New laws coming to stop dodgy builders and phoenixing

 

Dodgy apartment developers who deliberately liquidate companies to rip-off buyers and contractors are being targeted­ in a state government crackdown.

Planned legal changes which will make "phoenixing" not worthwhile are expected to put some of the worst offenders out of business.

There are also plans to force, for the first time, architects and engineers to comply with the Australian Building Code, which lays down minimum safety requirements.

"If anyone may be in doubt about our government's intent to get on top of the current crisis­ facing the industry, let there be no misunderstanding," Better Regulation and Innovation­ Minister Kevin Anderson said.

"The NSW government intends to lead the nation on building reforms and ultimately deliver a framework that is considered among the best in the global construction industry."

A photo of cracking in what appears to be concrete in the Opal Tower.
A photo of cracking in what appears to be concrete in the Opal Tower.

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The reforms follow the crisis­ in confidence in the construction industry after the evacuation of the Opal Tower and Mascot Towers over cracking and other defects.

Mascot Towers Concerns
Mascot Towers Concerns

Mr Anderson said it would be the biggest shake-up to the industry in the state's history "to improve the transparency, accountability and quality of work within the sector".

The business of "phoenixing" - which strips a company of assets so it cannot be sued if anything goes wrong - is rife in Sydney's apartment building explosion.

Better Regulation and Innovation­ Minister Kevin Anderson has vowed to turn the industry around.
Better Regulation and Innovation­ Minister Kevin Anderson has vowed to turn the industry around.

The government plans legislation to "disincentivise" it and make the companies wish they had held on to the assets, a source said.

Mr Anderson said it was a "once-in-a-lifetime opportunity to transform the building and construction industry".

"Working in collaboration with everyone that has skin in the game, we can create an environment­ where future generations are confident in the quality of construction, the security of their investments and the prospect of great places to live," he said.

Visible cracks in the parking lot at Mascot Towers. Picture: Monique Harmer
Visible cracks in the parking lot at Mascot Towers. Picture: Monique Harmer

The reforms come after a government options paper released­ last year, which was designed to stamp out conflicts of interest between building certifiers and developers, went down like a lead balloon with the industry.

Proposals for a cab rank scheme, whereby a certifier would be allocated on a "next in line" basis, and a time limit scheme, requiring certifiers to take a three-year break from a client after a certain period­, were not supported. Local councils said they did not want to be responsible for building certifiers again. Sources said that the public outrage prompted by the Opal and Mascot fiascos had made it easier this time to pull the industry into line.

Premier Gladys Berejiklian­ is said to want the issue sorted by the end of the year, with the legislation to be introduced into parliament in late October or early November­.

A photo shows the damage after a broken section of concrete is removed.
A photo shows the damage after a broken section of concrete is removed.