Proposed reforms to Queensland's building and construction industry - Construction & Planning

The Queensland Government is hosting public consultations and inviting submissions on 10 proposed areas of reform to the building and construction industry.

The proposals are outlined in the Queensland Building Plan discussion paper and supporting fact sheets released by the Department of Housing and Public Works.

The key areas of reform are to:

Queensland's security of payment regime;
builders' licensing requirements; and
the QBCC's powers to regulate non-conforming building products (NCBPs).

Industry participants interested in attending consultations or making a submission can find further details on the Queensland Building Plan website.

SECURITY OF PAYMENT REFORM

The discussion paper canvasses the following reforms:

implementing Project Bank Accounts (PBAs) – our previous article considers the practical implications of a PBA scheme;
amending the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA);
amending the Subcontractors' Charges Act 1974 (Qld) (SCA) to update the language used in the Act; and
combining the security of payment legislation into one Act.

Changes to BCIPA

In our previous article, we considered the detail of the key amendments proposed to BCIPA.

Additional amendments being considered are:

closing a 'loophole' so as to allow claimants to use BCIPA if a contract is terminated for convenience (and is silent as to payments that survive termination). In those circumstances, the reference date will be the date the contract was terminated. This will allow claimants to claim for work undertaken up to the point of termination;
allowing adjudicators to order claimants be reimbursed by respondents for the whole or part of the cost of application fees; and
providing adjudicators with the discretion to order respondents pay interest on the claimed amounts (backdated from the date of the payment claim).

Combined security of payment legislation

The discussion paper notes that the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), BCIPA and the SCA each provide mechanisms for securing payments to subcontractors. The proposal is to create one piece of security of payment legislation which contains the provisions of BCIPA and the SCA, in addition to the legislative provisions regarding PBAs.

No further details concerning the proposed combined legislation have been released. It's not yet clear whether the Government intends to merge the BCIPA and SCA provisions into the existing QBCC Act or create an entirely new Act.

Whether more substantive amendments to the SCA (rather than merely updating its language) are necessary is another issue being considered.

LICENSING REFORM

The proposed reforms include:

implementing a mutual recognition scheme through which New South Wales licensees holding specific classes of licences would not be required to obtain a QBCC licence of the same class (subject to them registering as 'working in Queensland' and meeting the requirements of the Queensland Home Warranty Scheme);
increasing the licensed work threshold from $3,300 to $5,000 (to align with other states and territories);
introducing a single mechanical services licence in line with Victoria and Tasmania (presently, work associated with mechanically heating, cooling and ventilating residential and commercial buildings is covered by various licence classes);
consolidating the QBCC's licensing investigation powers into a central reference point (the QBCC Act); and
extending the QBCC's powers to assess Type A domestic gas work licence applications and regulate gas work.

NON-CONFORMING BUILDING PRODUCTS REFORM

NCBPs are products that contain false claims as to their quality and purpose or do not meet the required standards for their intended use.

The discussion paper notes the existence of several deficiencies in the QBCC's powers to regulate NCBPs. For example, presently the QBCC can inspect building work on an 'active building site' but requires the owner's permission to inspect a building once construction is complete.

The Government's proposal involves extending the QBCC's powers to ensure that it can:

audit and investigate buildings that are not active building sites;
enter and take samples of a building product for testing;
require parties to produce information about alleged NCBPs;
declare a building or building site unsafe;
direct rectifications of an unsafe building or site;
prosecute offences relating to supplying or installing a NCBP; and
apply to charge a cost recovery fee for any evidence gathering and testing of proven NCBPs.

These extended powers may lead to increased project costs (and delays) due to the additional measures necessary to comply with any directions by the QBCC. According to the discussion paper, these additional costs will likely be borne by building practitioners and developers (noting that they may well be passed through to consumers/principals).

WHAT HAPPENS NEXT?

The Queensland Government will review feedback at the end of the consultation period (31 March 2017) and release a consultation report.

The final Queensland Building Plan will be presented in the second half of 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.