A defect claim in a new apartment building rarely begins with a single faulty item. It usually begins with an unanswered question: who designed, approved, built or coordinated the work that has failed? The Design and Building Practitioners Act changes how that question is approached in NSW. It imposes registration and declaration obligations in prescribed work, while creating a statutory duty of care that can give owners meaningful recourse for economic loss caused by defective construction.

For developers, builders, design professionals and strata stakeholders, the Act is not merely a compliance exercise completed before occupation. It affects contracting, project records, risk allocation, insurance considerations and the evidence available if a dispute reaches NCAT or the courts. The practical issue is not simply whether the project was approved. It is whether the people carrying out the work can demonstrate compliance with the statutory framework and the applicable standard of care.

What the Design and Building Practitioners Act does

The Design and Building Practitioners Act 2020 (NSW) was introduced as part of a broader response to serious building defects, particularly in residential apartment construction. Its framework is supported by the Design and Building Practitioners Regulation 2021 and operates alongside the Environmental Planning and Assessment regime, the Building Code of Australia, the Home Building Act 1989 (NSW) and other legal obligations.

At its core, the Act has two significant functions. First, it regulates particular practitioners and building work through registration, regulated designs and compliance declarations. Secondly, it imposes a statutory duty of care on persons carrying out construction work to avoid economic loss caused by defects.

The scheme is particularly relevant to class 2 buildings and mixed-use buildings containing class 2 components. Whether a project, alteration or remedial works fall within the detailed regulatory regime depends on its nature, timing and the provisions of the Regulation. That assessment should be made early. Assumptions based on a project’s label, such as “commercial” or “remedial”, can be costly if the actual building classification and proposed works indicate otherwise.

Registration, designs and declarations

Where the declaration regime applies, the legislation seeks to create a clear line of accountability from design through to construction. Registered design practitioners prepare regulated designs and provide design compliance declarations. Registered building practitioners provide building compliance declarations in relation to building work. A principal design practitioner may also be required to coordinate design compliance declarations for a project.

These declarations are not administrative formalities. They represent professional statements about whether designs or building work comply with the Building Code of Australia and other prescribed requirements. Making a declaration without an adequate basis can expose a practitioner to disciplinary action, penalties and significant reputational consequences.

The timing of documents matters as much as their content. Builders and design practitioners must generally lodge the required declarations and regulated designs through the relevant NSW planning portal before building work begins. If the design changes, they must also comply with any additional lodgement and declaration requirements. A change on site may be commercially understandable – for example, when workers discover latent conditions or materials become unavailable – but it may also constitute a regulated variation that requires a revised design, a new declaration and a further lodgement.t.

For project principals, a sensible compliance process identifies who is responsible for each design element, confirms their registration status, records when declarations are received and preserves the version history of designs. This is especially important where consultants are engaged directly by different parties. Fragmented appointments can create fragmented evidence, leaving each participant to argue that another party controlled the relevant decision.

The principal contractor is not the only party at risk

Builders are often the most visible target when defects emerge, but liability and regulatory exposure may extend beyond the entity that performed work on site. Designers, engineers, architects, project managers, developers and subcontractors may each have a role that requires close examination.

The outcome depends on the work actually undertaken, the parties’ contractual and practical responsibilities, the statutory scheme and the evidence. A consultant’s limited scope may narrow its exposure, but a narrow written scope will not necessarily resolve the issue if that consultant assumed a broader role in practice. Conversely, involvement in a project does not automatically make every participant responsible for every defect.

The statutory duty of care and defect claims

A central feature of the Act is the statutory duty of care in section 37. A person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects in or related to a building for which the work is done. The duty is owed to each owner of the land on which the construction work is carried out, including subsequent owners.

This has considerable practical significance for owners corporations and purchasers. Contractual rights can be incomplete, particularly where the current owner did not contract with the builder or developer. The statutory duty may provide a path to recover the reasonable costs of rectifying defective work, subject to proof of breach, causation, loss and any applicable limitation issues.

“Construction work” is defined broadly and can encompass building work, the preparation of regulated designs and the supervision, coordination, project management or other work that has a substantive connection with the building. The precise boundaries are fact-dependent. Early legal analysis should therefore identify not only the builder, but every person and entity whose work may have contributed to the alleged defect.

A claim is not established merely because a building has water ingress, cracking, fire-safety concerns or non-compliant work. Expert evidence will ordinarily be needed to identify the defect, the appropriate standard of care, the likely cause and the reasonable rectification methodology. In many disputes, the real contest is not whether an issue exists, but whether the proposed rectification scope is necessary, proportionate and caused by the respondent’s work.

The Act’s duty of care is also non-delegable. A party cannot avoid the duty simply by saying that a subcontractor or consultant performed the relevant task. That does not mean responsibility is unlimited, nor does it remove the ability to seek contribution or pursue contractual indemnities. It does mean that risk allocation clauses must be considered alongside the statutory duty, rather than treated as a complete answer to a defect claim.

Evidence should be assembled before positions harden

Building disputes often become more expensive once parties commit to broad allegations or premature rectification works. Owners have legitimate pressure to protect the building and residents. Contractors and consultants need a fair opportunity to inspect, understand the allegation and respond. Both interests can be managed through an organised evidentiary process.

For an owners corporation, that will commonly involve preserving photographs, reports, correspondence, meeting minutes, strata records, contracts, approved plans, occupation documentation and maintenance records. A staged expert investigation may be more useful than commissioning a report that identifies symptoms but does not identify cause or a defensible scope of repairs.

For developers, builders and practitioners, the priority is usually to secure the project file before personnel change or electronic records are lost. Relevant material may include design versions, declarations, inspection records, site instructions, requests for information, certifications, subcontractor scopes, variation documents and correspondence concerning identified risks. A carefully maintained contemporaneous record can materially affect settlement prospects and the ability to defend a claim.

Parties should also avoid treating a regulator’s concern, a defect report or an owners corporation demand as determinative of liability. Each may be significant, but each must be assessed in context. There may be issues concerning maintenance, later alterations, access restrictions, intervening work, design instructions or the correct measure of loss.

Managing risk across the project lifecycle

The strongest legal position is usually established before a dispute arises. Developers should ensure that consultant appointments clearly identify responsibilities, deliverables, insurance requirements, document-control obligations and cooperation duties if a claim arises. Before commencing work, builders should confirm that the relevant parties have complied with the applicable design and declaration requirements rather than relying on informal assurances.

Design practitioners should be cautious about signing declarations based on incomplete information or assumptions outside their expertise. A design practitioner should prepare a declaration only after conducting a disciplined review of the relevant design, the applicable requirements and any qualifications that genuinely require attention. Where a change affects a regulated design, the responsible parties should escalate the issue promptly rather than attempt to resolve it informally on site.

For strata committees, early advice can assist with preserving limitation positions, deciding whether urgent works are necessary, framing expert instructions and communicating with lot owners. The right course depends on safety, the extent of damage, available evidence, insurance, funding and the prospect of recovering costs from responsible parties.

Papallo Kouchoo Lawyers advises clients on the compliance, evidence and dispute issues arising under the Act, including complex defect claims involving multiple parties and overlapping statutory regimes.

A well-managed matter begins with establishing a precise factual map that identifies what was built, who was responsible, which documents exist, when the issue emerged and what outcome is commercially justified. Establishing that foundation early gives parties a better prospect of resolving the dispute on informed terms, or presenting a disciplined case if resolution is not possible.