Posted on May 8, 2020 by Sue Puckeridge and 6

New Certifier Regulations – Impacts for Councils

The Building and Development Certifiers Act 2018 (‘BDC Act‘) will commence on 1 July 2020 together with the  Building and Development Certifiers Regulation 2020 (‘BDC Reg‘). This article discusses the key regulatory changes they will bring and how these changes will affect local councils.

Overview

The BDC Act repeals the Building Professionals Act 2005 (‘Former Act‘). Most significantly:

• it dissolves the Building Professionals Board;
• the Secretary (meaning the Commissioner for Fair Trading, Department of Customer Service, or the Secretary of the Department of Customer Service) now has certain powers in the regulation of building certifiers, surveyors, inspectors and engineers,
• it introduces a regulatory scheme which distinguishes between ‘registered certifiers‘ who carry out ‘certification work‘ and ‘accredited practitioners‘ who carry out ‘regulated work’, and
• it expands a certifier’s responsibility to include supervision of work.

Certifiers (other than a local council) will, as of 1 July 2020, need to be registered under the BDC Act by the Secretary. The registration period is 1, 3 or 5 years.  It is an offence for a person to carry out ‘certification work’ without registration.  A person who does so is liable for a maximum penalty of $110,000 in the case of body corporates and $33,000 for individuals.  Registration is not transferable and lending or hiring a certificate of registration is an offence.

Existing certificates of accreditation will continue but cannot be renewed. Upon expiry, holders of existing certificates of accreditation will need to apply to be registered under the BDC Act and they may be required to undertake oral or written examination to demonstrate their skills. Registered certifiers will need to complete continuing professional development training.

Certification work includes issuing construction, occupation, compliance and subdivisions works certificates which are the functions of a certifier under s6.5 of the Environmental Planning and Assessment Act 1979 (‘EPA Act‘). Body corporates may be registered certifiers under the BDC Act, however, any certification work carried out on behalf of that body corporate, must be by an individual who is also a registered certifier.

On the other hand, accredited practitioners will be issued with certificates of accreditation by accreditation authorities, which include non-government bodies that administer accreditation schemes. Accredited practitioners carry out regulated work. At this stage, only the functions performed by existing ‘competent fire safety practitioners‘ under the Environmental Planning and Assessment Regulation 2000 (‘EPA Reg‘) have been  declared as ‘regulated work’. It is an offence for persons who are not accredited practitioners to carry out regulated work, though the BDC Reg authorises some registered certifers to carry out regulated work.

Accountability and Independence

The BDC Act aims to improve the accountability and independence of certifiers. Similar to the powers of the Building Professionals Board under the Former Act, the Secretary may suspend, cancel or place conditions on a certifier’s registration. The Secretary also has wide powers to investigate any matter that may constitute a breach of the BDC Act or BDC Reg (see s106(1) of the BDC Act). Previously, powers of investigation held by the Building Professionals Board were to investigate the work and activities of certifiers and did not include a power to generally investigate ‘any’ matter that may constitute a breach of the Former Act.

The BDC Act makes consequential amendments to the EPA Act and the EPA Reg. The EPA Reg may now prescribe circumstances in which the Secretary may appoint a principal certifier or prescribe classes of development in which the principal certifier is to be appointed. The EPA Reg may also prescribe that if a local council has been appointed as a principal certifier, that council must not refuse its appointment.

Furthermore, Schedule 5 of the BDC Reg prescribes a code of conduct for registered certifiers. A breach of the code constitutes an offence, with a maximum penalty of $11,000 for individuals and $22,000 for body corporates. There is a broad duty to ‘act in the public interest’ under clause 2(1) of Schedule 5 of the BDC Reg. The BDC Reg does not define what it means to ‘act in the public interest’ and we note that it would not be limited by subclauses 2(2), (3) and (4).

The code also requires registered certifiers to avoid conflicts of interest. Previously, there were limited situations where a conflict of interest would arise. The BDC Act now provides a general test which covers all work undertaken by a certifier. A conflict of interest will arise if:

• a reasonable person would conclude that a registered certifier has a private interest with respect to the certification work, and that private interest may affect the duty of the certifier to act in the public interest,
• the regulations prescribe a circumstance which is a conflict of interest

Clause 24 of the BDC Reg prescribes a couple of circumstances where a conflict will exist.  In addition, s29(2) of the BDC Act includes several examples of conflicts of interest such as:

• where the certifier has a pecuniary interest in the development,
• has worked on the design or construction of a development, or
• where the work is carried out by a councillor or employee of a council in the area of that council, other than on behalf of that council.

Clause 25 prescribes circumstances where a conflict if interest will not arise.

Local Council Certifiers

The BDC Act is confusing as to the requirements for registration imposed on local councils. On the one hand, under s5(2), councils are not required to be registered under the BDC Act to carry out certification work. On the other hand, s112 says that anyone who carries out certain prescribed work under the BDC Reg on behalf of the council, must be registered. Clause 61 of the BDC Reg requires registration for all but three prescribed classes of certification work. Local councils must ensure that for all other work, they engage or employ a persons who are registered certifiers. Failing to do so exposes the council to a maximum penalty of $110,000.

Where registered certifiers carry out certification work on behalf of councils, sections 37 and 46 make clear that they are not excused from compliance with their obligations under the BDC Act. As mentioned above, it is an offence to carry out certification work without registration. Practically, this means that other than the limited types of certification work under clause 61, council employees and anyone councils engage to carry out certification work on behalf of council, will need to be registered under the BDC Act.

The Secretary may also investigate the certification work of both private certifiers and councils. This can be done on his/her own motion or following a complaint. Once the council receives an investigation report, that report must be presented at the next council meeting. Within 40 days of receiving such a report, the council must give written notice of the things done or proposed to be done in light of the recommendations in the report. A final report must be made publicly available by the Secretary.

Councils must keep certain records of registered certifiers who are employed or engaged by the council. That information must be provided to the Secretary within 7 days of a person commencing, or ceasing to be a registered certifier employed or engaged by the council. The council must also document any application and determination of an application for a relevant certificate under the EPA Act and the Swimming Pools Act 1992. 

The Secretary may also enter into arrangements with a council to share information for the purpose of assisting the exercise of functions of the council and the Secretary. For example, there may be an arrangement where the Secretary may request a council to provide information to investigate suspected breaches of the BDC Act.

Moving forward

The aims of the BDC Act and the BDC Reg are to ensure that certifiers carry out a regulatory role impartially, ethically and in the public interest subject to appropriate scrutiny and review.

These aims and measures are to be applauded and will hopefully overcome some past dubious certification outcomes.  It will be interesting to see whether the BDC Act will change developers’ preferences as to whether to use private or council certifiers. There is certainly some scope for the volume of a council’s certification work to increase now that the EPA Reg may make provision for the mandatory appointment of a local council as a principal certifier, however, the circumstances in which a council may be appointed as a principal certifier are yet to be prescribed.

The BDC Act may be viewed here, and the BDC Reg here.

To discuss this blog, please leave a comment or call Elaine Yeo on 02 8235 9712, or Sue Puckeridge on 02 8235 9702.