;
- specifies either –
- the contract price; or
- a method for calculating the contract price and an estimate of the contract price, as determined in accordance with the method of calculation, that is fair and reasonable
- specifies the date of practical completion or the method for estimating the date of practical completion;
Failure to comply with any of these mandatory requirements may attract a penalty.
Statutory warranties
The RBWCDR Act implies warranties into every residential building work contract. These include warranties as to the suitability of material to be used in the works, compliance with all relevant legal requirements and the standard of work to be performed.
These statutory warranties cannot be excluded by agreement. They also ‘run with the land’ so that they and apply to successors in title.
Claims can be made for breach of statutory warranties within six years from completion of the works.
Insurance
The Occupational Licensing Act requires building practitioners to maintain insurance prescribed by the Administrator of Occupational Licensing. The Determination by the Administrator dated 7 December 2016 states that all building services providers licensed under the Occupational Licensing Act will require the level of insurance set out in the Ministerial Order of 30 July 2008 (and amended by the Ministerial Order of 11 May 2011).
The insurance policies currently prescribed for all builders (for all projects they contract for or work on) are contract works insurance and public liability insurance.
If a building practitioner performs work without the prescribed insurance coverage, or falsely maintains that they possess the required insurance coverage, that building practitioner will be liable to pay a penalty.
Remedies
Complaints about building practitioner
Complaints about defective work or contraventions of the Occupational Licensing Act by building practitioners may be made to the Administrator of Occupational Licensing. The Administrator has broad investigative powers and is empowered to make rectification orders or undertake any other action as prescribed.
If the complaint relates to building services work which is defective, the complaint must be made within one year of completion of the work.
Dispute resolution under the RBWCDR Act
The RBWCDR prescribes two dispute resolution methods to assist owners and builders settle any disputes which may arise between them:
- Mediation.
- Adjudication.
Both options are conducted under ‘rapid’ timeframes.
Mediation is free and optional (meaning that neither party will be forced into the process). This option is only open to parties if the residential building work contract under which the dispute has arisen has a value of $20,000 or more and was signed after 1 January 2017. Applications for mediations must be made within 6 years from practical completion.
The mediation process kicks off by either a builder or owner lodging a ‘notice of dispute’ with the Director of Building Control. The Director must then either accept or reject this notice. If the notice is accepted, the Director must appoint a panel of one or more persons to a ‘mediation panel’ to assist the parties to resolve the dispute. The mediation panel must do this within 20 business days.
If a resolution is reached and agreed to by the Director, it can be subsequently ‘registered’ and will be binding and enforceable.
If mediation fails, an owner can apply for adjudication of the dispute by an independent expert panel. This may be done within 12 months from practical completion. This process of adjudication is separate from the process for adjudication of claims for payment prescribed by the Building and Construction Industry Security of Payment Act 2009 (Tas).
The adjudication process kicks off by an owner serving a ‘work-completion claim’ on the builder. This claim must include prescribed details, including (but not limited to) the residential building work to which it relates and the period within which this work is to be satisfactorily completed. If this residential building work is not completed within the period specified in the claim, the owner may make an adjudication application to the Director. A copy of the application must also be provided to the builder.
A builder is entitled to lodge a response to the adjudication application.
After receiving a copy of the application, the Director must decide whether to accept or reject the application. If accepted, the dispute will be referred to an independent expert panel for determination. To assist it to make a determination, the panel may request further submissions, conduct inspections and convene meetings between the parties. The panel is to determine the application as soon as practicable after it is appointed.
The panel may ultimately determine either to issue a ‘work-completion order’ or refuse to issue a ‘work-completion’ order. These orders are enforceable by a court.
The parties are jointly and severally liable for the fees of the panel