This article is about legislation around renovations, design or building works to strata buildings.
Table of Contents:
- QUESTION: Can a committee demand a fixed price quote to repair concrete cancer on common property?
- QUESTION: We are replacing the carpet in common property stairwells and landings for $11,000. Do we need a building contract?
- QUESTION: What insurance and licence checks is the owners corporation legislated to make when contracting person/s such as a handyman to work on the common property?
- QUESTION: How many quotes is the strata manager required to provide for a large maintenance job?
- QUESTION: If a contractor does minor work in a townhouse, do they need insurance? The tradesperson has a licence.
- QUESTION: How does the Design and Building Practitioners Act 2020 No 7 affect remedial work in Strata buildings? What actions are we required to undertake?
- QUESTION: Should our strata plans comply with the DA conditions and concessions?
- QUESTION: What new laws came into effect in July 2021 requiring greater certification, including the involvement of an approved architect for renovations to strata lots?
Question: Can a committee demand a fixed price quote to repair concrete cancer on common property?
We require the repair of concrete cancer on common property. I have obtained a quote for $9k for 50 litres of spalling repair and $85 per litre for any extra litres required. The builder states they won’t know the exact final costs or how many litres will be required until they start digging. Is this reasonable, or should I demand a fixed price quote?
Answer: Accepting a quote with allowances and conditions such as this example is not unreasonable or uncommon, however, several factors must be considered.
Regarding remediation work where the extent cannot be reasonably determined, a fixed price can be difficult to obtain. Demanding a fixed cost from a contractor will likely result in an inflated price to cover the worst-case scenario or declining to quote.
Both of these outcomes generally do not favour owners. When you obtain a fixed cost, owners will likely be paying for work/allowances that are not used, benefiting the contractor. However, contractors will often refuse to provide a fixed cost if the extent of work is too difficult to quantify and the risk is too high.
Accepting a quote with allowances and conditions such as this example is not unreasonable or uncommon, however, it is very important that several factors are considered:
- In the first place, is the allowance the contractor has included a reasonable allowance?
- Has the contractor clearly stipulated a rate that will apply for anything that exceeds the allowance?
- Can owners easily check and validate the original allowance work and any additional work when a claim is made?
In this example, is it difficult to understand to what extent 50 ltrs covers compared to what is visible on site? This could be a generous allowance or could be already lean where additional work is inevitable.
Without an indication of coverage, for example, xx m2, or “all of south elevation”, it is difficult for owners to know whether this is value.
If this is unknown and a claim is made for an additional 50 ltrs, how will the owners check/validate –
- if the initial 50 ltr allowance was used, and
- what litres is reasonable for the additional claim?
I would recommend the owners discuss this further with the contractor to ensure a clear and measurable method is established and agreed in writing before commencement. This needs to be evidence based, not just taking the contractor’s word that they used an extra 50 ltrs. So expectations are clear, I would also recommend asking what extent the initial allowance is expected to cover. This clarity always results in a win/win. The contractor gets paid for what they have reasonably done and the owners have not overpaid.
Edwina Feilen Sedgwick E: edwina.feilen@au.sedgwick.com
This post appears in the February 2024 edition of The NSW Strata Magazine.
Question: We are replacing the carpet in common property stairwells and landings for $11,000. Do we need a building contract?
We plan to replace the carpet in common property stairwells and landings for around $11,000. Our strata manager has advised this will need a building contract, as it’s over $5,000.
Is carpet replacement defined as building works? This is the first time we’ve been asked to get a contract for this type of capital work. A previous intercom replacement in 2020 costing over $10,000 didn’t require a building contract.
Answer: Because of the contract price for replacing the carpet, in our view, the carpet replacement would require a building contract.
Based on the definition of “residential building work” set out in Schedule 1, Clause 2 of the Home Building Act, 1989 (NSW), such work expressly includes both the making of alterations or additions to a dwelling and the repairing, renovation, decoration or protective treatment of a dwelling. Therefore, because of the contract price, in our view, the carpet replacement would require a building contract.
NSW Fair Trading provides further information; Guide to home building contracts
Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440
This post appears in Strata News #677.
Question: What insurance and licence checks is the owners corporation legislated to make when contracting person/s such as a handyman to work on the common property?
Answer: There are no legislative requirements for an owners corporation to undertake insurance or licence checks for contractors being engaged to work on the common property.
There are no legislative requirements for an owners corporation to undertake insurance or licence checks for contractors being engaged to work on the common property. However, due to the risks involved, it is most prudent and in the best interests of the owners corporation that anyone working on the common property is appropriately insured and holds the required licences.
Most strata management companies these days will either engage a third party provider to ensure that all contractors are appropriately insured and licenced or undertake those compliance checks in house.
Matthew Jenkins Bannermans Lawyers E: enquiries@bannermans.com.au P: 02 9929 0226
This post appears in Strata News #662.
Question: How many quotes is the strata manager required to provide for a large maintenance job?
Our strata manager provided two quotes for a project which we rejected. We requested more quotes. After six months, the strata manager obtained new quotes from the same companies, but the quoted amount increased by nearly $3000. How many quotes is the strata manager required to provide for a large maintenance job?
Answer: For large schemes, the owners corporation must obtain at least two quotations, but only if the amount exceeds the amount prescribed in the regulations, which is currently $30,000.
For a non-large strata scheme (ie not more than 100 lots), there are no requirements for the number of quotes that must be presented to the owners corporation. For large schemes, the owners corporation must obtain at least two quotations, but only if the amount exceeds the amount prescribed in the regulations, which is currently $30,000.
Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440
This post appears in Strata News #644.
Question: If a contractor does minor work in a townhouse, do they need insurance? The tradesperson has a licence.
Answer: It is recommended owners engage contractors with insurance.
From a strata insurance perspective, it is not a requirement that tradespeople are insured as a condition of cover under the strata policy.
Likewise, the owners corporation has limited ability to enforce conditions on contractors that do work inside a lot. That is the lot owner’s decision.
Notwithstanding the above, it is recommended that owners engage contractors with insurance.
A contractor’s public liability policy covers the contractor for legal claims against them for personal injury and property damage.
This is important for anyone engaging a contractor, as it gives them recourse against the contractor’s insurance should an injury or damage event occur that the contractor is liable for. Without cover, the owner or other parties may not be in a position to receive compensation for such events.
Additionally, if the contractor causes damage to the building that results in a strata insurance claim, the strata insurer can recover against the contractor (and their insurance policy). This will have a positive impact on the building’s claims history.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in Strata News #641.
Question: How does the Design and Building Practitioners Act 2020 No 7 affect remedial work in Strata buildings? What actions are we required to undertake?
What does the Design and Building Practitioners Act 2020 No 7 mean and how does this affect remedial work in Strata buildings? We were in the process of sourcing quotes for remedial building work to common property when we were informed we need to have a design practitioner draw up and submit plans to a regulatory body prior to contractor quotes?
Answer: The Act applies to construction, alterations or additions, fit-outs and repair, renovation and protective treatment.
Yes. The Design and Building Practitioners Act 2020 applies to all building work for a class 2 building. This includes remedial work on existing builds and construction of new builds. The new legislation is aimed at protecting building owners. As such, there are extensive powers.
The Act applies to construction, alterations or additions, fit-outs and repair, renovation and protective treatment.
Some building work is exempt which I refer to below.
What does Remedial works include?
Remedial works would include:
- Professional Engineers who conduct remedial work which is professional engineering work on class 2 buildings and buildings with a class 2 part must be registered.
- A Design Practitioner is responsible for making design compliance declarations and declare that designs comply with the Building Code of Australia and other relevant standards.
- Some Design Practitioners who develop designs for remedial work on class 2 buildings and buildings with a class 2 part must provide design compliance declarations for their work. Compliance declaration requirements apply to designs prepared for a building element, or for a performance solution, for building work. They must be registered.
- Some Building Practitioners who conduct remedial building work on class 2 buildings and buildings with a class 2 part must provide building compliance declarations for their work. Compliance declaration requirements apply to this building work unless it is excluded. They also must be registered.
Exempt Work
Some building work is excluded from compliance declaration requirements.
The main exclusion is for work carried out as exempt development under the Environmental Planning and Assessment Act 1979. Practitioners do not need to provide compliance declarations for exempt development work. However, Professional Engineers do need to be registered to conduct professional engineering work on a class 2 building, even if the work is exempt development.
Compliance declaration requirements do not apply to:
- Exempt development work under the Environmental Planning and Assessment Act 1979, except waterproofing work on multiple dwellings.
- Work conducted under a council order (under section 124 of the Local Government Act), or a development control order (under Division 9.3 of the Environmental Planning and Assessment Act). However, the Act does apply to remedial cladding work conducted under these orders.
The work you have mentioned that is to be undertaken to your building requires the involvement of design practitioners who are registered and are required to provide design compliance declarations for their work. Compliance declaration requirements apply to designs prepared for a building element, or for a performance solution, for building work. It applies to your building which is a class 2 building .
Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486
What is a Class 2 Building?
Class 2 buildings are apartment buildings. They are typically multi-unit residential buildings where people live above and below each other. The NCC describes the space which would be considered the apartment as a sole-occupancy unit (SOU).
Class 2 buildings may also be single storey attached dwellings where there is a common space below. For example, two dwellings above a common basement or carpark.
See more about the National Construction Code’s Building classifications here: Building classifications.
This post appears in Strata News #456.
Question: Should our strata plans comply with the DA conditions and concessions?
Answer: If you don’t comply with the DA conditions, then the work won’t comply.
A DA (development application) approval is the basis on which the local council has approved the works at the property. If you don’t comply with those conditions then the work won’t comply, which could mean additional costs to rectify the non-complying issues or requiring the work to be redone.
If they are not happy with the DA conditions etc, there are ways to appeal that approval but there would need to seek legal advice on these options.
Michael Ferrier Eyeon Property Inspections E: michael.ferrier@eyeon.com.au P: 02 9260 5510
This post appears in the February 2022 edition of The NSW Strata Magazine.
Question: What new laws came into effect in July 2021 requiring greater certification, including the involvement of an approved architect for renovations to strata lots?
Answer: New regulations require the registration of Professional Engineers, Designers and Builders where they are completing class 2-related work
On the 1 July 2021, the Design & Building Practitioners Regulation 2021 came into force.
This new regulation, delivered by the NSW Building Commissioner; David Chandler OAM requires the registration of Professional Engineers, Designers and Builders where they are completing class 2-related work. This covers any renovations, design or building works to Strata buildings and certainly means the architect, fire system designer and builder must be registered.
The changes make steps towards individuals taking responsibility for their work on class 2 buildings and therefore deliver greater quality to property owners in Strata.
Any design or compliance documentation now needs to be uploaded to the NSW Planning Portal to ensure records are not lost as buildings are built or modified.
NSW Fair Trading provides detailed information here: Design practitioner obligations.
In addition to the above major building changes on 1 July, 2021; when producing an Annual Fire Safety Statement the owners must only select Accredited Practitioners (Fire Safety) who are listed on the register for the specific measures accredited to endorse. Here is that list: FPAS Accredited Practitioner Search. By all means look me up.
Rob Broadhead 2020 Fire Protection E: rob.broadhead@2020fire.com.au P: 1300 340 210
This post appears in the November 2021 edition of The NSW Strata Magazine.
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