The ACT Legislative Assembly voted this week to establish a new Property Developers Act to hold developers to account for dodgy residential developments. However, Master Builders ACT warns that rushing ahead on developer licencing would deter investment and affect housing targets.

Rebecca Vassarotti, ACT Minister for Sustainable Building and Construction, introduced a bill in November for Australia’s first licencing and regulation scheme for property developers. It would establish a Property Developer Registrar to take regulatory action against developers for defects and compliance failures in residential property developments.

Since then, the ACT Government has amended the Property Developers Bill, based on feedback from stakeholders and recommendations from an Assembly Committee Inquiry. This includes allowing for an appropriate transition for developers to get a licence and prepare for the new regulatory regime. They have also excluded approved aged care providers, given Commonwealth legislation oversees them.

Ms Vassarotti said the Property Developers Bill and changes to residential building work insurance settings would improve both consumer protections and confidence in the residential building sector.

“When Canberrans buy or rent a home, they should be able to demand the best from those who built them,” Ms Vassarotti said.

“Way too often over recent years, high profile cases of poor development have undermined the trust of Canberrans in the home building industry, and defined the anxieties of an entire generation of homeowners and renters alike.

“Dodgy development choices by big businesses are estimated to have cost Canberrans more than $50 million each year. It’s time this is put to an end. 

“Under these new laws, property developers will now need to apply for a license before they can even lay a brick on any new developments in Canberra.

“They will also be held personally liable if they don’t fix defects in homes they have built. This will keep developers accountable and remove any incentive for them to put pressure on builders, tradies or certifiers to undertake or sign off dodgy work.

“Canberrans have made it clear that they are fed up with the quality of developments in this city. It’s up to every single member of this parliament to make sure they reflect that by voting in favour of this bill.

“Put plain and simple, this Bill will protect Canberrans when they make the most significant purchase of their life. It will give Canberrans greater control and confidence that the property developer behind their new home has capability to deliver a quality product.

“Our cost-benefit analysis has explicitly demonstrated that property developer licensing will save the Canberrans’ hard-earned money by reducing the risk of defects after construction.

“Coming towards the end of my first term as Minister for Sustainable Building & Construction, I am immensely proud of the work we have achieved in building regulation.

“In this term, I have introduced a new engineers registration scheme, improved registration rules for architects (who already need to be registered), and will be announcing a path forward to strengthen certification before the end of this term.

“In addition, we are also increasing the minimum residential building work insurance amount from $85,000 to $200,000 and the time limit to lodge a claim from 90 days to 180 days. This is another important step to improving protections for people when they are having their homes built.”

Michael Pettersson MLA

ACT Labor backbencher Michael Pettersson MLA welcomed the establishment of Australia’s first property developer licencing scheme.

“Too many Canberrans have had their hopes and dreams dashed by dodgy property developers,” Mr Pettersson said. “Whether it’s at the beginning of a project, in the middle of construction, or after completion, these cowboys have ripped off Canberrans without consequence.

“Throughout this term of government, I have advocated fiercely to ensure that property developer licensing was legislated. In November 2022, I stated my intentions to introduce a private members’ bill to establish property developer licensing if the Minister was not going to legislate before the end of the parliamentary term. Following my motion in May 2023, which committed the Minister to introduce the Bill by the end of 2023, today we have been able to finally vote for this long overdue reform.

“It should go without saying that the ACT Government should do everything in its power to stop shonky property developers from selling Canberrans lemons. The establishment of property developer licensing today is a step in the right direction to renew consumer confidence in property development.”

Master Builders ACT

Master Builders ACT CEO Michael Hopkins said: “Master Builders ACT has long supported a building regulatory system that holds all building practitioners to account for their role in the building process.

“It is disappointing that the ACT Government has chosen to go-it-alone on property developers’ regulation, rather than implement the 24 expert recommendations from the Building Confidence Report that every State and Territory Government commissioned in 2018.

“The Property Developers Bill has been passed at a time when the construction industry is struggling to keep up with regulation introduced by Government. The MBA has warned the ACT Government that continuing to implement reform at this pace is likely deter investment, making it harder for the ACT to achieve its National Housing Accord targets and provide affordable housing for the ACT community.

“The Regulatory Impact Statement prepared by the Government has failed to properly address these potential impacts.

“This legislation will not only impact the big end of town but will also create significant responsibilities for small developers, who are often builders or creating projects and new homes through their superannuation fund.

“This legislation sets up a regime which is inconsistent with existing building regulation, creating a nightmare of complexity for anyone trying to navigate the law to seek rectification of building defects. This will likely lead to more litigation between apartment owners, builders and developers. Government should have taken more time to work through these issues rather than rushing to pass the legislation before the October election.

“Master Builders ACT encourages the Government to have an extended transition period and undertake comprehensive industry engagement and training on this new regime. Government must use the time between when this legislation is passed and when it starts, to road test the regulations and ensure there are no unintended consequences.

“Master Builders ACT hopes to use the period from now to the commencement of these new laws to work coöperatively with Government on their implementation.”

For more information, visit the ACT Planning website.