[+] ACT Urged to Hurry Slowly on Australia’s First Developer Laws

Developers who fall foul of proposed new licensing laws in the ACT could be personally liable for millions of dollars in defects, including work completed by third-party subcontractors. Despite the best intentions of the Australian-first Bill, which would require developers to hold a license for the first time, some industry insiders say the proposal needs fine-tuning. The ACT Government announced the Property Developers Bill 2023 in November with the goal of introducing more transparency and greater consumer protection to the sector. Sustainable building and construction minister Rebecca Vassarotti—the ACT Greens’ first deputy leader—said delivering the country’s only licensing and regulation scheme for developers would tackle defects and compliance failures before, during and after a property’s construction. The Government estimates that “dodgy development choices” currently cost Canberrans more than $50 million each year with the figure rising as construction expenses soar. “ When Canberrans buy or rent a home, they should be able to demand the best from those who built them,” Vassarotti said at the time. “ This Australian-first move aims to give Canberrans the confidence that their homes will be built to the highest standards by trustworthy professionals. To put it simply, it ’ s all about quality.” Property Council of Australia ACT executive director Shane Martin said that although the group doesn’t dispute the need for greater consumer protection, the draft Bill is creating ripples throughout the construction sector. “The property council has been calling for a lift in building quality when it comes to residential apartments,” he says. “We’ve also been calling for an increase in developer transparency and consumer protection. ▲ ACT sustainable building and construction minister Rebecca Vassarotti. “To be absolutely clear, the PCA does not oppose developer licensing. What we’ve been vocal about is what’s contained within this legislation. “The Government does have a noble goal here but in order to catch the 1 per cent of developers doing something wrong, they’re affecting the other 99 per cent who are doing high-quality builds and it’s making it even harder for them.” Martin says that the consequences contained within the draft Bill are unprecedented and is calling for the Government to review the language around personal liability. “As it currently stands it actively creates a liability for things that developers don’t necessarily directly control such as the performance of subcontractors,” he says. “When we ’ re talking about personal liability, we’re talking about a situation which could be worth many millions of dollars not attached to a company, but to an individual director or a person—including mum-and-dad investors.” In its quest to protect the end consumer during a housing crisis, Martin says the Government has created a scenario where developers may reconsider breaking ground in the capital. “We’re trying to make Canberra an attractive destination for residential investment and development,” he says. “We already have unique systems in planning like a leasehold system, unit titling and lease variation charges, which other states and territories don ’ t have ... now we also have this. “The problem is that big multinational or interstate developers looking at investments are going to make decisions based on risk. “Clearly, if they’re weighing up the risks between another state and the ACT then somewhere else might look the better option.” ▲ Property Council of Australia ACT executive director Shane Martin. The Urban Developer contacted several developers currently active in the ACT market for this storey—none were willing to discuss the Bill on record. A spokesperson from the Environment, Planning and Sustainable Development Directorate said the proposed Bill had been received “positively by key stakeholders”, including those representing people living in apartment buildings. “The ACT Government is continuing to provide information and seek feedback from building and construction industry representatives regarding the development of the Bill ’ s subordinate legislation—including the Bill ’ s regulations—which will guide the day-to-day operation of the licensing and regulation scheme,” the spokesperson said. They said that the Government was working closely with industry to develop a code of practice for property developers. The Bill is expected to be debated in June, with the wider Australian construction industry looking on to see if it could become a national blueprint. “The ACT Government supports a nationally consistent approach to regulation of the building and construction industry where it is appropriate for each jurisdiction,” the spokesperson said. However, Martin says being first shouldn’t be a priority. “I think we need more time to look at serious changes in this legislation,” he says. “We realise this is an election commitment and government wants to lock this in before our next election in October. “But it will take time to figure this out. I think rather than the ACT trying to be the first in this space, we should focus on being the best.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] ACT Urged to Hurry Slowly on Australia’s First Developer Laws

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