The Australian Building Codes Board (ABCB) is keeping the construction industry waiting for answers on the newest edition of the National Construction Code (NCC).
The NCC is updated every three years based on industry research, public feedback and policy directions. The current NCC 2022 is due to be replaced this year, but ongoing uncertainty surrounding the substance and timing of the changes could have significant flow-on implications for stakeholders across the construction sector.
The Lifecycle of the NCC
New editions of the NCC have historically followed a well-established process comprised of seven distinct stages, referred to by the ABCB as the 'Lifecycle of the NCC'. The usual cycle includes:
- release of a public comment draft in the year before the new edition comes into effect;
- release of a preview of the new edition in February of the publication year. This is intended to give users time to familiarise themselves with the changes and map out the likely pricing and programming impacts, before they come into force; and
- the new edition coming into effect in May of the publication year.
This year the ABCB has shifted that timeline. A public comment draft (PCD) of the proposed NCC 2025 was released in May 2024, which provides for 17 significant amendments, including major updates to energy efficiency standards in commercial buildings, enhanced fire safety provisions for carparks and improved condensation and water management controls. A detailed summary of the amendments can be found here. In accordance with the usual NCC ‘lifecycle’, the preview was expected to be released last month. However on 7 March 2025 the ABCB published an update advising practitioners:
In past cycles, we have published a 'Preview' version of the NCC in February and a final version for commencement in May. We will not be following that pattern in 2025.
…no formal advice has yet been provided to Building Ministers and, therefore, no decision has been made about the content, publication or commencement of any future edition.
In light of the uncertainty, the ABCB has advised practitioners to continue working in accordance with the NCC version and adoption timeline currently in place in the jurisdiction relevant to their work.
Impact on change in law negotiations
We expect the biggest impact of this uncertainty for upcoming projects will be on the negotiation of change in law contractual relief mechanisms. Construction contracts often provide for adjustments to the contract sum where a change in law occurs which necessitates a change to the works or the contractor’s methods of working. This is the position under the unamended Australian Standard construction contract suite.
In principal-favouring contracts, change in law relief is typically only available where the change in law came into effect after the date of the contract and could not have been reasonably anticipated by a competent contractor. In contracts with this relief structure, a contract sum adjustment typically will not be available where an amending bill was in circulation at the date of the contract. From a principal’s perspective, the rationale is that contractors should only be entitled to relief if they were unable to accurately price and program for a change in law on ‘day 1’.
In our experience, contractors are more likely to ‘wrap’ change in law risk if there has been strong stakeholder engagement in the development of draft legislation and the content of upcoming changes to legislation is reasonably clear and well-understood. Given the lack of clarity around the content and timing for introduction of the NCC 2025, we expect contractors may request specific carve-outs to change in law provisions to allow them to recover any additional costs that arise as a result of NCC amendments (and potentially, an extension of time and delay costs for any resulting delays), despite the NCC amendments not being strictly unforeseeable.
In the meantime, contractors and developers should keep a close eye on any further updates from the ABCB as to the release of the NCC 2025.
