30 November 2023

Developer licensing bill will be good for industry and home buyers

| Ian Bushnell
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The new regime for developers should help lift standards and weed out the dodgy operators. Photo: Ian Bushnell.

The property sector may yet win concessions from the ACT Government on its proposed bill to license developers and set up an enforcement regime to protect home buyers, but the die appears cast.

The bill shows the government is determined to rein in the cowboys and go after company directors who too often move from one project to the next with impunity despite leaving behind them a trail of tears for new homeowners left with having to pay for repairs they shouldn’t have to deal with.

Buying a home is a huge investment financially and emotionally, probably the biggest of one’s life for most people.

The experience of having it all go wrong can be devastating, and too many Canberrans have been there.

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The property sector argues that the bill, particularly making developers personally liable, will have unintended consequences such as deterring investment and forcing them to take their business to less risky environments.

But it is doubtful the bill will bring the industry to its knees or drive developers out of town given the amount of housing the ACT needs and the money that can be made.

Many would say that developers have nothing to fear if they just built quality projects.

But as one builder told me, things can always go wrong and should be factored into expectations. It is how you respond that matters.

The bill aims to create an environment for better quality but also ensure that defects, when they unfortunately occur, are repaired (remember, the big issues are usually with multi-unit or townhouse projects), not ignored until after the defect period has expired or until buyers or owners corporations have had to take expensive and exhausting legal action.

Reputation matters, and developers and builders should be more concerned about establishing and maintaining that than avoiding their responsibilities.

That said, the property sector rightly pointed out the government has not brought everybody into the chain of accountability, arguing that if anyone should be licensed, it is the trades and contractors, such as waterproofers, who can operate without qualifications.

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Master Builders ACT CEO Michael Hopkins says designers and architects also need to be included.

“Unless the ACT Government is willing to implement a full framework of accountability for designers, trade contractors and supervisors, including minimum training and experience requirements, and aligned liability periods for developers and all building practitioners, then the government’s attempt to hold property developers to account will fail,” he says.

The government says it is looking at this down the track, but developers, who more often than not are not builders, can feel singled out without a whole-of-construction approach.

The MBA reasonably wants the government to commit to implementing all 24 recommendations of the Building Confidence Report before the bill passes.

If anything, the proposed regime should help weed out the dodgy operators and incentivise the industry generally to lift its game.

The property sector will keep lobbying, but change is coming, and home buyers will welcome it.

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limestonecowboy2:23 pm 02 Dec 23

Yes, the entire chain of construction should be accountable. Waterproofers all the way up to designers.
But the developers influence all aspects of a project and there are hundreds if not thousands of defective properties, mainly apartments, whose owners have been abandoned by and stonewalled by unscrupulous dodgy builder/developers. There is virtually no consumer protection for multi-storey developments and the cowboys have ripped off these people and destroyed lives, relationships and retirement plans.
They need to be made accountable.

So the only problem we have with developers is building defects (which, by the way, they are not practically responsible for) and all the other stuff (like the problems with their sales and contracts that they are DIRECTLY responsible for) gets left behind

The ACT Government is always looking at things ‘further down the track’. They have a distinct inability to do any regulatory activity in the building sector. One possible reason is that most of the building inspectors come from the local building sector and are reluctant to take any action against their mates.

While it might sound okay in principle, effective monitoring, intervention and enforcement usually fail in the building sector. Particularly when politicians get involved making claims that it is unfair for developers to follow the rules and this hinders developments, or the regulator gets too cosy with the industry.

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