'I'm sceptical': proposed developer licensing laws met with caution

But there was hope, according to one expert, that the long-awaited laws could create meaningful change in the way developers structure their companies.

Sustainable Building and Construction Minister Rebecca Vassarotti introduced the bill to establish the licensing scheme to the Legislative Assembly on Thursday.

The proposed legislation would require property developers in the ACT to hold a licence for the first time and would set up a public register of licensed developers.

Builders and property developers would also be considered liable for building defects for the first two years after a building is occupied, unless they can prove otherwise.

This would not affect the existing statutory warranty, which covers work on residential buildings for six years for structural elements and two years for non-structural elements. After the first two years however, the onus would fall on the property owner to bring claims for defects against the developer or builder.

Ms Vassarotti said "dodgy development choices by big businesses" were costing Canberrans more than $50 million each year.

"This law change will add property developers to the chain of accountability for building quality and safety," she said.

Following the announcement, there was a degree of scepticism from Canberra home owners who have dealt with building issues.

Vikas Nayak is a resident and owner at Geocon's Infinity apartment complex in Gungahlin. He said there had been several building issues at the complex since it was completed in about 2018, including multiple flooding incidents.

Mr Nayak, who is an engineer, previously served on the building's executive committee but said it was becoming a strain on his life.

"My wife ... made it very clear to me that it was definitely taking a toll on the family and not to run for the executive committee again," he said.

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The committee had had positive dealings with the ACT government's building and compliance team, but Mr Nayak believed they were under-equipped to enforce orders under the existing Construction Occupations (Licensing) Act (COLA).

"My concern would be, this legislation that's proposed, is it actually going to go to a regulator that's funded appropriately to actually make it happen?" he said.

"I'm sceptical because of what I see with COLA," he said.

Christopher Kerin, principal of Kerin Benson Lawyers and a specialist in ACT strata law, said he had reservations about the scheme given the delays in implementing similar programs.

The ACT government introduced a new residential building dispute resolution scheme in 2020 via an amendment to the Building Act 2004.

Despite it commencing in June 2022, a residential building dispute administrator had not yet been appointed to oversee the scheme.

A spokesperson for Ms Vassarotti's office said "options to operationalise the residential dispute administrator are currently being developed".

Mr Kerin questioned what would be different in the case of developer licensing.

"It's all very nice putting in place legislation but you've actually got to set up a body to administer it," he said.

The two-year defect liability period was of particular concern to Deniss Cirulis, an owner at the Belle Apartments in Bruce.

Owners spent years urging the ACT government to enforce a rectification order against the developer-builder of the complex, Victory Homes.

Mr Cirulis said building defects can emerge many years down the track.

"If it was two years, we would have never picked up the issues that were picked up," he said.

While he welcomed the government's move to protect homeowners, Mr Cirulis said there should be no time limit on how long developers are liable for their mistakes.

"There should be a time [limit] on warranty of workmanship, but there shouldn't be a time [limit] on not doing something to the [building] code," he said.

"If something is defective and against the code, it should be a lifetime guarantee."

Mr Kerin said it was common for developers to use special purpose vehicles - separate companies with their own assets - for each new development, then deregister those companies years later, which limits legal recourse.

"Getting the developer to be responsible and liable and having enforceable rights against the developer where you're actually getting something at the end has always been problematic in the ACT," he said.

Requiring developers to hold a license could change this approach, Mr Kerin said.

"All of a sudden they're coming under this huge regime where the government has a lot of oversight in terms of what they're doing, who's doing it, when they're doing it, who's qualified, all these sorts of things," he said.

The proposed legislation states a developer's license can be suspended if the licensee becomes bankrupt or personally insolvent or if the licensee for a corporation becomes the subject of a winding-up order or has a controller or administrator appointed.

Mr Cirulis said he was confident the legislation could help, so long as it was executed well.

"Ultimately, no one should be going through what unit owners are going through in terms of fighting builders for repairs or accountability," he said.

"If it does protect the people, that's great."