After debate in the ACT Legislative Assembly, the Property Developers Bill 2023 has been passed as the Property Developers Act 2024 (Act).
Some sections of the Act are effective from 11 July 2024, specifically relating to Rectification Orders. The remainder of the Act, including the provisions relating to the licensing regime for developers, will come into effect on the earlier of a date to be notified, or 10 July 2026.
Certain aspects of the Act have been amended based on feedback from industry and other interested parties. However, some key issues raised by industry have not been addressed, which will have implications for developers in the future.
Rectification Orders - what has changed
Removal of retrospective application
The retrospective application of the Rectification Orders regime has been removed. The regime will now only apply to rectification orders for residential building work that has been carried out under a development application approved after 11 July 2024.
The definition of “property developer” has been retained to include property developers in the traditional sense, and also landowners and builders. However, the definition of “residential building work” has been amended to only apply to class 1 or class 2 buildings constructed as part of a project to construct 3 or more dwellings. Single dwelling or duplex developments, and aged care developments are therefore excluded, although retirement village developments and community housing are included.
Rectification orders can specify:
- Action to be taken to rectify a serious defect or possible serious defect;
- Information to be given to the Registrar; and / or
- Any other reasonably necessary thing to ensure rectification occurs.
|
EVENT
|
TIMEFRAME
|
Example
uses 2
|
|
If the Registrar becomes aware of the serious defect or possible serious defect within 6 months of the end of the 10-year period |
1 year after the Registrar becomes aware of the serious defect or possible serious defect |
|
|
If the Registrar gives a Notice before the end of the 10-year period |
1 year after the Notice is given |
|
|
In any other case |
The day the 10-year period ends |
|
Personal Liability for Directors – Exclusion for Commonwealth and State entities
Personal liability for directors of deregistered corporate property developers, and those subject to a winding up order or in administration, receivership or liquidation remains in place, but directors of Commonwealth or State entities will be excluded.
Appeals
Appeals against rectification orders will now be made to the ACT Administrative Appeals Tribunal, instead of the ACT Supreme Court as originally proposed.
Developer Licensing Regime
The developer licensing regime will not be implemented until the earlier of a date to be notified, or 10 July 2026, as the ACT Government needs to establish the necessary administrative support.
The key details of the regime remain largely unchanged, requiring individuals or entities to apply for a licence when applying for development approval for class 1 or class 2 residential building developments under the Planning Act 2023, or approval under the Building Act 2004, or when selling or advertising the sale of residential property ‘off-the-plan’ under the Civil Law (Sale of Residential Property) Act 2003.
“Suitable person”
Applicants for a licence must be a “suitable person”, and the Act now specifies that amongst other considerations, the registrar must consider whether the applicant was an executive officer of a corporation within 2 years before it was placed into administration, receivership or liquidation.
Rating Report
The Act has extended the meaning of a rating report that must be submitted with a developer licence application. This may include a rating report prepared by a rating agency (eg I-Cert), or any other report prescribed by regulation. Additional information such as whether a community housing provider is a regulated community housing provider may also be considered. These details will hopefully be clarified once regulations supporting the Act are published.
Who administers the licensing regime
The registrar administering the regime will be the ACT Construction Occupations Registrar.
Licensed Property Developer Register
The Licensed Property Developer Register will include a director identification number under the Corporations Act 2001, and may note whether the licensee is a regulated community housing provider.
The details in the Register will be made public unless the Registrar is satisfied that the publication of the information would or could reasonably be expected to endanger the life or physical safety of a person, or jeopardise national security.
Where to from here
The rectification notices regime will apply to those class 1 or class 2 buildings constructed as part of a project to construct 3 or more dwellings which received development approval under the Planning Act 2023 after 11 July 2024. The full effects of this regime may be seen over time, as applications for rectification orders are made for ongoing or completed residential building work.
Further updates will be provided once details regarding the implementation of the licensing regime are published.
