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Building surveyors prohibited from agreeing to novation of contract with an owner or developer

By Simone HoldingEloise Crompton

• 04 February 2021 • 2 min read
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The new Code of Conduct for building surveyors approved by the Victorian Building Authority (VBA) commenced operation on 1 January 2021. The Code applies to all building surveyors in Victoria, when providing building surveying services, including those working as private and municipal building surveyors.

For developers and contractors, the most significant change imposed by the Code is a prohibition on building surveyors agreeing that their contract(s) with an owner or developer can be novated to a builder. Previously in Victoria this prohibition on novating contracts applied only to domestic building work under the Building Act 1993.

The prohibition is given effect by clause 4.1.7 of the Code for the purpose of encouraging building surveyors to act independently when providing building surveying services. Clause 4.1.7 requires that in order for building surveyors to meet this principle they must avoid situations which a reasonable person may conclude has or could compromise impartiality or professional judgment, which includes:

Not agreeing to novation of [their] contract with the owner or developer to a builder or other party before or during construction. The contract for the building surveying services provided by the relevant building surveyor must be between the applicant and the relevant building surveyor.

This requirement of the Code is consistent with the varied obligations imposed under the Building Act 1993 on owners of building sites, rather than builders, including to apply for building permits, occupancy permits and otherwise comply with protection works determinations.

Developers and contractors will need to be mindful of this new prohibition when considering an appropriate contractual structure for new developments.

The development of the Code for building surveyors is a first for the VBA and complements the existing legislative and regulatory framework for building practitioners in Victoria. How it will operate in practice and the extent to which the VBA will prosecute breaches of the Code will become clearer over the course of the year, but a failure by a building surveyor to comply with the prohibition on agreeing to novation of a contract with an owner to a builder is likely to be a significant breach.

For the full content of the VBA’s new Code of Conduct, click here.

Looking for more information about the implications of the new Code of Conduct?

Contact our Construction team

By Simone HoldingEloise Crompton

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