Canberra developers to face new licensing regime

Minister for Building Quality Improvement Gordon Ramsay has confirmed the government's commitment to introducing a licensing scheme for property developers.

But exactly what conditions would be placed on developers remains up in the air, while the government cannot guarantee the scheme would be introduced before next October's ACT election.

The regime, if introduced, would make the ACT the only jurisdiction in which developers required licenses.

The announcement will be warmly welcomed by the territory's construction union, which has pushed for extra scrutiny on Canberra's property developers.

But it will face pushback from property industry groups who argue the extra regulation will drive up costs and stall developments.

It will also further flare tensions between the sector and Mr Ramsay, who are already at loggerheads over proposed new laws to make construction company directors liable for building defects.

The Canberra Times first revealed the government was examining the merits of a licensing scheme for property developers in late July, just days after ACT Labor members threw their support behind the idea at the party's annual conference.

Delegates from the Construction, Forestry, Mining and Energy Union put the proposal to the party conference, declaring that if the ACT government was genuine about tackling the problems plaguing Canberra's construction industry it needed to "start from the top".

At present, construction industry professionals including builders, electricians and surveyors all require licenses, meaning their work can be regulated.

But property developers don't face the same regulation, despite being in control of projects.

Mr Ramsay said property developers should be accountable for the quality of projects delivered under their watch.

"We have seen too many instances of property developers forcing builders to cut corners and save on costs, only to eventually wind up projects and leave owners with the bill," he said.

"This work will make sure all involved in our building industry are accountable and working to provide Canberrans with high quality homes."

Mr Ramsay said the government would conduct extensive consultation with industry and the community to develop a license model.

That would involve clarifying what type of developer would need a licence.

The construction union's preferred licence model would impose eight conditions on developers, including a requirement that they "demonstrate a capacity" to complete projects and fix defects if they arise.

Developers would be forced to publicly disclose how their project's were funded, under the union's model. They would also be barred from "engaging in pheonixing".

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Mr Ramsay said pheonixing - the practice in which a company deliberately folds in order to escape its debts, before emerging under a different name - would be among the issues examined during the consultation period.

His spokesman would not be drawn on an exact timeline for the implementation of the licensing rules.

Asked if it would be implemented before the ACT election in October, the spokesman said that was "an option", adding the process would be complex.

Property Council ACT executive director Adina Cirson questioned why the government was pursuing the reform, rather than focusing its energy on enforcing existing rules.

"What exactly is the scale of the problem they are trying to address here?" Ms Cirson said. "How many complaints are necessitating a whole licensing scheme"

"We are on the same page as the government - everyone wants to see those doing the wrong thing held accountable.

"But this is a very broad brush approach ... for a handful that might not have done the right thing. A new licencing scheme for developers won't deliver a single improvement if the government doesn't uphold its own standards."