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Friday, May 14, 2021
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Government push for developer licensing scheme

The ACT Government has announced a commitment to creating and implementing a licensing scheme for property developers in the ACT, putting “dodgy developers” on notice.

Building Quality and Improvement Minister, Gordon Ramsay, said the accountability for the quality of buildings in the ACT needs to be shared throughout the supply chain, with the scheme to look at what constitutes a developer for licensing purposes to ensure developers working on multi-residential developments are accountable for the quality of their builds.

“A new scheme to license developers will further this commitment and put those in the industry doing the wrong thing on notice,” Minister Ramsay said. “We have seen too many instances of property developers forcing builders to cut corners and save on costs, only to eventually wind up projects and leave owners with the bill.

“This work will make sure all involved in our building industry are accountable and working to provide Canberrans with high quality homes.”

Minister Ramsay said the Government would now undertake “extended” consultation with industry and the community to “determine the best way forward”. He said consultation would look at issues such as contracting for the sale of off-the-plan units, the practice of “phoenixing” between builders and developers (when a new company is created to continue the business of a company that has been intentionally liquidated to avoid paying its debts), and the security of payment for workers and sub-contractors.

Master Builders ACT has previously criticised the Government for not consulting with industry on previous reforms, such as new laws that would see company directors personally liable for building defects, labelling them “draconian”.

Master Builders ACT CEO Michael Hopkins said the industry was tired of being referred to as “dodgy” by Minister Ramsay, and said the revelations across the country and “failures by government building regulators to enforce building laws” have led to deterioration of confidence in the sector and government regulators.

“Continual reference to the local property and construction sector as ‘dodgy’ by our own Minister is adding to this loss of confidence,” Mr Hopkins said.

“The local building and construction sector employs around 20,000 people and comprises mostly small and family businesses. The many high quality businesses in the sector are sick and tired of hearing their Minister call them ‘dodgy’.”

He said Master Builders ACT supports the Government’s objective to deal with illegal “phoenixing”. However, he said Master Builders has called on the Government to implement reforms across the entire building supply chain, an approach he said is consistent with the Building Confidence Report, or Shergold Weir Report, released last year.

“If the ACT Government is committed to exploring a licensing system for property developers, it should conduct this investigation holistically and consider the entire building supply chain including designers, engineers, trade contractors, principal contractors and their clients,” he said.

“A holistic review of licensing should also consider training standards for new entrants to the industry which is also highlighted in the expert report as a critical element to the improvement of building quality.”

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