Giorgio Marfella 0:05
Good afternoon everyone. My name is Giorgio Marfella and I'm the chair of the Architects Registration Board of Victoria. Welcome to another webinar of the ARBV. As always, I'd like to begin by acknowledging the traditional owners of the lands in which we are today. In particular, I acknowledge the Wurundjeri people of the Kulin nation and I pay my respects to the elders past and present. So today we have a topic of growing relevance, modern methods of construction and in particular we would like to discuss some regulatory implications of this. Well, I would like to be tempted to say new technologies, but that somehow they they are more more of a format of delivery the projects that that involves sometimes new technology but also existing ones like prefabrication that have been around for a long time. And as always, this is a webinar that is valid for formal continuing professional development in Victoria and in order to participate you you can obtain a certificate of attendance. We'll be providing a QR code through the presentation today and you should be able to to scan it right now and a link also will be available to you and we will also submit back to you a form as proof of attendance and and you will have 24 hours to to fill in the the questionnaires after today.
So I will also remind everybody this is a mandatory CPD is a mandatory requirement in Victoria and the ARBV monitors CPD compliance. Our presenter today is Frances, Frances Special Counsel, Frances Hall.
Special counsel from Were Legal Frances has been with us before and and so of course, as always, if there's any questions, we'll leave some time towards the end. Feel free to put anything of relevance in the Q&A section. If time allows, we'll have a bit of a discussion to to close the presentation. With this, I can simply hand over to you, Fran.
Frances Hall 2:11
Thanks very much, Giorgio. Uh, and uh, thank you for having me uh to present today. Uh, as uh, Giorgio mentioned, um, modern methods of construction is uh, a topic that is uh, of great interest at the moment. Um, it's been talked about a lot by government. Uh, but it's not really a new thing. So uh, the question is, why are we talking about it? Um, and how does it fit in to our regulatory system and and what are the things to look out for, um, for you as architects. So um, you'll see we've got an outline that we go of the Um topics that we're going to cover today. Um, why are we talking about MMC? How is it regulated in Victoria? What are the gaps and what risks do they pose, uh, for architects?
What's an architects role when utilising MMC in a design or in administering a contract? What are the risks for architects and how to mitigate them? And what's the upcoming reform in Victoria? Because there is a lot of reform that is on the horizon at the moment.
So um, to start with, um, what is MMC? Um, modern methods of construction is a sort of a terminology that's that's, um, come about in the last year or two. Um, it's really a catch-all term. It's not a defined term. You won't find the phrase modern methods of construction in the Building Act or in the National Construction Code. It is now referenced in the Domestic Building Contracts Act after some recent amendments and I will talk to that a bit later on in this webinar, but even uh, even in the the DBCA, it's still not defined. So it is really a sort of a broad term and it's used to mean Uh offsite or Um, Uh, automated construction. It includes prefabricated Um buildings. It includes modular or sometimes it's called volumetric construction of Um, you know, apartments or units that might be built Um completely offsite and then craned into place and and fixed into the structure of an apartment building or some other type of building. It also includes off-site construction of component parts or systems, so that might be anything from wall systems to bathroom pods uh to smaller kind of building elements and it also can include things like 3D printing or other robotic type of construction. So it's really used um to to capture a range of work that departs from that um accepted understood meaning of construction work carried out by by human beings on a building site.
So um, there has been a lot of talk in the last few years about the advantages of Um MMC and I I I've I've described them as potential advantages because I think that, um, there is still not a lot of really clear data about this, but there is a sort of an increasing acceptance by government that using MMC can reduce the length of a build, that it may reduce the cost of a build that products or buildings that are built offsite in a factory utilising, you know, machinery and robotic methods can improve precision and quality control Um in the built product and that there is also potentially um a lower carbon footprint. Um and there is certainly um a bit of data about um reduced length of build in the context of variability of weather, certainly being able to build offsite takes out that factor of delay that that can really add into build time in traditional construction work.
So uh, why are we talking about MMC now? Uh, I'm sure, um, many of you would, um, be very aware that Um off-site construction is not a new concept and and and Georgia referred to that in his in his comments at the start of this webinar, it's really not a new thing. Precast concrete panels have been used for a really long time, so have prefabricated buildings.
Um, it's Um standard to Um utilise roof trusses that have been designed and manufactured offsite. Um, light gauge steel framing is also becoming very commonplace now.
So the idea that parts greater or lesser of building work are being built off site and then installed on site later is not a new concept at all.
Really what has prompted, um, a really big change over the last couple of years apart from Um, you know, an increase in technological capability is really Um, the Productivity Commission findings, Um in February of of this year, which I think have really kind of supercharged the I suppose the authorising environment for MMC. Governments are very willing to contemplate this being brought into our building and construction system and to consider regulatory change.
So what the Productivity Commission found was that we have a housing crisis in that we need another 1.2 million homes over the next five years. But we need that in a context where housing construction productivity is going down. There are longer build times. Quality of construction is increasing, but the uptake of innovation is slow. Manufacturers are much faster to innovate than builders are, and as a result Um, in Australia, currently only 5% of construction occurs via MMC. Um. And just as a just as a note, um, this varies a lot, um, across different jurisdictions in the world. So in Japan for example the the use of MMC is relatively greater at around 15%. In Sweden it's incredibly high. The vast majority of building work is carried out off site, so Um, that sort of goes to show that it is possible to Um incorporate MMC Um into Uh standard construction work, but the environment has to Um be there Um for that to happen.
So why has it not happened in Australia yet is the question Um and one of the reasons for that the and this is um continuing um from the Productivity Commission. These are findings of the Productivity Commission.
Um, one of the findings was that there's Um high fragmentation in the construction sector, meaning that Um, most construction businesses are small businesses or they are individual contractors. So that's not a sort of Um work environment that is conducive to taking on innovative technology, one of the biggest reasons that I think MMC uptake hasn't been greater in Victoria and in Australia more generally to date is the fact that regulation just absolutely has not kept pace with the technology. So um, uh, as I mentioned earlier, there is no reference to MMC in the Building Act, there's no reference to it in the National Construction Code. And one of the things that I'll talk about in in a little while is the Um, our our sort of regulatory processes are not geared to Uh work that is carried out offsite right at the moment, our regulatory processes sort of contemplate a traditional construction project where there is a design and then the the building work is carried out by human beings on a building site.
Uh, so there's a really large gap at the moment between the regulatory space and the technology that's available. And then I think a another reason why the uptake hasn't been greater is that the Um, the perception among consumers regarding MMC has probably not been a positive one. Um. If you're like me, then um, you might associate uh in the past MMC with things like um Uh, prefabricated granny flats or portable, um, portable classrooms or um, the the the the sort of prefabricated um building elements that are used in facilities rather than in homes. And so I think what that has meant is that there is perhaps not an understanding of how MMC can be utilised in a Um in a more commercial or a domestic setting in a way that is high quality and aesthetically pleasing.
And I I I would add, I think one of the one of the factors that I think is also relevant is that in Australia I think for the for businesses that are you know creating an MMC product, it is hard to achieve scale because Uh, Australia is a small market generally and it's also a market where every state regulates Uh building work differently and that makes it quite hard I think to Um to Uh sell your product and achieve scale Um in a way that Um is not really cost prohibitive.
So, uh, what's happening now? So we know that changes are underway, um, prompted by the housing crisis at both the national and a state level. Governments are seeking ways to increase the speed of production.
Um, we also know that the MMC sector is, uh, working together. There are various peak bodies that have been established. They are, um, advocating for their products and technologies. They're pushing for reform.
And they are starting to achieve scale in their production capacity. And I think there's also been perhaps a change in consumer sentiment.
So, um, that takes us to our first quiz question. Um. And you'll see that QR code Um is on your screen. So if you haven't already, um, scanned it, um, just take a moment and scan it with your phone.
That will enable you to answer the question. The first question is what has prompted the need for reform relating to MMC? Is it A) The need to increase housing stocks quickly? B) Confusion about what it means? C) The lack of reference to it in the NCC or the Building Act, or D) All of the above. I'll just give you, um, 30 seconds or so to answer that first question before we move on to our next topic.
OK.
Now in terms of the regulatory issues, there's a number to go through and and I've broken them down by the various stages to which they relate, but I thought that I would begin this part of the presentation by just giving you a quick refresher of regulation of building work in Victoria so that you can see where the where the kind of pinch points really, um, emerge for MMC.
So in Victoria, as you know, building work is regulated by the Building Act and under Section 16 of the Building Act, building work must comply with the Act, with the building regulations, and with the National Construction Code, which is incorporated by reference into the regulations, the National Construction Code itself, as you would be aware, sets out performance requirements that the building work must meet and it incorporates by reference a number of Australian standards. So depending on whether you're whether you're following the deemed to satisfy provisions in the NCC or whether you're utilising a performance solution, it may be the case that Australian standards will apply to that work. Um at the Um commencement stage of the building work, a building permit will be issued by the relevant building surveyor or RBS, Um and that building permit will be based on the Uh application for the building permit and all of the documents that accompany that. So that will be the the detailed design drawings, it will be the engineering drawings and computations. It will be any certificates of compliance issued by engineers, and it may include other documents as well, for example fire engineering reports, soil reports. Um uh. The list of documents will vary depending on what the nature of the product is. Uh, nature of the building work is sorry uh and then during the Um during the building work Uh mandatory inspections are carried out and that is to ensure that the building work is being carried out in compliance with the requirements of the ACT and the the NCC Uh and also with the permit. So um the inspect will also confirm whether or not the what is being constructed matches the design that was approved.
So um, when you think about the the, the regulatory structure of building work, you can see then that um, a number of issues arise for Um MMC in that current landscape. So at building permit stage, um, there could be issues to do with approval of product use of certifications of performance solutions and uh, there could also be um issues during uh or I'm sorry, there could be issues in terms of what um the RBS specifies in the permit to be the inspection stages for the building work, and I'll go into that in a bit more detail in a minute. During the building work, there is then the question of how and where to carry out inspections, what documents to rely on? And then there are other issues as well that emerge. Progress payments for the work in a context where perhaps a large component of the work is being carried out offsite.
What happens where there is insolvency on the part of the MMC manufacturer and issues to do with registration or licensing of the workers who are carrying out that work?
So um, as I mentioned, uh a minute ago, um, there are there are issues that the RBS needs to deal with when assessing a design for the purpose of an application for a building permit.
Under section 24 (1) of the Building Act, the RBS cannot issue a permit unless they can be satisfied that the work will comply with the Act and the building regulations. So as I mentioned, this means that the application for building permit has to include documents which demonstrate how the building work will comply, and that will include a variety of different documents.
So, um, we're we're going to jump to our second quiz question now. Um, question two is what? When can compliance of an MMC product, system or method be approved?
Is it A) it must be approved at building permit stage, B) it can be included at any stage so long as there is appropriate documentation for it, or C) it can be approved at occupancy permit stage so long as there is appropriate documentation for it?
I'll just give you a few seconds to answer that.
OK, so um, the answer for question two is A) it must be approved at building permit stage. I will say that um, you can of course amend a building permit, so things can change and MMC could be incorporated at a later stage, but that would only be lawful and correct if the building permit were to be amend amended.
And that amended, that amendment, sorry, occurred prior to the use of the product. So those of you who have had previous webinars from me might remember that this is something I've I've mentioned a few times.
That, um, building permits can be amended, but they can't be amended retrospectively. So if you're going to, uh, if you're going to change something, you need to change it before you've actually carried out that work.
OK, moving on to Um, the NCC compliance methods, just a reminder about how that works. So a building design has to comply with the performance requirements in the NCC. That will be either via a deemed to satisfy Uh design or a performance solution. Uh. Now that doesn't mean that every building product that is used in building work has to demonstrate compliance.
Um, the product only needs to be compliant where that's Uh relevant to the Satis, relevant to satisfying the particular performance requirement that is in question now for Um things like Um Uh, modular apartments or um, bathroom pods or things like that. Um, there absolutely will be a need to demonstrate compliance because um, that constitutes such a large proportion of the building work that there will be a number of performance requirements that need to be demonstrated have been complied with.
So there are a number of evidence of suitability pathways. Um under the NCC. Um, I won't. I won't run through them, but you can see them in that list on the screen.
So what that means is that for a for a MMC type of product or build building element, there are a number of different ways that you can demonstrate that they are a suitable product that is compliant with the NCC. Now the tricky part I guess is where you need to Uh, achieve um demonstration of compliance for something that is quite uh detailed and contains a lot of elements or components. So something like a uh a wall system you might be able to get um codemark certificate for that. That means demonstration of compliance. Once that code mark has been achieved by the manufacturer, then it's a relatively straightforward process to incorporate that into a design and for that design to be assessed by the RBS as being suitable, it becomes harder the more complete the item is that you're talking about. So for example for a a sort of a complete modular apartment that is constructed offsite in a factory. Um, that's not a product, a building product in that kind of traditional way that we might understand what a building product is. And so um, it's it's, um, not really possible to get codemark certification for something like that. And So what that would need is, um, a detailed set of Um design drawings, Um and Uh engineering drawings, and also probably a certification of compliance design from an engineer or the like to support proof of compliance of design. There is also some kind of movement in terms of Uh bathroom and plumbing products. So the Australian Building Codes Board Um has issued a direction that says that bathroom pods, which um uh are a sort of a full and complete prefabricated bathroom that can be um installed into a building, um, uh, they can achieve watermark certification. So that Uh simplifies the process of demonstrating compliance for the purpose of issuing a building permit. Um. But as you can appreciate, uh, some types of MMC are much more conducive to demonstrating compliance than others.
So um, really the same issues arise for MMC as arise with any kind of architectural design. Um, so the design has to be sufficiently detailed to clearly show how compliance will be achieved, where certificates are being relied on to demonstrate compliance, then those certificates need to be current and they need to apply to the proposed use. So you would need to check that those certificates apply to the specific use that you're considering. If you're considering incorporating this into a building design, um, where a product is imported from Uh overseas, compliance obviously still needs to be achieved and so um, the documents that are available need to be carefully assessed to ensure that compliance can be demonstrated.
And there may be, you know, depending on what it is that's being imported, there may need to be in Australia, a detailed design review carried out, assessment of materials and an inspection regime.
So that takes us to question 3. How can a system, product or building made offsite be verified for compliance for the purpose of inclusion in a building design? Is it
A) performance solution is required for it. B) documentation must be provided that verifies compliance via one of the pathways in the NCC. C) the RBS can approve it as part of the building permit documentation.
Or D) These systems or products can't be verified for compliance.
Just give you a moment to put in your answer for that.
OK, so the answer for this question is B). Um, in terms of answer A), it's not always the case that a performance solution is needed. It might be possible for Um for a deem to satisfy Uh, solution. Uh to be applicable. Um, it is also true with Um answer C) the RBS can approve it, but they can only do that if they've got the documentation that's referred to in B).
OK. So the next regulatory issue that we have is mandatory inspections.
So in terms of Um inspection stages, you would all be, um, familiar with the concept that the building permit that is issued by the RBS has to set out the mandatory inspection stages for the building work.
Uh, the building regulations prescribe some mandatory stages, although this may depend on the type of building work. So for example, prior prior to Uh footings, foundation, frame, final, it's pretty standard for some classes of building now there will be additional waterproofing inspections. The Uh RBS has the discretion to add more stages. This is not, um, something that's particularly well understood, but the RBS has a lot of discretion uh, when they issue a building permit and they can add as many inspection stages as they like. They tend not to. Most RBSs will stick with the minimum prescribed stages. Um. But the their power to do that is always there. So the issue that we have is that work might be completed offsite that doesn't match the stages that are in the building permit and how do we deal with that.
So um, there is no easy answer to this question at the moment as the Building Act is is sort of framed, it really, uh, doesn't contemplate this kind of issue.
So what it means is that if, um, some or a lot of the work is being completed offsite in a factory, then it might mean that inspections need to be carried out offsite as well. Um, there may need to be additional inspections.
So the inspection stages might need to be specified so that an inspector goes out and carries out an inspection prior to concealment of the relevant things. So prior to to, for example, prior to the installation of walls or other things that that cover up matters which need to be inspected. So um, what's really required at this stage is for the RBS to turn their mind to how and when inspections are to be carried out so that they can make sure that the inspections are carried out at the mandated inspection stages, whether that's offsite or or onsite and there may also need to be additional inspections onsite to ensure that something which has been constructed offsite but is then being installed or assembled onsite that that occurs correctly.
Um, now the next sort of gap that exists between our existing regulatory regime and Um MMC Um relates to progress payments. Um, you'll all be familiar with the idea that for domestic building work, progress payments are controlled by the provisions of the Domestic Building Contracts Act. Stage payments are not to exceed the specified percentages of the total contract price. This is different for work that doesn't fall within the Domestic Building Contracts Act. The the gap arises in that for MMC construction, large volumes of the work might be completed offsite at a relatively early stage, and that might mean that large payments are required which don't match in any way the stages that are prescribed under the DBCA, Um, now there has been Um Uh amendments passed to the Domestic Building Contract Act. Um. Those changes Um went through Parliament and were passed in September of this year.
They haven't yet taken effect. They will take effect next year. We don't yet know the date on which the relevant provisions will start to take effect, but there have been some quite significant amendments to that act generally, but also specifically in relation to this particular issue, and I will talk a little bit about that a bit later on.
Uh, and the next issue where there is sort of a gap between our current regulatory regime and MMC is in the area of Uh insurance, so where the work is carried out offsite. Um. And where it's not carried out by a registered builder, bearing in mind that some, uh, some MMC work is carried out by registered builders. So this is just talking about a scenario where that's not the case. Um.
Then there is no where it's not carried out by a registered builder, then it won't be work for which domestic building insurance is issued. So the impact for that is that where the manufacturer becomes insolvent, there won't be any recourse to insurance. Now what sort of risk that poses for the project really depends on how much of the project is is linked to an MMC construction method. And of course it it's always a risk. Insolvency is always a risk in any building project. The rate of insolvencies for builders has increased significantly over the last few years, so so insolvency is always a risk, but the risk is different for builders in the sense that there has been for domestic building work at least the last resort domestic building insurance that was required for that sort of building work and with recent amendments to the Building Act, that's now moving to a first resort insurance product.
So there is capacity for insurance for that type of building work that is not available for work that is carried out, not by registered builders.
So that takes me to the next sort of regulatory gap, which is in relation to registration of workers. So where products are made offsite in a factory, that may not constitute building work depending on the context, and that will mean that it won't be carried out by a registered builder or by registered building practitioners, because no registration is required, so that means that although the the onsite work, so the installation fixing down that will still be carried out in a regular manner for the offsite component of the work where it's carried out with unregistered workers.
Um, there is, I suppose, an additional gap in the sense that, um, the people carrying out the work, uh, are not sort of regulated by the Building and Plumbing Commission, they can't be, um, held responsible for their conduct via a disciplinary process or anything like that, the enforcement processes that are available, so building notices and orders, they won't be able to be issued in this sort of a context. So that's just an additional gap that currently exists. So question 4, how can work carried out offsite be verified for compliance? A) via mandatory inspections, B) by reliance on the manufacturer's quality assurance process C) reliance on design documentation or D) assessing compliance once installed onsite. I'll give you a few seconds to answer that.
OK, so the answer to question four is A) via mandatory inspections. Um, reliance on design documentation won't get you there. That that is only relevant to verifying whether the design itself is compliant, not whether the work is compliant.
So you always need an inspection. In terms of reliance on the manufacturer's QA process, that's not available under the current regulatory regime, but I will talk in a minute about proposed reform and that is one of the possibilities that comes up.
OK, issues and risks for architects. Uh. I've identified a few here at both design stage and Uh contract administration stage, so um at design stage, there are various things that architects can do to minimise the risk of non compliance emerging. One of them is to ensure that the design is as detailed and complete as possible.
Um, so where MMC is proposed to be utilised, that would mean making sure at an early stage that you have all of the relevant documentation, including Um drawings, including any Um compliance certificates, codemark, that sort of thing that you have those at an early stage um where um the scope of your work is limited and I understand that that is a that is a um consistent issue that um exists at the moment um that um architects may be presented with a limited scope of work or where the design and construct model is used, meaning that there might be changes or that your work cannot be complete as complete as you would like it to be because your scope has been limited contractually, then you should make clear that any Um additions or alterations must be Um compliant and Um must be signed off by the RBS. It's also useful to design to ensure that design coordination occurs at an early stage between architects and engineers, and that includes, you know, in reference to MMC products or or methods of construction.
And lastly and most importantly is liaising with the RBS if at the building permit stage you have any concerns or compliance matters that you think should be flagged with the RBS, you should turn your mind to that and you should raise them and document that you have raised them.
So at the contract administration stage, there are other steps that you can take as architects to mitigate your risk. One is to act early where there are issues between the payments in the contract, DBCA progress payments and um uh sort of MMC requirements. Um then um you may need to or it may be appropriate to turn your mind to Um whether or not the Um contract adequately reflects what has to happen and to raise that um at an early stage. If you think that might not be the case, um, you should also um make sure that offsite work is being suitably supervised. Um, so that um uh inspections or or um compliance documentation is provided to you at an early stage. Um. You should ensure that Um all required documentation is supplied regarding compliance, so any certificates that need to be provided to you or additional drawings.
And you should, as with as with that design stage, liaise early with the RBS where you identify any issues or concerns during the course of the building work.
That takes us to question five in our quiz for today. What step can architects take to address the gaps in the regulatory framework for MMC? Is it A) avoid using it in projects? B) Exclude liability in contracts where MMC is incorporated into the design. C) Put the manufacturer's product information into the design documentation or D) Ensure design documentation is full and complete and addresses compliance of products or methods via NCC suitability pathways.
You have a few seconds to answer that question.
And the answer to that question is D.
OK, reforms on the horizon. There's quite a few changes that are are being flagged in relation to MMC. So as I mentioned, the there were changes to the Domestic Building Contracts Act that were passed in September of this year. And as I've mentioned, the DBCA regulates the amount that is claimable as progress payments. So what's happened is that those sections that that specify that have been amended so that Um contracts which are contracts utilising MMC will Um be able to differentiate Um I in terms of the percentage of the total contract price that can be claimed.
And that depends on what proportion of the building work is MMC. So there'll be different prescribed amounts for where the MMC is over 50%, where it's between 30 to 50%, or where it's less than 30%.
Um, now we don't know what those percentages are just yet. That's going to go into the domestic building contract regulations and those have not been passed yet. But Um, I would anticipate that that would happen Um at some stage next year. So that's something to keep your eye out for Um and uh, update yourselves about because that will be, uh, a big change to progress payments.
Uh, now another Um sort of area for reform is that the Um Department of Transport and Planning has recently gone through a consultation process and put out a discussion paper highlighting Um areas for reform.
Um. And one of the things that they have identified is Um, as I've mentioned that there are in the building Act, there's currently really no Um definitions of Um any of these sort of MMC kind of technologies. So one of the things that Um they are considering is including in the Building Act new definitions that would relate to prefabricated or offsite work. They have also raised the possibility of a new of a design practitioner declaration regarding prefabricated work, which I think is pretty interesting. Many of you would be familiar with the idea that in NSW all design has to be the subject of a a design practitioner declaration that it's compliant, and that applies to architects and other types of building designers. That doesn't exist in Victoria. There's no obligation on architects to do that, but there is this possibility that for prefabricated items that there will be this design compliance statement. Um. There also may be a new class of Uh building inspectors, Um being a class that relates specifically to inspection of Um Uh, prefabricated buildings and things that are built offsite. Um. There is also um a possibility for Um amending the building app to create new inspection stages for offsite work to address that gap that I spoke about earlier in terms of the mandatory inspection stages and how that really just doesn't reflect what happens when buildings are built offsite and then there is a possibility for product Um certification or manufacturer certification. So So what that would mean is that where you have a sort of a prefabricated product instead of there being an inspection regime so that this this would be put as an alternative reform to the creation of new mandatory inspection stages. An alternative would be to have a product that is certified. So that would mean that the the design of that product has been, um approved as being a compliant design that the manufacturer's process for manufacturing of it has been sort of inspected um and certified and rather than having inspections of each product that is built there is instead a a sort of, um, a certification of the product and that is that would be supported by an ongoing quality assurance process, um auditing, um, um, sort of regular auditing Um, that sort of thing. So that that that sort of Um treats the regulation of MMC as a product rather than as work. So that's that's quite a different approach to Um changing the Um inspection stages.
So there has been a a public consultation process about that and there is likely to be legislative reform within the next year or two. There has also been some commercial changes. So one of the problems with MMC in the past has been that it's difficult to use it because, excuse me, commercial products such as construction loans may not be prepared to recognise work that is been carried out this way and payments that are made in a way that differs from the usual Um Uh progress payments. And so it it has been hard to get finance on a project that uses this sort of technology. Um, I understand that there is um change on that front that CBA has now issued a financing product that recognises it Um and that may then also prompt Um Uh insurers to be perhaps more welcoming of this type of technology in a project.
Um. And lastly, there is also the potential for Um national Um reform. Uh. So this would Um in in the context of Victoria, what this would likely mean is Um changes to the Um National Construction Code. And so that might include, for example, putting consistent definitions into the NCC about what MMC is and when it can be used. There is also a proposal for a national voluntary certification scheme. So again, that would be sort of a product certification scheme along the lines of what I spoke about just earlier. Um, but it would operate in a national way, which would mean that products can be used Um in different states and territories without the need for an entirely separate sort of compliance process to be gone through.
So that takes us to our last question, question six. What are the problems with MMC that Victorian legislative reform will seek to address? Is it A) the speed of building approvals, B) the consumer perception of the products?
C) Certification of products and inspections regime or D) difficulties in obtaining finance.
So the answer to that one is C certification of products and inspections regime.
Um, so um, this takes me to my last slide, which is if you are seeking some guidance on MMC and evidence of suitability, the Australian Building Codes Board has some really useful handbooks.
Um, they are available on the Um ABCB website. There's a link there, but you can just Google it and um, it'll come up. And those are particularly, um, practical and helpful.
So, um, I will stop sharing my screen, um, and we may have a couple of minutes, uh, left available where we can, uh, take any questions.
Giorgio Marfella 56:47
Thank you, Fran. Yes, there's quite, quite a few questions. They're all very interesting. So apologies, I might have to pick a few ones for reasons of time. And so by all means that it's not because the other ones, I would love to really go through all of them and but I'd like to start with one. Fran, you might be able to give us a fairly straightforward answer as a lawyer, it's this one. In case of insolvency of a prefabrication house supplier, does the client own the partially constructed building located offsite and can take possession?
Frances Hall 57:09
Oh.
Giorgio Marfella 57:22
Presuming they have paid progress payments as required when paid for and built on client's land, ownership is more clear.
Frances Hall 57:31
Yeah, that that's a great question and it will really depend on the terms of the contract. So some Um manufacturers might try and put a retention of title clause into their contract. Um. So it might mean that they, uh, they try to retain ownership of it until it's completed or paid in full that might, um, muddy the waters. So yeah, I do think, um, it is it is a a a much murkier Um prospect where something is being carried out offsite rather than onsite.
Giorgio Marfella 58:05
Very good. Now another one that has come out, it's more like 2 questions that are combined and I'll try to summarise them. It's the issue of overseas transactions. So in essence, the first question is asked whether.
Frances Hall 58:06
OK.
Giorgio Marfella 58:22
Prefabrication often is done overseas and whether the government can regulate specifically imports products and and so that's one part of the question. But the other one is also what is the role of the relevant building surveyor in that context and how can they inspect work that is fabricated overseas?
Frances Hall 58:43
Yeah, look, um, I I think it would be very difficult to use that kind of work unless, um, there is, um, some kind of, um, certificate of compliance for it.
So if you're talking about a smaller product, um, even if it comes from overseas, you can still get Um test reports or you can get, um, you know, the manufacturer might or the importer might seek to get a code mark certificate or something like that so that compliance can be verified in Australia.
Um, if you're talking about sort of a a larger item, I think it, I think it gets very difficult if it's been constructed completely off-site and you can't, um, uh, inspect the constituent elements of it, then I don't think there's a way for an RBS to be satisfied that it's compliant.
Giorgio Marfella 59:38
Yeah. And lastly, again, I'll try with this question to to cover a bit a few issues here that have been raised also in others. You spoke about the provisions to have, well, there's mandatory inspections that are prescribed in in the building regulations, but there's also an opportunity for the RBS to prescribe some additional inspections which are still mandatory if prescribed, my understanding right, but the additional and so and to to clarify that. So that's also that opportunity first of all, but also here there's a question that here indicates that.
Frances Hall 1:00:00
Mhm.
Yes, yes.
Giorgio Marfella 1:00:16
And there's also the need to ultimately insect everything once installed on site, right? So so that that is that is that correct?
Frances Hall 1:00:22
Yes.
Uh, yes, yes. And and look, um, there is always sort of the, you know, the mandatory final inspection. Um, but I think an RBS doing their job properly would also need to consider, um, is there some, is it, is there any additional inspection that might be needed prior to filing?
Giorgio Marfella 1:00:34
Yeah.
Frances Hall 1:00:44
All that um that I need to carry out or cause to be carried out where I um can confirm that the installation itself has been done in a in a compliant proper way.
Giorgio Marfella 1:00:58
Yeah. So the the additional inspection costs do not override the the the ones that are already existing and the final one being the one that of course everything onsite has to be verified. And this this goes back as there was a interesting question at the beginning there was some exchange where.
Frances Hall 1:01:07
Yeah.
Giorgio Marfella 1:01:14
Ultimately prefabrication, it's only as good as when it's installed on site, right? So there's connection to services, there's foundation works, etcetera that have to be compliant and and executed on site and that's what part of the risk perhaps lies, right?
Frances Hall 1:01:20
Yes.
Yes.
Yeah, absolutely. So, so a product could be, you know, designed and manufactured perfectly offsite, but if it's not installed correctly or the preparatory work that's done onsite is not done properly, then you you'll still end off end up with a.
Giorgio Marfella 1:01:32
Yeah.
Frances Hall 1:01:49
A raft of noncompliances and defect issues.
Giorgio Marfella 1:01:52
Hey, I'll, I'll close it here. So thank you very much FRan. This is a comprehensive overview, but also we've highlighted I think quite clearly how the the regulatory environment is shifting. So we we have to somehow catch up on these things and I'm sure we'll have opportunity to do that again in the future.
Frances Hall 1:02:06
Yes.
Giorgio Marfella 1:02:10
I also you pointed out the fact that is a consultation process likely to to happen. The Department of Transport and Planning is working on reforms and they so we we obviously encourage all the architects to contribute to that process. And so I'll thank you with this again Fran. I hope to see you again in the future and I thank everybody.
Frances Hall 1:02:28
Thank you.
Giorgio Marfella 1:02:29
who's attended today. Thank you very much and see you next time.
Frances Hall 1:02:33
Thank you.
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