The role of property developers in the Queensland building and construction industry has been flagged for review by the Minister for Public Works.
Whilst licensing of developers is not specifically on the agenda, the stakeholders who called for the review have referred to the ACT's plans to implement a licensing regime for property developers like that for real estate agents.
Despite committing to the review in July 2020, so far no formal steps have been taken to convene a review panel or publish the review terms of reference.
Here, partner Kristy Dorney explains the background and what licensing property developers might mean for Queensland.
In July 2020, as part of an overhaul of Queensland building and construction industry laws, the following section was inserted into the Queensland Building and Construction Commission Act (QBCC Act):
115D Review of role of developers
The review arose as part of the public consultation process for the new Queensland Building Industry Fairness (Security of Payment) and Other Legislation Amendment Bill 2020 (Bill). The Committee reviewing the Bill recommended the Minister for Housing and Public Works "consider undertaking a review of the role of property developers in the building and construction industry, including consideration of the impact of their financial and operational capacity, ethical behaviours, and work practices".
That recommendation was accepted and implemented.
The Committee proposed the Minister should conclude the review and report on his findings by 1 July 2021. However, this deadline did not make its way into the QBCC Act.
At the time of writing this article, there have been no media releases or statements published confirming the review panel has been established or the terms of reference required to guide the review.
Licensing of developers is not specifically mentioned as part of the review. However, it was a key feature of the submissions behind the introduction of the review, and it was noted the ACT is currently in the process of implementing its own licensing regime for property developers.
On that basis, it is expected that will be a key feature of the review.
The ACT Government announced in November 2019 it was committed to creating and implementing a property developer licensing regime. The ACT Minister for Building Quality Improvement, Gordon Ramsay, said "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."
It is not explained how developers are 'forcing' this behaviour, save for a reference to developers imposing unrealistic timeframes. There is also little reference made of the extensive regulatory system already in place requiring builders to adhere to minimum standards for their work and which ought to already avoid owners being left "with the bill". The suggestion seems to be that developers are driving a hard bargain and asking builders to cut corners which builders must yield to if they are to survive.
As of 2 December 2020, the ACT Government has confirmed the licensing regime is still intended and is being advanced. However, no draft legislation implementing the regime has been submitted.
If the regime follows the one already in place in Queensland for builders, then it is likely to include—
Also, if the proposed ACT regime and other amendments are adopted, then it might also see the inclusion of—
One obvious preliminary issue will be determining what is a 'developer' for the purposes of the regime. There is no guidance on this question in any of the submissions or the Committee's report. The ACT Government's initial media release in November 2019 stated the first stage of work for it was clarifying what constitutes a 'developer' for licensing purposes.
In a July 2020 media release, it indicated licences would apply to "the most high-risk developments in terms of quality" with multi-unit residential developments being specifically identified.
We will provide further updates once details of the Queensland review of the role of property developers in building and construction is progressed.