In November last year, the Government passed the first in what is likely to become a series of legislative reforms affecting the building and construction industry.
Queensland Building and Construction Commission
The first change was a change of name of the Queensland Building Services Authority (QBSA) to the Queensland Building and Construction Commission (QBCC). Its responsibilities, as extracted from its new website, are as follows:
- To implement the Government’s 10 Point Action Plan for the building industry; Decide the strategies and operational, administrative and financial policies of the Commission;
- Ensure the performance of its functions in a proper, effective and efficient way;
- Provide guidance and leadership to the Commissioner and Commission staff;
- Establish Key Performance Measures with the Commissioner;
- Provide advice to the Minister;
- Consult with the building industry and consumers.
Essentially, the QBCC will perform the same functions as its predecessor, the QBSA, however, it will have a greater focus on licensing, certification, dispute avoidance and management, as outlined in the 10 Point Action Plan. The Queensland Building Services Authority Act has also changed names and is now known as Queensland Building and Construction Commission Act (QBCCA).
Changes to Licensing Requirements
The second change eases the regulatory burden for some engaged in commercial development or building work. This change is effected by a change to section 42 of the QBCCA and inclusion of a new Schedule 1A to the Act. Section 42 requires anyone who carries out, or undertakes to carry out, building work to have a licence of the appropriate class. Schedule 1A provides some exemptions to this rule.
The new exemptions apply to the following:
- A person who enters into a contract to carry out building work, provided that the work is not residential construction work or domestic building work, and the work is to be carried out by a person who is licensed to carry out building work of the relevant class. This exemption applies even if the person “directly or indirectly causes the building work to be carried out” by an appropriately licensed contractor or “enters into another contract” with an appropriately licensed contractor to carry out the work. However, if the person causes or allows any of the building work to be carried out by a person who is not appropriately licensed to carry out the building work, then the exemption will cease to apply.
- An unlicensed person who submits a tender to carry out building work provided that the work is not residential construction work or domestic building work and the actual work is to be carried out by a person who is licensed to carry out building work of the relevant class.
- A “special purpose vehicle” that undertakes to carry out building work under a “public-private partnership” provided that the actual work is to be carried out by a person who is licensed to carry out building work of the relevant class. This exemption applies even if the special purpose vehicle “directly or indirectly causes the building work to be carried out” by an appropriately licensed contractor, or “enters into a contract with” an appropriately licensed contractor to carry out the work. Again, if the special purpose vehicle causes or allows any of the building work to be carried out by a person who is not appropriately licensed to carry out the building work, then the exemption will cease to apply.The term “special purpose vehicle” means an entity established for the purpose of carrying out a public-private partnership and declared by the Treasurer by gazette notice to be a special purpose vehicle for the purposes of the QBCC Act.A “public-private partnership” is an dgfev online casino arrangement between the State, Commonwealth or a local government (or any of their authorities or agencies) and one or more private sector entities with the purpose of financing, designing, constructing, maintaining or operating public infrastructure.
- An unlicensed person who undertakes to carry out building work for a prescribed government project by:
- Entering into a contract with the government entity to carry out building work for the project;
- Submitting a tender to a government entity to carry out building work for the project; or
- Making an offer to a government entity to carry out building work for the project,
provided that the work is of a class prescribed under regulation for the prescribed government project and is to be carried out by a person who is licensed to carry out building work of the relevant class. This exemption applies even if the person “directly or indirectly causes the building work to be carried out” by an appropriately licensed contractor or “enters into another contract with” an appropriately licensed contractor to carry out the work. However, if the person causes or allows any of the building work to be carried out by a person who is not appropriately licensed to carry out the building work, then the exemption will cease to apply.
The term “prescribed government project” means a project, prescribed under Regulation, involving building work to be carried out for, or on behalf of, a government entity and by one or more private sector entities.
What Does This Mean?
Previously, developers or head contractors were required to be licensed even if they had or intended to contract another party to complete commercial building work. This is no longer necessary, provided that the developer contracts with an appropriately licensed building contractor to carry out the building work.
It is important to note that any work that requires a licence cannot be performed by someone who does not hold the appropriate licence and that the exemption does not apply to residential construction work or domestic building work. The work the developer could not personally complete themselves includes administration, advisory, management and supervisory services for building work, which means that the developer could not (for example) coordinate and manage trades. The exemption only allows the developer to enter into the contract without the licence, otherwise, the law regarding licensing remains the same.
Retention Amounts
Finally, sections 67K and 67L of the former QBSA Act provided total value of retentions under building contracts which are not subcontracts (s 67K) and building contracts that are subcontracts (s 67L) must not be more than 5% of the contract price. The difference between the two sections is that it is possible to contract out of section 67K but it is not possible to contract out of section 67L. That is, you cannot contract out of the limit on retention amounts under a subcontract.
These two sections have now been changed so that section 67L does not apply to a subcontract if the contracting party is a “special purpose vehicle” (see the definition above). In other words, a special purpose vehicle will be able to contract out of the limit on retentions even under a subcontract. These changes only affect special purpose vehicles.
From Here
The Government considers the building industry to be one of the four pillars to build a strong economy for our State. The licensing changes will ease in part the regulatory burden for developers involved in commercial construction.
For those in the industry, however, it is certainly a case of ‘watch this space’. It is likely that these changes will be only the start to the Government’s review of the building industry. We can expect more regulatory and legislative changes affecting the industry in the coming months, as the Government continues their review and seeks to implement their “10 Point Action Plan” and the newly established Queensland Building and Construction Commission finds its feet.
