Building Productivity Reforms

We propose to regulate prefabricated buildings as standard building work by introducing consistent building approvals, appropriate licensing, tailored certification processes and consumer protections.

We will define prefabricated building work as ‘building work’ to make it clearer what approvals are required and ensure that buildings laws apply.

This means prefabricated buildings will need to meet the same standard as traditionally constructed buildings.

We are also creating certainty by bringing prefabricated homes under consumer protections. You’ll need a home building contract, with progress payment amounts prescribed, and will then be covered by statutory warranties.  

This creates more certainty in the process of designing, planning and building a prefabricated home.

To further increase consumer confidence in modular building, the reforms will also set clear rules for the manufacture, supply, transport, delivery and installation of prefabricated buildings.

We will introduce a licensing framework for key roles in carrying out prefabricated building work through regulations to ensure greater confidence in the quality of the work.  

It is anticipated banks and financiers will be more likely to loan to people building prefabricated homes when there is a contract in place and requirement to comply with the Building Code of Australia. Greater loaning means more people can start building prefabricated homes, which often take less time to build than traditional homes.

To support more timely approvals, we will establish a new building approvals framework for all building classes covering:

• approval to build
• variations to building plans
• post consent processes (including after a CDC is issued)
• occupation/completion approvals

It is proposed to be a modular process, with additional regulatory steps added based on the complexity of the building work. This means unnecessary steps will be removed for less complex building projects.

The changes will be enabled by taking building approvals legislation out of the Environmental Planning and Assessment Act (1979) and moving it into existing building legislation overseen by the Minister for Building.  

This will reflect that building approvals occur after planning approval and signal building work is subject to oversight by the building regulator, Building Commission NSW.

The new building approvals framework will:

• Reduce legislative overlap between planning and building laws.
• Provide an opportunity to remove redundant steps and process.
• Ensure building approvals requirements are scaled to the complexity and risk of the building.
• Introduce staged building approvals to remove the need to have the full building designed before starting work, reflecting industry practice.

Additional amendments we will make to the Design and Building Practitioners Act (2020) to streamline approvals include:

• Where the DBP Act applies, the reforms will mean just one set of construction ready designs is required for building approval.
• Remove the concept of a ‘principal design practitioner’ with design oversight provided by a single ‘approval authority’ – a local council or private certifier.

We're proposing to amend existing legislation to strengthen conflict of interest provisions for certifiers and increase penalties for breaches of these laws.

While most certifiers comply with their statutory obligation to act in the public interest, the reforms will clarify when a conflict arises and when a certifier cannot be involved in the development.

The maximum court-imposed penalties for breaches is proposed to increase from $33,000 to $1.1m and give the regulator the power to immediately suspend a certifier's registration when breaches are found.

These changes intend to increase consumer confidence for certifiers in the building sector as demand for certification services increase.