Property Developer Licensing Scheme - key terms

Aggrieved person

A person who may make a complaint about a licensed property developer

Authorised person

A public servant appointed under the Act to undertake enforcement-related activities.

Associated entity

A related corporation or an entity prescribed by regulation, of a corporation that is applying for a licence.

Where the applicant is a corporation and the registrar considers it relevant, the registrar may consider the suitability requirements (section 9(1) of the Act) for an associated entity and a former associated entity for the corporation.

The registrar may apply conditions to an associated entity (section 19(2)).

Example

Foord Developments Pty Ltd holds a licence and is the parent company of 3 subsidiary companies, each responsible for the development of different residential development projects. One of the subsidiaries is placed under external administration and defects relating to a number of buildings constructed by the insolvent company have been identified. The registrar imposes a condition preventing the subsidiary companies from undertaking new projects and requiring additional independent review of design documentation for the subsidiaries’ projects.

Complainant

The person making the complaint about a licensed property developer

Grounds for regulatory action

Regulatory action can be taken against a licensee, if they:

• used false or misleading information to get their licence
• failed to comply with a licence condition
• gave false or misleading details about their development activities
• are no longer eligible to hold a licence
• had their licence suspended or cancelled under section 38 of the Act
• were convicted of a serious offence, either in the ACT or elsewhere
• contravened this Act (including any approved code of practice) or a relevant law
• faced regulatory action in another state or territory
• didn’t follow requirements from previous regulatory actions
• are affected by any other reason set out in regulation.

See Section 33 of the Act.

Key person

Someone who holds significant influence or control over a corporation or its associated entities. This includes:

• Directors or secretaries of the corporation or its associated entities; and
• An individual who:
  • directly or indirectly owns, holds or controls 25% or more of the shares or a class of shares in either corporation, or
  • gives instructions to officers who generally act on those instructions, or
  • makes or participates in making decisions that affect a substantial part of either corporation’s business or financial standing, or
  • acts in ways that reasonably suggest they control or influence either corporation’s business.

A key person for a corporation does not include:

• a professional whose advice influences conduct (e.g. a lawyer or accountant employed in that capacity by a firm of lawyers or accountants engaged by a corporation to give the corporation advice on a particular matter)
• a regulator acting under legal authority
• external administrators (e.g. liquidators, controllers) as defined under the Corporations Act 2001 (Cth).

Refer to section 8 of the Act for more detailed information.

Where the application is a corporation and the registrar considers it relevant, the registrar my consider the suitability requirements (section 9(1) of the Act) for a key person and a former key person for the corporation.

Licensee

A person licensed under the Act to undertake certain activities in relation to regulated residential buildings (section 7 of the Act).

Person

Includes a reference to a corporation as well as an individual.

Property developer

Includes a person who:

• contracts or arranges for, or facilitates or otherwise causes the building work to be done
• the owner of the land on which the building work is carried out at the time the work is done
• the principal builder of the building work
• the developer as defined by the Unit Titles Act 2001 for a units plan, and
• any other person prescribed by regulation.

Part 5 of the Act provides the registrar with the ability to issue rectification orders, stop work orders and undertakings against a property developer. This includes licensed property developers and those that meet the above definition.

A regulation may also exclude a person from the definition of a property developer.

Proposed regulatory action

The registrar may propose to take regulatory action against a licensee (see section 34 (1) of the Act).

Rating entity

An entity approved to prepare rating reports. A list of approved rating entities is available on the City and Environment Directorate website .

Rating report

A written report prepared by a rating entity that assesses the operational and financial capacity of the applicant or licensee to undertake residential development activities and that satisfies any other requirement prescribed by regulation.

A rating report is required to be submitted as part of the licence application.

Registrar

The registrar for the Act is the Construction Occupations Registrar.

Regulatory action

Against a licensee, means:

• reprimanding the licensee
• directing a licensee to undergo various assessments
• directing a licensee to undertake training
• imposing or amending a condition of a licensee’s licence
• suspending a licensee’s licence
• cancelling a licence (see section 32 of the Act).

Residential building work

Building work in relation a regulated residential building but does not include building work excluded by regulation.

Regulated residential building

Is a class 1 or class 2 building, or a building that contains class 2 building, constructed as part of a project to construct 3 or more dwellings but does not include a building excluded by regulation.

Examples

1. Eddy and Ann engage Darcy Constructions to demolish their house and replace it with 2 duplex‑style houses. Five years later they engage Darcy Constructions to construct a smaller house in the backyard. None of the houses are regulated residential buildings.
2. Poppy Projects buys a large infill site. They construct 20 detached class 1 houses on the site as part of a development project. The houses are sold off‑the‑plan and constructed over 2 years. Each house is a regulated residential building.
3. Vivienne Developments buys 6 small adjoining blocks in a greenfield suburb. They engage an architect, builder and other professionals to construct matching class 1 row houses.

Residential development activities

Includes undertaking residential work or arranging for residential building work to be undertaken; and marketing and selling regulated residential buildings including off the plan.

Respondent

The licensed property developer the complaint is about.

Serious defects

See section 47 of the Act.

Show cause notice

A written notice given to a licensee that states:

• the grounds on which the registrar considers regulatory action may be taken against a licensee
• the details of the proposed regulatory action
• that the licensee may give the registrar a written submission about the proposed regulatory action (see section 34 (2) of the Act).

Suitable person

In deciding whether an applicant for a licence is a suitable person to hold the licence, the registrar must consider the following for an applicant:

• Your character
• Any history of compliance (for example if you have had regulatory action taken against yourself or been convicted of an offence against a law that affects your suitability to undertake residential development activities)
• If you are able to demonstrate an ability to comply with the Act or relevant laws
• Your operational and financial capacity to be a property developer (e.g. past performance and credit history)
• If you meet the competency requirements (if any)
• If you have had a licence cancelled or suspended.

If you are applying for a licence as a corporation, the Registrar may also look at the following:

• Any associated entities or key persons
• Former associated entities or key persons.

If you are applying for a licence as an individual, the Registrar will also look at the following:

• If you have been insolvent
• If you were an executive officer of a corporation within 2 years before the corporation went into administration, receivership or liquidation
• If you have been disqualified from managing a corporation.

See section 10 of the Act.