4.1 implementation of the building act 2011 and … · ordinary meeting of council 21 march 2012...

Ordinary Meeting of Council 21 March 2012

4.1 IMPLEMENTATION OF THE BUILDING ACT 2011 AND BUILDING REGULATIONS 2012

Ward: (All Wards) (Health & Building Services)

Disclosure of Interest: Nil

Authorised Officer: (Executive Manager Planning and Development)

KEY ISSUES

• The Building Act 2011 and Building Regulations 2012 (currently draft) come into effect on 2 April 2012.

• The new legislation separates 'technical approval' from 'Building Permit Approval' and allows private enterprise to contest the technical approval component (private certification).

• It is expected that the City's 'good reputation' in the area will see most 'residential' applications continue to come to the City for technical approval

• It is proposed to also provide certification services to the contestable area of commercial buildings - for which a fee structure is proposed.

• The new legislation also requires new delegations/authorisations which have been prepared by the City's solicitor and are appended for approval.

It is recommended that the Council endorse the approach outlined in this report and approve the proposed fee schedule and delegations/authorisations.

BACKGROUND

The Government has undertaken a Building Regulation Reform package that is planned to deliver the most significant transformation to Western Australian building legislation in over 50 years. The existing building approvals process was established by the Local Government Act of 1960, and reflects the way buildings were designed in the 1950's, relying on builders registered under the Builders' Registration Act 1939. Building policy and legislation has been fragmented between local and state government departments since then, with practitioner registration managed by individual boards. Reviews of building regulations undertaken by the former Housing and Works and Consumer Protection portfolios recommended that the legislation be updated to reflect modern building practices in Western Australia. Reviews also suggested that the legislation be managed in one place, by a single entity, and as a result the Building Commission was established.

The Building Commission was established as a division of the Department of Commerce in July 2009 and brings together building practitioner registration, building standards, complaints processes and building policy and is leading the implementation


of the Government's Building Regulation Reform package which comprises the following bills:

• The Building Services (Complaint Resolution and Administration) Act - assented 25 May 2011

• The Building Services (Registration) Act - assented 22 June 2011

• The Building Services Levy Act, and - assented 25 May 2011

• The Building Act - assented 11 July 2011.

This new legislation abolishes the Builders' Registration Board, the Painters' Registration Board, the Building Surveyors Qualifications Committee and the Building Disputes Tribunal and replaces them with a more streamlined and integrated system.

The Building Act, which has the most significant impact for Local Government was passed on 23 June 2011 and is planned to come into operation from 2nd April 2012.

The new Building Act has been developed to replace the Building Regulations 1989 and parts of the Local Government (Miscellaneous Provisions) Act 1960. The Building Act 2011 covers all buildings and the whole State of Western Australia, it introduces permit issuing authorities, enables private certification of design compliance and is designed to streamline and clarify the building process, including:

• Whole of state coverage; • All buildings to be covered, including those owned by the Crown; • Giving a clearer definition of what constitutes a building and clear exemptions from

the building permit process; • Nominating Permit Authorities - confirms local government's role in issuing building

permits, also enables State Government or special permit authorities to issue building and occupancy permits and to enforce building control;

• Enables private registered building surveyors to certify design compliance; • Introducing separate and streamlined processes for approving domestic and

commercial buildings; • Retaining the option for owners to use the current local government combined

certification and permit issuing function for all residential construction including houses and minor building work (class 1 and 10);

• Taking a risk-based approach to inspection requirements (only limited inspections specified in draft 7 of proposed regulations regarding fire safety);

• Providing a clear end-point to the construction process, and certification that the building is complete and complies with the "plans and specifications specified in the applicable certificate of design compliance" (applies to building permits only). This is from the latest draft of Form BA7 Notice of Completion.;

• Registering a wider range of industry practitioners to certify compliance; • Implementing a nationally agreed accreditation framework for building surveyors;

and • Implementing a process for the assessment and approval of building works carried

out without a building permit.

The stated objective of these reforms is intended to be a more responsive and modern building regulatory system that meets the changing needs and aspirations of all building industry participants and consumers.


These reforms are likely to have a significant impact on the operation of the Building Services Section (and to some extent the Compliance and Planning sections) of the City, however these impacts are likely to occur over a 12-24 month period.

DETAILS

The Building approval process in Western Australia is about to undergo significant change. The changes have been discussed for many years however the Building Act was passed by the Government in June 2011 and is set to commence operation on 2nd April 2012. At the present time, the Regulations supporting this Act remain in draft form and the City is advised that they are to be gazetted in time for implementation on 2 April 2012. While the Act has been discussed for a number of years and was assented to in July 2011, supplementary guidance information remains incomplete. In addition, the 'evolving' and still 'draft' nature of the Regulations (including the multitude of prescribed forms that constitute the foundation of the approval processes) combined with the multiple postponements has made it difficult to prepare for introduction of the new arrangements in a timely manner as officers are still endeavouring to understand the full implications that the Building Act will have for Local Government.

One of the key factors of the new Building Act for Local Governments is that it enables privatisation of the building certification (to the Building Codes of Australia) function that was previously provided by Local Government. It is now open to competition from the private sector which is a relatively new industry in WA, though has been established in other states for some time. It is expected however, that in a short period of time this industry will grow rapidly and will potentially have an impact on Local Government’s ability to attract and retain suitably qualified personnel to undertake its statutory responsibilities, together with some expected impact in respect to income previously generated by Building Applications as a greater percentage of these will be assessed by private certifiers.

A key question remains as to whether or not local governments will be able to compete in the open market place or whether their role would be confined to Building Permit issuance and Compliance. Indications from the Building Commission are that local authorities are indeed able to operate as a private certifier. The subsequent question of whether the City 'should' (and if it should, then to what extent) provide a private certification service remains.

On this, the 'Plan Dev Business Solutions' report (service review to 'ensure Development Services processes (including building services ...) are efficient, effective, meet community need and are aligned to the strategic direction of the City of Swan') which was commissioned by the City in 2008 commented:

'Based on the Queensland experience moving to private certification, it may take the building industry some time to respond to the changes in legislation and thus grow their businesses to be able to provide this service. Until the building industry is able to provide the service, it would certainly appear desirable in the short term for the City of Swan to continue the service and thus minimize disruption to the building industry. It is recommended that once the building industry has adapted to these changes, Swan review it's position and consider whether it continues to offer certification against the BCA once the proposed legislative changes are known'.


The Building Act establishes a different framework to the approvals process for building work than was previously provided in the Local Government (Miscellaneous Provisions) Act. The Building Commission has produced a Draft “Guide for Local Government Permit Authorities in Western Australia” which outlines the extensive changes to the approvals process as well as many other changes. .

The minimum functions that Local Governments are required to perform under the Building Act 2011 include;

• Issue prescribed permits (Permit Authority)

• Ensure building works within its district achieve statutory compliance,

• Undertake assessment and issue Certificate of Design Compliance for class 1 (single houses including alterations and additions) and 10 (sheds & patios etc)

The key change to the building approvals system is that there is no longer a requirement for a proposal within a local government district to be assessed by the local government in which the development is situated. Currently, if building work is undertaken within the City of Swan, the applicant must obtain a building licence by submitting a building licence application to the City of Swan. Under the new system, an applicant may seek the services of any qualified Building Surveyor who may be employed by the City of Swan, a Private Building Surveyor or another local government or other agency. The Building Surveyor would then issue a “Certificate of Design Compliance”, (CDC). Once the owner or builder has obtained the CDC, they then submit an application for a Building Permit that must include the CDC together with the necessary plans and specifications to the Local Government (in whose district the development is proposed) who then has 10 business days in which to issue the “Building Permit”. The diagram below provides a summary of the new process.

While Local Governments only have to provide the minimum services specified above, they may also be able to consider providing other services and be able to charge a fee to recover the cost of those services. Before doing so, local governments will need to ensure they do not breach the provisions of the Local Government Act and other legislation such as the National Competition Policy. These other services might include:

• Provide Certificate of Design Compliance, (Certification Services for all classes of buildings (not just Class 1 & 10, which is mandatory for a local authority to provide)

• Provide Certificate of Construction Compliance, (Inspection and Certification of various portions of a building during construction work that is within the scope of skills and qualifications available)

• Provide Certificate of Building Compliance, (coordinate, inspect and certify that a completed building is compliant)

Officers consider that, at least initially, the City of Swan should endeavour to maintain services to, at a minimum, an equivalent level to that currently provided, while positioning itself to be able to either extend or contract that business over time (likely over a 1-2 year period) as the development industry comes to understand the systems provided by the Building Act.


In order to do so, there are two possible options provided under the Local Government Act that may be considered which include, either the establishment of a ‘business unit’ under s3.59 of the Local Government Act or expanding the current service the local government provides, (an ‘adjusted services model’) as provided for under s 3.11 and s 3.18 of the Local Government Act.

Note: Requirements under s3.59 are mandatory if the enterprise being considered is a 'major trading undertaking', with this being prescribed as involving expenditure in excess of $ 5 million. The provision of certification services for class 2 - 9 buildings will not reach this threshold - at present expenditure is in the order of $ 150 000.00.

Accordingly it is recommended that that City proceeds with the ‘adjusted service model’ as this model requires no significant changes to the existing operational environment other than a very close assessment of actual costs associated with the operation. The certifying charge will need to very accurately reflect all costs associated with providing that service including accurately costed operating overheads. Fees for permit issue will be set by statute; however the Certification process will need to be set by Council and a proposal for this has been included in this report.

The City currently has a contractor that provides BCA assessment principally for class 2 - 9 buildings. This contractor has been utilised by the City for around 10 years and the latest contract, as approved by the Tender Review Committee establishes cost for service. Thus the technical assessment component of providing this service is clearly identifiable.

Initially, it is considered that large projects will be sought after by the private certification industry in order to be profitable though there is also evidence that some private certifiers are targeting residential buildings. Application fees for residential buildings make up 60-70 % of total building approval income, and a reduction in this area will have a significant impact on the income of the City’s Building Services section. However the City has an excellent reputation within the industry in providing a high level of service and timely approvals and will ensure that it continues. The City proposes to write to all residential builders informing of our intention to continue to provide the class of service that they currently enjoy. Regardless, the fee for Class 1 and Class 10 Building Permit Applications is regulated and it is mandatory for the City to provide an approval service for uncertified class 1 and 10 applications.

There may be little change in the first 12-24 months as the building industry gains an understanding of the new system; at some point beyond 12 months it is considered that competition will increase as new businesses (private certifiers) contest various market segments. Building Surveyors in Local Government may also be attracted to those organisations if significant salary increases are offered that local governments may not be able to compete with.

The Building Act now covers all work and provides that the Certificate of Design Compliance must be issued by a person who is not associated with the building owner. State Buildings must therefore now be certified by a building surveyor who is not employed by the state. This also means that a building development proposed by a local government will no longer be able to be certified by the local government building surveyor; the City will now need to seek this certification externally from a private certifier or other permit authority, however, local Governments will still need to issue a permit.


Inspections

Earlier drafts of the legislation contemplated a number of mandatory inspections as well as those identified by the building surveyor completing the certificate of design compliance. The current draft only lists a number of 'tests' (relating to the fire and emergency systems of a class 2 - 9 commercial building) that a certifier can require be undertaken at completion of the building though it is still unclear as to whether such tests are mandatory. It is likely that the City would require such testing to be undertaken for class 2 - 9 buildings for which it had provided the certificate of design compliance. This would be consistent with current practice. Clarification on inspections will only be available upon release of the final adopted Regulations.

Delegations

The City currently has the following delegations under the provisions of the Local Government (Miscellaneous Provisions) Act 1960:

• DA12 - Building Plans and Specifications • DA 13 - Demolition Licenses • DA 14 - Certificates of Classification • DA 15 - Building Notices - Alterations, Unlawful Works, Dangerous, Uncompleted

and Neglected Buildings • DA 16 - Building Licence - Permit Materials to be Deposited on Street • DA 17 - Appoint Authorised Persons Swimming Pool Inspections

With the full introduction of the Building Act 2011, the above delegations will become redundant in that the head of power will move from the Local Government (Miscellaneous Provisions) Act 1960 to the Building Act 2011.

Section 127 of the Building Act 2011 enables local governments to delegate any powers or duties to an employee.

Council will be requested to approve the following new delegations as provided under the following sections of the Building Act and as detailed in attachment one prepared by the City's solicitor:

• s20 – Approve or refuse a Building Permit • s21 – Approve or refuse a Demolition Permit • s58 - Issue an Occupancy Permit and a Building Approval Certificate • s65 - Consider Extending the period of duration of an Occupancy permit or a

Building Approval Certificate • s110 - Issue Building Orders • s117 - Revoke Building Orders

The proposed Delegations to Officers have been based on the City’s expectations of the skills and qualifications in order to be able to perform the required duties.

Authorisations

The City currently has one authorisation under the Local Government (Miscellaneous Provisions) Act 1960, which provides authority for its Building and Development Compliance Officers to inspect private swimming pools within the City of Swan (DA 17).


Under s.96 of the Building Act 2011, permit authorities (local governments) may also designate employees as authorised persons.

Council will be requested to approve the following new authorisations for functions as provided under the following sections of the Building Act and as detailed in attachment one (delegations) prepared by the City's solicitor:

• s100 - Entry Powers • s101 - Powers after entry for compliance • s102 - Obtaining information and documents • s103 - Use of force and assistance • s106 - Apply for an entry warrant

Note: It is acknowledged that the Delegations / Authorisations under normal circumstances would have been required to have gone to Governance Committee before being presented to Council and that this has not taken place. This has occurred due to the postponement of the implementation of the Act, and the fact that the Building Commission's guide for local authorities and the Building Regulations remaining in draft form. With the legislation due for implementation on the 2 April 2012, it is now pressing for the delegations to be formalised.

Revisions to Schedule of Fees and Charges

Many of the fees to be charged are determined in the draft legislation. These proposed fees have been published in advance by the Building Commission to assist the building industry in preparing for the implementation of the Building Act. Whilst unlikely, it is possible that the final regulations may change the fee structure and in that event further revisions to the fee schedule may be necessary.

Fees for other services have been designed to allow the City to continue to provide a full range of services. Although this may be an interim measure while a proper definition of the City’s longer term involvement in the building approvals process is developed, it is believed necessary to provide the building industry with certainty of service in the event that private providers are not immediately available.

These other proposed fees have been calculated on one or other of the following bases:

• Where the method of charging the fee is consistent with the way in which statutory fees have been set. This applies where fees charged are based on a percentage of the construction value with a set minimum

Using this method can mean that fees charged do not reflect the cost of providing the service as required by the Local Government Act 1995. Although local governments are permitted to take into account the price which could be obtained from an alternative provider, in the short term that presents difficulties until private providers start to promote their services. It is recommended that a delegated authority be put in place to allow fees for more expensive buildings to be varied to better reflect the cost of the services provided.

• Full cost recovery which takes into account not only the direct costs associated with the provision of building licensing services, but also the costs of other organisational support such as building maintenance and information technology.

The following sections of the Local Government Act have been considered;


• Section 3.18 Performing executive functions.

A local government must satisfy itself that its services do not duplicate, to an extent which is considered inappropriate, services provided by another government agency or a private provider.

• Section 6.12 Power to defer, grant discounts, waive or write off debts. A local government may waive or grant a concession in relation to any amount of money.

• Section 6.16 Imposition of fees and charges. A local government can impose fees and charges during the year.

• Section 6.17 Setting the level of fees and charges. A local government is required to consider the cost of providing the service, its importance to the community, and the price at which the service can be obtained from an alternative supplier.

• Section 6.19 Local government to give notice of fees and charges. If fees and charges are adopted at a time other than the adoption of the annual budget, local public notice of the intention to charge fees must be given.

Uncertainties

As mentioned the regulations remain in draft form as does the Building Commission's 'Local Government Authority Manual'. This has resulted in a number of matters remaining uncertain, a number of these are listed below:

• Within the last week, with regards 'uncertified applications', the requirement for 'other approvals' (e.g. cross over approvals, drainage requirements, health approvals, water corporation approvals) to be in place before lodgement of a building application was reversed. The implication of this is still under consideration.

• For development that does not require a planning approval (typically single residential development), it is unclear how planning requirements will be applied - especially in the case of applications 'certified' by a third party private certifier.

• It appears that local policies regarding for example crossover design, driveway gradient cannot be compelled under the building permit approval.

• As mentioned previously, it is unclear whether the 'inspection / testing' provisions of the Act are now constrained only to testing of commercial building emergency systems and whether these are mandatory. It is further uncertain as to what level inspections will have to be conducted, also leaving the impact on City resources unknown at this stage.

CONSULTATION

In preparation of this report extensive discussion was held with senior staff in the building services team, representatives from the state government Building Commission, members of the City's 'Commercialisation' Business Unit, the City's Solicitor and a representative from LGIS (Local Government Insurance Services).


ATTACHMENTS

• Delegations / Authorisations under Building Act 2011 and Building Regulations 2012

• Proposed Fee Schedule

STRATEGIC IMPLICATIONS

Connected Communities - Build Service Models that Anticipate Community Need - Review Relevance and Encourage Service Adaptation

STATUTORY IMPLICATIONS

Building Act 2011

Building Regulations 2012 (currently draft 7 released on Feb 29th 2012)

Local Government Act 1995

Local Government (Miscellaneous Provisions) Act 1960

FINANCIAL IMPLICATIONS

It is expected that over time, the income generated within the Building Services unit will increase relative to the level of building work conducted within the City. It is difficult to determine the staffing needs at this point given the lack of Regulations and development industry response to the new provisions and this will need to be carefully managed. It is likely, based on what has occurred in other states that have implemented similar Acts, that the number of staff within the building section may decrease compared to what has been required under the current Act. The nature of the work lost will primarily impact the City's contractor, rather than staff permanently employed.

VOTING REQUIREMENTS

Absolute Majority

RECOMMENDATION

That the Council resolve to:

1) Accept the report and its content in relation to the approach that officers will take in response to the Building Act 2011.


2) Accept that delegations detailed in the report will become redundant with the deployment of the Building Act 2011 and Building Regulations 2012.

3) Adopt the new delegations and authorisations as detailed in the attached schedule.

4) Approve the Schedule of Fees and Charges detailed in the attachment to be implemented with the deployment of the Building Act 2011 and Building Regulations 2012.

5) Publicly advertise the proposed fees and charges in 4) above in accordance with the requirements of the Local Government Act.

6) Require that City officers review the operational impact of the Building Act 2011 and Building Regulations 2012 on an ongoing basis and report back to Executive Management within six months from date of implementation.

CARRIED

4.1 implementation of the building act 2011 and … · ordinary meeting of council 21 march 2012...

Documents