Submission to. Department of Environment, Land, Water and Planning Building Regulations Review

Transcription

1 Submission to Department of Environment, Land, Water and Planning Building Regulations Review 18 th July 2017

2 1. ABOUT THE HOUSING INDUSTRY ASSOCIATION INTRODUCTION GENERAL COMMENTS STRENGTHENED REGULATIONS REDUCED AND REVOKED REGULATIONS UPDATED REGULATIONS OTHER AMENDMENTS SUMMARY Housing Industry Association contact: Fiona Nield Keith Ryan Executive Director Victoria Manager Workplace Services 70 Jolimont Street 70 Jolimont Street EAST MELBOURNE, VIC 3002 EAST MELBOURNE, VIC, 3002 Phone: Phone: f.nield@hia.com.au k.ryan@hia.com.au - i -

3 1. ABOUT THE HOUSING INDUSTRY ASSOCIATION The Housing Industry Association (HIA) is Australia s only national industry association representing the interests of the residential building industry, including new home builders, renovators, trade contractors, land developers, related building professionals, and suppliers and manufacturers of building products. As the voice of the industry, HIA represents some 40,000 member businesses throughout Australia. The residential building industry includes land development, detached home construction, home renovations, low/medium-density housing, high-rise apartment buildings and building product manufacturing. HIA members comprise a diversity of residential builders, including the Housing 100 volume builders, small to medium builders and renovators, residential developers, trade contractors, major building product manufacturers and suppliers and consultants to the industry. HIA members construct over 85 per cent of the nation s new building stock. HIA exists to service the businesses it represents, lobby for the best possible business environment for the building industry and to encourage a responsible and quality driven, affordable residential building development industry. HIA s mission is to: promote policies and provide services which enhance our members business practices, products and profitability, consistent with the highest standards of professional and commercial conduct. The residential building industry is one of Australia s most dynamic, innovative and efficient service industries and is a key driver of the Australian economy. The residential building industry has a wide reach into manufacturing, supply, and retail sectors. The aggregate residential industry contribution to the Australian economy is over $150 billion per annum, with over one million employees in building and construction, tens of thousands of small businesses, and over 200,000 sub-contractors reliant on the industry for their livelihood. HIA develops and advocates policy on behalf of members to further advance new home building and renovating, enabling members to provide affordable and appropriate housing to the growing Australian population. New policy is generated through a grassroots process that starts with local and regional committees before progressing to the National Policy Congress by which time it has passed through almost 1,000 sets of hands. Policy development is supported by an ongoing process of collecting and analysing data, forecasting, and providing industry data and insights for members, the general public and on a contract basis. The association operates offices in 23 centres around the nation providing a wide range of advocacy, business support including services and products to members, technical and compliance advice, training services, contracts and stationary, industry awards for excellence, and member only discounts on goods and services. Page 3 of 12 Submission to DEWLP - Building Regulations Review

4 2. INTRODUCTION HIA welcomes the opportunity to comment on the exposure draft of the Building Regulations 2017 ( the proposed Regulations ) which will replace the Building Regulations 2006 together with the Regulatory Impact Statement ( RIS ) and related papers. 3. GENERAL COMMENTS Red Tape Reduction It is a regular occurrence for governments to stress the importance of reducing the burden of regulation and cutting red tape. However in many cases governments introduce new regulations that impose additional red tape and increase the costs of complying with regulation. While the proposed Regulations are not an extreme example of new red tape they do impose increased regulatory and administrative burdens and especially so on building surveyors. While the proposed Regulations do decrease the amount of printed copies of documents that need to be provided to building surveyors they do increase the reporting requirements of building practitioners to government. The increased requirements for building surveyors to report to the Victorian Building Authority (VBA) are especially likely to impose unnecessary costs on the building industry and consumers. HIA accepts that many of the administrative changes in the proposed Regulations are necessary as a response to reviews of the building legislation and are an attempt by the Victorian Government to simplify the process for many regulatory steps. However, these regulations do increase the cost of regulation and will subsequently cause an increase in the cost of building. This is especially so with the domestic building industry. There are many small businesses operating in this segment of the industry and the amendments will have a significant and disproportionate impact. There is also concern that the additional regulatory burdens imposed on building surveyors will disrupt the market for this service. This is a segment of the building industry that is already challenged by increasing costs, especially for insurance, and difficulties in attracting new building surveyors to the industry. There is a risk that these reforms will result in a reduction in the number of building surveyors overall or the consolidation of the number of building surveyors with larger building surveyors winning market share from smaller building surveyors. This may over time reduce the level of competition and this may cause prices of building surveyor services to increase. This is likely to increase the cost of building houses which is an unfortunate outcome when the Victorian Government is introducing other reforms to improve housing affordability. Mandatory notification stages HIA does not support the proposed introduction of three additional mandatory notification stages for the construction or alteration of a building. The introduction of these additional mandatory inspections will have a significant impact on the building industry and on housing affordability broadly. The additional cost to industry is estimated at being in the region of $88.1 -$142.5 million a year or $ $ million Net Present Value (NPV) over 10 years. Breaking this down, this means approximately additional $1000 per dwelling. This amount does not account for the increased costs incurred by builders in arranging and booking these additional inspections or any allowance for delays in the building process as builders wait for the outcome of the additional inspections. While many building surveyors can provide prompt results to builders there still will be some degree of delay. The calculations also do not seem to include any allowance for the increased demand for building inspections and the potential for this to increase costs unless there is a corresponding increase in the supply of building inspectors. Page 4 of 12 Submission to DEWLP - Building Regulations Review

5 The perceived evidence to support the introduction of this substantial additional cost burden on industry is based on anecdotal evidence only, suggestions from certain stakeholders and trying to link this to building defects. On the matter of building defects, the RIS does not provide substantiated evidence to say that the problem has been that the construction did not comply for an example with the BCA requirements for waterproofing of wet areas. Rather it just provides costs associated with where rectification works have been undertaken. The defect itself could be due to a range of matters such as lack of maintenance, the waterproofing being breached by subsequent installations, the building work carried out without a building permit and by unskilled practitioners, a burst pipe in an adjoining area causing the damage, the age of the property, etc. As pointed out in the RIS from the evidence of current building inspections, for the current stages being inspected building surveyors/inspectors are finding very few items of non-compliance The RIS points out that New South Wales currently has a mandatory notification stage for waterproofing. However, what it doesn t point out is that majority of all states and territories do not have a mandatory inspection for waterproofing, fire resisting construction or stormwater installations. HIA has reviewed the current inspection regimes in each of the states and Territories and what this shows is that the 4 mandatory notification stages as per the current Victorian system, is the common system applied by majority of states and territories. Further to the above, the RIS acknowledges, an assessment has not been undertaken of whether the outcomes in relation to waterproofing are better in NSW than in Victoria due to a having a mandatory inspection stage. From HIA s understanding defects associated with wet areas continue to be a common issue in NSW. If from the VBA s recent audit of buildings, common building issues have been identified, HIA suggests that there may be the potential for improvements to the NCC to assist in interpretation of the code and/or development of resource material to assist practitioners on targeted areas of common non-compliances. This point is made as HIA considers that are improvements that could be made to the National Construction Code (NCC) fire resistance provisions, stormwater provisions and wet area construction provisions in both Volumes One and Two to resolve interpretation and application matters. HIA would be willing to work with the VBA on these matters to ensure the Code provisions are clear and unambiguous which would also enable further compliance rather than adding further regulatory red tape. Finally, with greater scrutiny of fire protection and waterproofing work there may be some short term distortions in the cost of contractors as some contractors who cannot provide satisfactory work drop out of the market. This is not unwelcome by itself and may in the longer term result in higher quality of this work. Some of these contractors may however seek to remain in the building industry by working for owner-builders and/or being involved in building work without the scrutiny of the building permit process. Pool barriers Pool barrier changes appear to have been driven by a recent report from the Coroner. HIA supports regulation that will improve the safety of residential pools but notes that these amendments in the proposed Regulations appear to have been included in the regulation with little consultation. Other stakeholders with a more direct interest in this area will no doubt make detailed submissions on this matter. Page 5 of 12 Submission to DEWLP - Building Regulations Review

6 HIA notes that the Victorian Government has recently shown a tendency to react to negative events by proposing further legislation. While legislation can be a legitimate solution to a regulatory problem the speed with which the government has imposed a legislative solution does not provide HIA with confidence that there has been an adequate or considered review of the problem. While it is easy to claim that a problem is solved by referring to new legislation this ignores the reality that the problem may have been solved by other means and that the new legislation still needs to be enforced. 4. STRENGTHENED REGULATIONS Proposed Regulation 55 - Duties of the Building Surveyor The proposed regulation 55 will require building surveyors to provide significant amounts of additional information each month to the VBA about the building permits they issue. HIA questions whether the VBA will actually make use of this information and/or have the resources to make use of the information. There is a significant risk that the proposed regulation will impose major costs on the government, the building industry and consumers but that the collected information will rarely be used. The assumption in the RIS documentation that a 150% increase in information categories will result in a 150% increase in time taken to record information is simplistic. An increase in the number of information categories also increases the complexity of the process and the risk of errors being made and more checks therefore being needed. HIA expects that the cost implications of the proposed amendments will be greater than anticipated by the Victorian Government. It will take time for the building industry to update reporting systems and possibly six months could be a reasonable time to allow for updating of the systems. The information that must be provided to the VBA will already be collected by building surveyors. Building surveyors will however need guidance from the VBA about how this information will need to be provided. The proposed six month lead in time will only be reasonable if the Victorian Government is able to provide adequate guidance to the building industry about how this information is to be lodged with the VBA. Implementation of this measure will need to be carefully monitored and adjustments made as required if the six months allowed is inadequate. Finally, on a related matter HIA notes that the assumption that including additional information in a building permit will increase the level of compliance with the building legislation may be misguided. Making regulatory documents more detailed is not necessarily going to improve compliance and may even decrease compliance. Feedback from HIA members is that consumers dislike and get confused by longer and more complicated documents. There is a risk that this reform is more about creating the perception of fixing a problem rather than improving compliance. Having more boxes to tick does not necessarily improve compliance. Proposed Regulation Time Limits for Building Work and Permits The proposal to include more detailed provisions about the lapsing and extension of building permits is supported. While the proposal to require warnings that a permit will lapse does increase the regulatory burden on building surveyors it is likely that most already provide some form of warning to owners and builders. Having a clear regulatory power and responsibility to provide a warning will provide more certainty about this process. Recent amendments to the Building Act 1993 that have not yet commenced also provide for the suspension of building permits. HIA expects that some building permits will lapse due to disputes between owners and builders and eventually the contract between the owner and builder being terminated. Once the new suspension of building permit provisions commence the regulations may need to be amended to provide for the lapsing of building permits during a suspension. Page 6 of 12 Submission to DEWLP - Building Regulations Review

7 Proposed Regulation Protection Work Notices The proposed regulations require building surveyors to provide more information to adjoining owners about the making of decisions about protection works and the adjoining owner s rights. In theory this could result in less delays to the protection works process as adjoining owners would have more information about the proposed protection works and could make better informed decisions about the adequacy of the protection works. Any improvements in the information provided to adjoining owners would not prevent delays if there are other reasons for these owners to challenge protection work notices. Many consumers and builders experience delays in finalising protection work processes due to adjoining owners seeking to re-open or continue challenges to the planning approval for the building work. The proposed regulations do nothing to address this issue. The proposed Regulations for protection work notices as outlined are unlikely to impose significant costs on building owners but it is questionable that any significant benefits will be achieved by the additional information being provided. It is also possible that the provision of more information will only be of benefit to adjoining property owners who have an incentive to misuse the protection works process. HIA understands that many builders have to undertake more protection work than required to satisfy some adjoining owners. This may in part be caused by builders needing to negotiate with adjoining property owners to access their land to safety and/or conveniently complete building work. There have also been cases where builders have had to complete unrelated building work for the adjoining property owner to get their support for building work on their client s land to commence. The proposed regulations do nothing to address these issues. Proposed Regulations Pool Barriers HIA does not oppose the proposed regulations about barriers for swimming pools and spas and supports in principle regulatory reforms that are aimed at increasing child safety. There are practical difficulties with retrofitting pool and spa barriers and the RIS correctly identifies that the total costs is difficult to quantify. The costs of such work to some home owners will be significant and there is a possibility that some home owners may elect to remove their pool or spa or sell their home before January The proposed regulations 142 to 145 introduce new offences for owners and occupiers of private land. Introducing these new offences may encourage owners and occupiers to take more care for the maintenance and use of pool and spa barriers but regrettably it is likely that enforcement of these offences will only occur after an incident. Proposed Regulations Mandatory notifications Mandatory notification stages for checking fire resistance and waterproofing are not well justified in the RIS. It is unclear as to how further inspections as proposed will actually address concerns about the compliant installation of these measures. There is no properly constituted argument to show the cost benefit of providing these additional stages and the relationship with compliance. The case for imposing a mandatory notification stage for stormwater drainage is even less clear. There seems to be a perception in the documentation that building surveyors and builders are not motivated to carry out building inspections. While any regulatory requirement can be breached, the HIA experience is that most builders and building surveyors take their responsibilities with respect to inspections seriously. For example, building practitioners can be exposed to legal claims if they fail to comply with the existing inspection requirements. Page 7 of 12 Submission to DEWLP - Building Regulations Review

8 While the role of a building surveyor is often misunderstood by building owners they still have an incentive to ensure that the building works are being carried out properly. Builders also have an incentive to ensure that the inspections are carried out by building surveyors to ensure that they are paid for their frame progress stage but also because the inspections are a useful check of the completeness and quality of building work. Many builders are grateful for the feedback and information from building surveyors as a result of inspections as it assists with compliance around these matters. In the RIS a question is asked about the consequences of there being no mandatory inspections. If there was no regulation requiring mandatory inspections it is likely that inspections by building surveyors would be significantly reduced. Many builders would not be able to incur the costs of inspections if their competitors were not incurring such costs and were able to accordingly reduce their contract prices. One outcome of increasing the number of mandatory inspections is that it imposes on compliant builders a further competitive disadvantage with the unregulated and non-compliant builders who are engaged by ignorant owners or owners wishing to minimise the cost of their building work. As explained above and in section 2 of this submission, these proposed reforms will have an impact on the building process as the builder will need to ensure that building work is scheduled to allow the building surveyor to inspect walls and wet areas. With some building work this may require multiple inspections by the building surveyor. The cost of each inspection by a building surveyor (or registered building inspector) will quickly add up for builders and consumers and provide a negative impact on housing affordability. 5. REDUCED AND REVOKED REGULATIONS HIA questions whether the changes as outlined will significantly reduce the regulatory burden imposed on the building industry. The proposed Regulations could have removed entirely the requirement for an applicant for a building permit to lodge a hard (printed) copy of the relevant documents if electronic copies were lodged with the building surveyor. HIA accepts that requiring at least one hard copy of each document does create a paper trail and notes that many people still use hard copies of documents. It is likely that in practical terms the requirement to produce one hard copy will continue to encourage the use of printed versions of documents for the foreseeable future. For this reason, the benefits of the proposed reform are likely to be less than anticipated. It is possible that the discretion of building surveyors to not require all necessary documents be lodged with building permit applications will result in cost savings. However the proposed Regulations do generally impose a higher standard of documentation and reporting on building surveyors. With this increased emphasis on accountability it is likely that many building surveyors will decide not to use this flexibility. For this reason the costs savings expected are unlikely to be achieved. The amendments that remove inconsistencies between planning and building legislation are in principle supported. HIA suggests that further work is required however to reform planning legislation to support the Victorian Government s policy of improving housing affordability. 6. UPDATED REGULATIONS The following comments are in regards to the proposed regulation updates. Proposed Regulations Building permits The proposed amendments to make prescribed forms, such as the application for building permit form, mandatory are supported. However there may be some costs to building practitioners in updating their business systems and processes if they have used non-prescribed forms in the past. Page 8 of 12 Submission to DEWLP - Building Regulations Review

9 The power for a building surveyor to exempt an application for a building permit in respect of a stage of building work no longer includes the power to exempt from what was regulation 305 (proposed regulation 37) but since that regulation is discretionary this is not seen as a material change. The amendment to what was regulation 305 to allow building surveyors to require inclusion of a list of essential safety measures is not opposed but further guidance may be required for building practitioners. HIA does not oppose the requirement to document building permit assessment decisions though it does impose an administrative burden. The proposed Regulations however do need to recognise that many builders use performance solutions on a regular basis and the building surveyor will be able to rely on previous assessments to justify their decision. Proposed Regulation 68 - Siting HIA notes that proposed regulation 68 is described in the RIS as clarifying that the siting exemptions only apply if the matter has been assessed as part of a planning permit application. The proposed regulation 68 (currently regulation 401) actually requires the applicant to satisfy the relevant building surveyor that the matter has been assessed as part of a planning permit application. This is a change from regulation 401 which does not include such a requirement that a siting assessment be undertaken. This would seem to be an additional regulatory burden on building owners and building practitioners. It is also noted that proposed Regulation 68 only requires that there be an assessment, and not also a determination, before the regulation may apply. It would be preferable to use consistent terminology with the planning legislation. Proposed Regulations Clearances The changes to the vertical clearances for projections are not opposed. While the normal height restriction for a motor vehicle is 4.3 metres, HIA understands that motor vehicles with a height up to 4.6 metres or higher can be approved to use roads. Therefore the proposal to require that the height of a projection be at least 5 metres above the carriageway of the road is reasonable. While the justification for this reform in the RIS is limited it is understood that the costs of damage to motor vehicles and property caused by collisions with property should be minimised by the reform. Proposed Regulations prescribed mandatory notifications The proposed regulations 170 and 171 are an amendment from the current regulation 901. The proposed regulations specify mandatory notification stages for demolition or alteration of a building and for the construction of a swimming pool. These requirements are not in the current regulations but may reflect current practice of building surveyors. In the RIS this change is described as being for the purpose of reducing interpretation issues about how the existing mandatory notification stages apply to these types of building work. There otherwise appears to be no assessment of the impact of this change. While building surveyors may vary the notifications stages under current regulation 901(2) the proposed change does impose stricter requirements on building surveyors. It is noted that proposed regulation 172 which replaces current regulation 901(2) does not allow the building surveyor to vary the mandatory notification stages for demolition or alteration of a building. While the proposed mandatory notification stages appear relatively clear and appropriate there will be situations where effectively requiring all these stages may not be practicable or necessary. It is recommended therefore that the proposed regulation 172 be amended to refer to regulations 170 and 171 as well as regulation 169. Page 9 of 12 Submission to DEWLP - Building Regulations Review

10 Regulations Notices and orders Amendments that require the building surveyor who has issued an emergency order, building notice or building order to identify who carried out the inspection and both the date and the time of the inspection are supported. Introducing the prescribed forms 12 to 16 is also supported though clarification about why they are not mandatory instead of being optional is sought as this is a departure from the practice in these proposed regulations of making forms mandatory. Regulations Building practitioner registration The amendments to the exemptions for certain building practitioners engaging in low value domestic building work is supported as they are consistent with recent reforms in the Domestic Building Contracts Regulations However HIA does query the value of the proposed regulations 263(2) and 264(2). Allowing people engaged in low value domestic building work (under $10,000) or building Class 10 buildings such as signs to call themselves building practitioners may confuse consumers. There is already a significant issue with unqualified builders working for consumers and this amendment may be misused. Arguably the consumer would not necessarily understand the difference between a building practitioner and a registered building practitioner. HIA suggests that the need for this amendment be reconsidered. The RIS makes no reference to the recently implemented changes to the prescribed qualifications and scope of works for registered building practitioners. While these changes were implemented in separate regulations they have not been justified by a regulatory impact statement and it is understood that the changes will be included in the final version of these proposed regulations. Most applicants seeking registration for domestic building currently complete a Certificate IV training course and then undertake an assessment with the Victorian Building Authority to achieve their registration. HIA understands that there was some uncertainty about this process and on this basis the regulations may benefit from updating. The amended regulations now impose at first glance a requirement that an applicant for a Domestic Builder Unlimited Registration obtain a Diploma as a minimum requirement for domestic building work. While the HIA has been reassured that in practice other qualifications, such as a Certificate IV Course together with experience can be used as well, there is concern about the new regulation. In the absence of a RIS in regards to the recent changes, the Victorian Government has not presented any evidence to HIA to justify this change or validate how it will lead to better outcomes in the delivery of residential buildings. Proposed Regulation Appeal Period While HIA does not oppose the proposed regulation 266, which is a greatly expanded version of current regulation 1601, it may have been better to make this regulation in the form of a table and had clear links between regulation numbers and appeal periods. Clarifying the triggers for appeal periods is supported but it is unfortunate to clarify only in part the amount of information available to identify appeal periods. Proposed Regulation Exemptions In regulation 275 there is an incorrect reference to Schedule 3 when it should be to Schedule 4. Allowing for construction of a shed up to 10m2 on undeveloped land is supported. The clarification of when a sign can be built without a permit is not opposed and makes the legislation more consistent. Page 10 of 12 Submission to DEWLP - Building Regulations Review

11 7. OTHER AMENDMENTS There are some proposals for regulation reform discussed in the RIS that are not included in the proposed Regulations. HIA suggests that three of these proposals should be included in the proposed Regulations. Allowable encroachments in front setbacks HIA supports the proposal for expanding allowable encroachments into front setbacks. Applications for greater setbacks are understood to be a common report and consent application and often unnecessary delays to the building approval process. The effect on neighbourhood character of allowing carports and balconies to encroach is often the same as for pergolas, porches and verandas as they are similar structures. It is not clear why there needs to be a distinction between the types of structures. This is an amendment that should be made now to reduce red tape and prevent unnecessary delays to the building approval process. This change would be welcomed by building designers, building surveyors, builders and in turn home owners/clients. Decks HIA suggests that decks under 1 metre high present a low risk as they don t require a barrier and therefore should be exempt from the requirement for a building permit if built in isolation. There is generally no need for engineer designs or any complicated construction methods as decks are relatively simple structures. A floor area size restriction for decks under 1 metre in height is also not necessary as the size of such decks is not relevant to the risk of building or using the deck. It is recommended that Schedule 4 of the proposed Regulations provide that decks under the height of 1 metre be exempted from the need for a building permit. Retaining walls for landscape There should be exemption for retaining walls up to 1.5 metre, and not the current 1 metre, if the wall is not supporting the dwelling or only used for landscaping and is not used for other building work or the protection of adjoining property. No engineering is required for such walls and other states do allow such an exemption. HIA also notes that the recent Victorian Civil and Administrative Tribunal (VCAT) decision of Cataldo v. Tardio [2017] VCAT 14 indicates that work such as landscaping, paving and retaining structures) done in isolation of any building work on the actual home is not domestic building work. The proposed exemption would further relieve the regulatory burden for minor building work on homes. It is recommended that Schedule 4 of the proposed Regulations provide that retaining walls under the height of 1.5 metres be exempted from the need for a building permit. Page 11 of 12 Submission to DEWLP - Building Regulations Review

12 8. SUMMARY The Building Interim Regulations 2017 expire on 3 June The Victorian Government has time to consider all of the submissions received and make appropriate amendments to the proposed Regulations. The Victorian Government has with recent building legislation often had to make further amendments in subsequent legislation. HIA recommends that the Victorian Government does not rush the completion of the proposed Regulations and also seeks further feedback before finalising the regulations. There are two key points that HIA has raised in this submission. One point is the increased regulatory burden imposed on the building industry, and particularly building surveyors and small building businesses. The consequences of imposing this additional red tape on the building industry have not been adequately justified. Second, the impost of three additional mandatory notification stages and inspections has not been justified. While these measures appear to be in response to issues raised with the quality of some waterproofing and fire rating building work, they are a blunt and badly targeted response. The Victorian Government should be considering other measures including, non-legislative measures, to address these concerns. This option has not been explored in the RIS or elsewhere. HIA would be happy to further discuss any matters raised in this submission with the Department at any time. Page 12 of 12 Submission to DEWLP - Building Regulations Review