All states in Australia, and across most of the common law world, ensure the registration of building practitioners.
relevant regulatory authorities have required it be established, broadly speaking, that the person applying to be registered, be a ‘fit and proper person’ to be eligible.
Recently, however, in Victoria, some changes to the old paradigm have occurred. Other states may well follow, but they may well choose to see how the changes are proceeding in the Victoria before deciding whether to implement the changes themselves.
What has occurred in Victoria is that a company can now apply to become the registered building practitioner (meaning registered building companies and registered building surveyor companies). This is required if the company is to do major domestic building works – works with the dollar value above $10,000.
Previously, only individuals were allowed to be the registered builder on the job, and the individual registered had to be the building company’s director. The same applies for a building surveyor company in that it must be registered/incorporated to accept appointment for such a job.
Not being registered in the appropriate category whilst doing domestic building work means that you commit an offence and you can be subject to a fine or other type of disciplinary action. It can also lead to trouble for an applicant that represents to the public that it is registered when in fact it is not. Whatever type of building registration is applied for, insurance must be in place already as you commence the work. And the company makes an application to the VBA for registration by utilising the appropriate application form.
The changes came into effect as of 1 July 2018, so they are certainly recent. It means that, as is common, the building company wishes to be named as the contracting entity in the contract and/or the building permit. To take advantage of the resultant limited liability of the building company director, the company has to be registered as a building company.
When or if a company does seek such registration, it can be registered as a builder in all of the classes that the director of the company is registered in. But note that the company cannot be registered in a class if none of its builder directors are registered in the class.
When an application is made for registration, the relevant authority (in Victoria, it’s the Victorian Building Authority) conducts checks on all of the directors of the proposed registrant company. These checks have been dubbed ‘personal and financial probity checks’ to ensure, as far as possible, that the applicant director is conducting the relevant business with propriety, honesty and integrity. The issue of insurance is also considered herein that the regulatory authority seeks to be satisfied that the applicant company has the required insurance in place.
These probity checks will determine whether or not any disciplinary action has been taken against the applicant in the past, whether or not any false information has been provided in the application, whether there has been a past refusal of insurance, and whether any other reason exists for refusal of company practitioner registration.
Finally, things considered here include any unsatisfactory reference checks conducted, whether there have been convictions for offences in the past committed by the applicant director, and any non-disclosure as to any of the matters described here. Every director of the applicant company is considered in the checks.
If the director applicant is already registered as an individual him or herself, then it is presumed the director has the skills, qualifications and experience to be a registered builder and so checks on these things are not for this purpose, conducted. The focus here is on the broad but therefore to some extent an unhelpful question of a fit and proper person or entity for the registration. A refusal can trigger appeal right in the applicant.
Finally, an interstate registered company can apply for such registration in Victoria, as long as at least one of the directors of that company is registered as a building practitioner in Victoria.
It will be in time obviously as to what if any effect the changes outlined here have a material effect on the system of building practitioner registration in Victoria and whether any other States implement such a system.
*This article was written by Paul Cott from Law on Lydiard and was first published on Sourceable on the 4th October 2018 and granted permission to republish by Paul Cott*
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practising lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Legally Yours Pty Ltd accepts or assumes responsibility, or has any liability, to any person in respect of this article.