Builders ‘blindsided’ by bill to make company directors liable for defects

Michael Weaver 25 October 2019 66
Construction site

Company directors will no longer be able to shut down their companies after producing below standard work and leaving the cost of rectification to building owners. Photo: File.

The Master Builders ACT has accused the Government of introducing one of the most draconian building laws in the country after bringing a bill before the Legislative Assembly on Thursday that will make company directors personally liable for building defects.

Master Builders ACT CEO Michael Hopkins also accused the Minister for Building Quality Improvement, Gordon Ramsay, of putting politics ahead of genuine industry reform by failing to engage with key stakeholders.

“After calling for building reform for a decade, the MBA has been blindsided by the Minister who has introduced this Bill with no industry or stakeholder consultation,” Mr Hopkins said. “Failing to engage with key stakeholders on major reforms never produces optimal results.”

Mr Ramsay said company directors would no longer be able to manipulate the system by shutting down their companies after producing below standard work and leaving the cost of rectification to building owners.

“The amendments will prevent corporations from undermining the system and deliberately avoiding their regulatory obligations by winding up their company,” Mr Ramsay said.

“There have been instances where building corporations have produced substandard buildings, and when called to account, they have closed their business.”

The legislation allows rectification orders to be issued to the directors of licensed corporations that make directors liable for unpaid financial penalties.

Building owners will be further protected by new provisions that allow the publication of information on the Construction Occupations Registrar.

“These changes are important for the ACT and further support the range of building regulatory reforms already introduced by the ACT Government to improve practices across the building industry,” Mr Ramsay said.

But Mr Hopkins said the Minister had acted unilaterally to introduce a law which was not recommended by the Building Confidence Report or even contained within the ACT’s building reform program.

“It has been less than 100 days since the building ministers from every State and Territory agreed to a national approach to implement the recommendations of the Shergold Weir Report,” he said.

Mr Ramsay had earlier dismissed the report as unlikely to solve the issue of defects when he addressed the building quality inquiry at the Legislative Assembly on 4 September.

Mr Hopkins said existing laws already gave the ACT Building Regulator powers to take action against licensed builders and building companies.

“Introducing new laws will amount to nothing if the Government fails to enforce the powers they already have,” he said.

“Despite the ACT Government withdrawing from stakeholder engagement, the MBA will request an urgent meeting with the Minister so that the draft laws can be explained to the local industry.”

The MBA will also seek clarification as to whether these laws conflict with the Corporations Act or any other Commonwealth laws.

Other amendments introduced in the bill include:

  • Powers for building inspectors to direct builders and landowners in relation to non-compliant building work
  • Provisions that allow people to enter into enforceable actions to rectify work
  • Clear requirements for licensed corporations to have an effective system of management.

The Building and Construction Legislation Amendment Bill 2019 has been referred to the Standing Committee on Economic Development and Tourism, which will have to report back to the Assembly by 26 November.

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66 Responses to Builders ‘blindsided’ by bill to make company directors liable for defects
Gilavon Gilavon 10:18 pm 31 Oct 19

Some smoke and mirrors going on here where Government isn’t prosecuting when it should be. ACT building companies have a “nominated licensee”. The nominee holds the Builders Licence on behalf of the company. The company might shut down, do a phoenix, but the nominee is still there and that’s where the buck is supposed to stop when something goes wrong with the work.

Nowadays we have too many building companies run by dynasty’s, grandpa, pa and a son continues the “tradition”. They are more interested in the latest model BMW than discharging the responsibilities of being a licensee. Most of them get a Degree in construction or similar qualification and don’t have a clue of correct execution of work.

Holding the Degree allows them to walk straight into BEPCON and be issued with a Class A Builders Licence which allows them to “build” a structure of any complexity. The “builder’s” only skill is putting together a critical path timeline spreadsheet to pin to the site office wall to impress the real estate agents and the punters.

Ray Te Moananui Ray Te Moananui 7:55 pm 31 Oct 19

Monica Singh pity this was not in place 2 years ago

Robyn Van de Wetering Robyn Van de Wetering 9:19 pm 30 Oct 19

What about the building inspectors. Surely they should also be held accountable?

Barry Finch Barry Finch 7:49 pm 28 Oct 19

How about we also include dodgy authorities.

Kylie Chambers Kylie Chambers 2:24 pm 28 Oct 19

Finally !!!!!!

Paul Dwyer Paul Dwyer 8:51 am 28 Oct 19

Why would the MBA complain?? This effectively says they support poor building standards. Remove 'Master' from you title. Clearly now just a builders association.

Bernie Ryan Bernie Ryan 2:28 pm 27 Oct 19

What's the problem? You build it right the first time you got nothing to worry about.

Anne Berriman Anne Berriman 2:23 pm 27 Oct 19

I won't buy a new apartment or house here in Canberra, look at least 10 year old one at least it will stay up

Thomas Christou Thomas Christou 12:31 pm 27 Oct 19

Connor Beetson your screwed mate

Gabrielle Adaw Gabrielle Adaw 9:52 am 27 Oct 19

I don't care if the Master Builders Association is upset. I do care about the ordinary people who have, and are, saving and working hard to pay off their homes only to discover the building is unsafe and their investment nearly worthless. It's about time dodgy builders were held accountable.

Gary Pickering Gary Pickering 8:09 am 27 Oct 19

Unfortunately so few get prosecuted, just warned.

Stuart Mcpherson Stuart Mcpherson 9:18 pm 26 Oct 19

Spot on this will return the industry to the people who should have it

Stuart Mcpherson Stuart Mcpherson 9:17 pm 26 Oct 19

I e got to say this is simple and it will fix it ...

Maria Honeybone Maria Honeybone 6:47 pm 26 Oct 19

It about time

Toshak Akita Toshak Akita 4:56 pm 26 Oct 19

Good !!!!!!

Jessica Elusive Jessica Elusive 4:37 pm 26 Oct 19

Excellent idea!!

Rajat Sehgal Rajat Sehgal 4:26 pm 26 Oct 19

Harshil Sehgal Lets sue.

Tate Harris Tate Harris 3:12 pm 26 Oct 19

Peter Chamberlain Lara Morgan here it is! Game changer

Alison Kelly Alison Kelly 2:31 pm 26 Oct 19

Sam Chrzczonowicz May be of interest to you...

Brad Waters Brad Waters 12:48 pm 26 Oct 19

Perhaps if Master Builders ACT had been less negligent & more professional in its operations, as a flood of complaints were being lodged against the apparent multitude of dodgy builders who have decimated public confidence in the ACT’s industry, this legislation wouldn’t have been necessary.

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