02.02.2012

Compliance with Building Permits

VAGO Report findings include troubling statistics that 96% of building permits issued do not comply with minimum statutory safety and building standards

The Victorian Auditor-General’s Office handed down a controversial report in December 2011 on compliance with building permits. The VAGO’s findings include troubling statistics that 96% of building permits issued do not comply with minimum statutory safety and building standards. Amongst the findings, the VAGO found that there was inadequate information for 96 per cent of the 401 permits reviewed to demonstrate compliance with critical provisions of the Act, the regulations and the BCA. Other findings commented on

  • Deficient site plans;
  • Inadequate descriptions of site levels and floor plans;
  • Failure to obtain necessary reports and consents;
  • Inadequate documentation concerning glazing elements;
  • Absence of documentation needed to assess structural integrity;
  • Inadequate documentation of adherence with pool safety requirements.

Whilst the report clearly targetted building surveyors, these findings are equally of concern to other RBPs, especially building designers, draftspersons, and builders.

Victoria’s building industry is a significant component of the state’s economy, employing almost 7 per cent of the work force, and generating over $24 billion in domestic and commercial building work in 2010–11. The audit examined how effective the building permit system is in providing assurance that approved building works meet the required building and safety standards. Specifically, the audit examined how effectively the Building Commission regulates the activities of municipal and private building surveyors and councils to enforce compliance with building permits within their municipalities.

The audit found that the Building Commission cannot demonstrate that the building permit system is working effectively, or that building surveyors are effectively discharging their role to uphold and enforce minimum building and safety standards.

96 per cent of permits examined did not comply with minimum statutory building and safety standards. Instead, the results have revealed a system marked by confusion and inadequate practice, including lack of transparency and accountability for decisions made.

In the absence of leadership, guidance and rigorous scrutiny from the Commission, councils have adopted a largely reactive approach to enforcing the Building Act 1993 that offers little assurance of compliance within their municipalities.

Consequently, there is little assurance that surveyors are carrying out their work competently, nor that the Building Act 1993 is being complied with, nor that the risk of injury or damage to any person is being minimised.

The report details eight recommendations for the Building Commission, Councils and stakeholders as follows:
1. The Building Commission should:
a. expedite development of its moni-toring and evaluation framework and clarify the targets, standards and arrangements for assessing the building permit system’s effective-ness, and the impact of related monitoring and enforcement efforts;
b. conduct a fundamental review of the building permit system’s effectiveness to identify and resolve the longstanding and other system-wide performance issues;
c. develop guidance for building surveyors on the process for determining and documenting the value of building works and thus for accurately estimating the levy payable to the Building Commission;
d. implement controls to prevent building surveyors from using levies collected as their working capital;
e. systematically audit surveyors’ estimates of the value of building works to gain assurance they are soundly based and that it is mitigating financial losses arising from any incorrect valuations;
f. develop and implement a strategy, in consultation with the local government sector, to enable more effective coordination with councils to monitor the performance of the building permit system and of building surveyors;
g. clarify councils’ responsibilities for monitoring and enforcing the Building Act 1993 relating to private building surveyors in consultation with the Department of Planning and Community Development and relevant stakeholders.

2. Councils should review and, where relevant, strengthen their monitoring and enforcement strategies to assure:
a. they are risk based, targeted and sufficiently informed by reliable data on the performance of the local building permit system and of the surveyors operating within it;
b. that building works and associated permits comply with the Building Act 1993, the Building Regulations 2006 and the Building Code of Australia within their municipal districts.

3. The Building Commission, in consultation with stakeholders should:
a. develop standard templates and procedures to require building surveyors to adequately document their assessment approach and basis of their decisions;
b. require building surveyors to demonstrate, using these templates and procedures, their consideration and acquittal of mandatory safety and technical requirements.

4. The Building Commission should strengthen its performance audit program to assure it:
a. meets its legislative remit to provide assurance that the work carried out by a registered practitioner has been competently carried out, does not pose any risk of injury or damage to any person, and to assure that the Building Act 1993 and the Building Regulations 2006 have been complied with;
b. is informed by rigorous analysis of reliable risk-based data on the performance of building surveyors;
c. includes a clear rationale and annual targets for ongoing comprehensive technical audits of both municipal and private building surveyors performed by qualified practitioners;
d. offers reliable information on whether building surveyors operating in both the domestic and non-domestic sectors effectively discharge their obligations to enforce compliance with the Building Act 1993 and the Building Regulations 2006;
e. regularly undertakes and clearly documents reviews of both the program’s and individual audits’ effectiveness against defined quality standards.

5. The Building Commission should comprehensively assess, clearly document, and target via audit all identified major risks related to surveyors’ administration of the building permit system.

6. The Building Commission should strengthen its complaints handling and investigation processes to assure:
a. complaints are systematically prioritised according to the risk of non-compliance with safety and technical building standards, and that this is clearly documented;
b. they are governed by clear standards of effectiveness and efficiency, and that adherence to these requirements is regularly reviewed and monitored by senior management;
c. investigators receive sufficient training to enable them to form appropriate judgments about technical building matters;
d. that clear quality assurance standards and effective controls are established for technical reports sourced from the Building Commission’s external panel to assure they have been competently prepared.

7. The Building Practitioners Board should:
a. develop criteria and guidelines for evaluating the competency of applicants to be registered as building surveyors and clearly document the basis of all of its related decisions;
b. systematically verify a sample of the character declarations supplied by applicants for registration to gain reasonable assurance they are reliable.

8. The Department of Planning and Community Development, in consultation with stakeholders, should:
a. seek approval from the Minister for Planning to introduce a system of compulsory continuing professional development for building surveyors;
b. seek approval from the Minister for Planning to prepare an amendment to the Building Act 1993 to make registration renewal contingent on building surveyors satisfying minimum compulsory continuing professional development requirements.

Obviously the conclusions, findings and recommendations are a lot to consider by the Building Commission, Councils, Building Practitioners Board and other stakeholders, given the report is about 94 pages long.

Victoria’s (then) Building Commissioner, Tony Arnel, welcomed the findings of the VAGO review of Victoria’s building permit system.

“Victoria’s building control system is highly regarded nationally, and these findings will help the Commission and local councils to further strengthen it,” Mr Arnel said.

“This report reinforces the work that is already under way within the Commission and in partnership with local government to ensure that the system has Victorians’ confidence, and delivers safe and compliant buildings.”

“Major reform projects under way include a new audit program, which will see councils’ files scrutinised every two years, and streamlining of investigative processes.”

Mr Arnel said the Commission accepted the Auditor-General’s findings that there was room for improvement, and would examine the report in detail to ensure that this occurred.

“However, we believe that on any practical measure, Victoria’s building system is performing efficiently and effectively in delivering safety, liveability and sustainability.

“There is no evidence that buildings are at risk of falling down or causing sickness or injury due to the quality of the building permit system, and surveys continue to show high levels of satisfaction among building owners.”

Mr Arnel said the Victoria’s building permit system was considered progressive as it continued to regularly update and improve regulations.

“Victoria’s building permit system is performing efficiently and effectively in delivering safety, liveability and sustainability, but, of course, there is always room for improvement,” said Mr Arnel.

In commenting on the VAGO report, Caeli Lovell, Special Counsel at Lovegrove Solicitors, observed as follows:

“This review of the building permit system highlights the importance of Local Governments having specialist legal guidance when applying and interpreting the Building Act 1993. The potential for costly litigation is greatly increased by the risks of injury and damage that result from inconsistent and ad hoc practices by Councils and private building surveyors.”

“The VAGO found that key problems with the current system include a lack of transparency and accountability. There are no defined targets for monitoring its effectiveness, and the public reporting by the Building Commission offers no insight into its regulatory efforts. Six years after the Victorian Competition and Efficiency Commission found the Building Commission had not given enough priority to evaluating the effectiveness of the building control system, the VAGO has found that a basic monitoring framework is yet to be established.”

“In recent years many Local Governments have sought to reduce their role in issuing permits, which has led to a significant rise in the activities of private building surveyors across Victoria. Despite the market reforms introduced in 1993, few Councils now issue permits outside their municipal boundaries. The rise of private surveyors and a lack of effective monitoring has left the system wide open to criticism that it fails to protect the public through ensuring safety, competence and compliance with the Building Act.”

“The VAGO report found that most Victorian Councils currently have no systematic review process for permits lodged by private building surveyors. Many Local Governments are unsure of their role in dealing with private surveyors, sometimes resulting in building works that do not meet basic standards.”

“As well as the confusion about the role of private surveyors, the Auditor-General found that a lack of resources and concern about liability in enforcement actions were reasons for Councils not being more proactive in monitoring permits and inspecting associated works. Reports from residents are frequently the only source of information to Councils that result in investigations.”

“The Auditor-General has released a range of recommendations to address the current deficiencies with the system. In respect of building surveyors, these include introducing measures to evaluate the practical experience and document assessments in a consistent and structured way. The VAGO report suggests declarations that practitioners are ‘of good character’ should be investigated, and the documented procedure required by the Building Practitioners Board Registration Policy Manual needs to be retained in case of legal challenges.”

“In light of the VAGO report and the new audit program being launched by the Building Commission, Councils will need to make sure that their files are maintained to withstand the scrutiny of regular inspections. The damning findings of the Auditor-General may also lead to a renewed focus on private building surveyors, and will certainly stimulate discussions within the industry as to how the system can be fixed.”

For more information, or to access the report, CLICK HERE.