CEO’s Speech – UDIA TV with David Chandler OAM

This speech was presented by UDIA NSW CEO Steve Mann on 8 July 2020 at the UDIA TV event with guest presenter David Chandler. You can view this episode “On-Demand” here.

Watch the full speech from Steve Mann here:

 

 

Last year following the construction issues at Opal Tower in December 2018, I felt an obligation for UDIA NSW to step-up and take responsibility for the industry, following the staggering drop in consumer confidence for apartment construction.

UDIA has sought to work closely with the Minister for Fair Trading and the Building Commissioner over the last 12 months. Recognising the importance of this issue UDIA Council established an Advisory Panel focussed on building regulation independently chaired by Barry Mann and the members are:

  • Co-Chair – Councillor Brendan Maier
  • Mark Monk – HELM Properties
  • Troy Abolakian – Hyecorp
  • Chris Kelly – Billbergia
  • Tom Catalovski – Aqualand
  • Margaret MacDonald – Stockland
  • Marie Doyle – Fiducia
  • Iwan Sunito – Crown Group
  • David Ferguson – Strata Plus
  • Graham Cooper – Mirvac
  • Peter Welsh – Fraser Properties
  • Pierre Wakim – KPMG
  • Neil Arckless – Lend Lease; and
  • Cameron Johnson – Sun Properties

The Advisory Panel has met half a dozen times as the Legislation was developed and now as part of the Building Commissioners six pillar working groups. I want to thank these members for rising to the challenge to support our industry.

For the duration of this “crisis in confidence” I have remained consistent with the objectives:

  1. To ensure buildings are safe for occupation.
  2. To provide a clear avenue to resolve and manage defects as they occur; and
  3. To ensure the sustainability of our industry and affordability for consumers.

Twice I appeared in front of the Parliamentary Inquiry chaired by David Shoebridge. When I presented to the Public Accountability Committee on 5 November last year, I said:

“It is undeniable, there is a crisis in confidence in the building and construction sector. There is a real risk that this crisis in confidence spreads across the NSW economy, leading to substantial job losses. The construction sector is the third largest employer in NSW. Urgent action is required from government to work with industry to resolve this crisis and restore confidence in our built environment.”

Over the past few months managing the impacts of coronavirus has highlighted that confidence in our industry is essential to economic recovery in NSW. That is why we have continued to provide considered advice and represent the industry throughout the Building Regulations reform roll-out.

There were some big risks that I saw to the industry from these changes:

  1. Many small and medium, but high-quality, developers will be squeezed from the market. With two thirds of the industry made up of small-to-medium developers this segment is critical. Reform must be manageable for all quality developers and practitioners in the market, irrespective of size.
  2. Mounting hurdles to secure off-the-plan sales is creating financing challenges for developers.
  3. Design and construct contracts need improved transparency; and
  4. The use of special purpose vehicles by the development sector will be challenged. SPVs are critical to securing financing and managing projects and are being retained.

David Chandler, the Building Commissioner, has been receptive and where possible collaborative with the approach. There is a shared objective to make sure buildings are safe for occupation and defects are minimised and managed efficiently. We have recently seen the passage of the Design and Building Practitioners Bill, and Residential Apartment Buildings (Compliance and Enforcement) Bill through Parliament.

I will leave it to David to speak to the specifics; however, the process of doing business for developers will evolve and the level of responsibility will become greater. We have, sensibly, avoided the path of licencing developers and some other extremes – but there will be much greater regulatory responsibility and developers need to focus on this throughout their supply and delivery teams.

One thing I will highlight is the Residential Apartments Building (Compliance and Enforcement) Act applies to all buildings completed within the past ten years. What that means for developers and owners will require clarity.

The other aspect that I want to highlight is that on commencement of the legislation, buildings under construction will have 14 days after commencement to notify the Building Commissioner of their intent to apply for an occupation certificate within 6 months. That is a vital window to be aware of, and there is a lot of work the Commissioner is progressing with his team and with industry to be ready for commencement on 1 September.

It will be critical that we continue to work closely with the Commissioner and Minister to ensure that as the legislation is operationalised successfully and that we are able to manage these risks. I currently sit on the ConstructNSW Steering Co which is the Minister’s Consultative vehicle for developing and monitoring the implementation of the program. UDIA has representatives on all of the relevant Commissioner’s working groups to also advise on the implementation of the program.

 

 

 

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