Guidance for architects and building surveyors regarding building permits in which the architect is named as builder

In some cases, the Building Act 1993 (Vic) (BA) permits building permits to be issued naming an architect as the builder, rather than a registered building practitioner. This guidance assists relevant building surveyors (RBSs) and architects to understand the limited circumstances in which an architect may be named as the builder on a building permit. It also sets out other obligations and relevant matters that apply when an architect is named as builder on a building permit.

Who is an ‘architect’ for the purpose of the BA?

Under the Architects Act 1991 (Vic) (AA) only persons who have been registered by the Architects Registration Board of Victoria (ARBV) under the AA can use the title of ‘architect’ in Victoria. Persons who have a degree or other qualifications in architecture or design, but who are not registered with ARBV are not architects and cannot use that title or have it applied to them. Likewise, people carrying out drafting or design work but who aren’t registered with ARBV are not architects.

Can a company be an architect?

Under the AA, only individual persons can be architects. Companies and other corporate entities cannot be architects. The AA provides a process for approval of certain companies to operate architectural businesses, subject to meeting certain requirements, including that at least one director of the company must be a registered architect. These companies are described in the AA as ‘approved companies’. However, approved companies are not ‘architects’ under the AA.

When can an architect be named as the builder on a building permit?

An architect may be named as the builder on a building permit only in limited circumstances. The table below sets out who can be named as a builder on a building permit for building work, depending on the type of work being carried out and the value of that work:

The requirements in sections 24B and 25B make clear that the circumstances in which an architect can be named as the builder are limited. This is particularly so for Domestic Building Work.

What is ‘Domestic Building Work’?

The definition of Domestic Building Work in the BA follows the definition in the Domestic Building Contracts Act 1985 (Vic) (DBCA). The DBCA definition covers the construction, alteration, extension, repair or demolition of ‘homes’. ‘Homes’ are defined to include any residential premises. This includes:

• standard residential dwellings;
• apartment buildings;
• specialist disability accommodation;[1] and
• other types of homes.

There are strict requirements that apply in the BA to Domestic Building Work, in order to protect consumers who may purchase a home that has recently been constructed.

An RBS must be able to satisfy themselves that each of those criteria are met before they can issue a building permit on that basis.

Identifying whether the work is being carried out under a Major Domestic Building Contract

The definition of a Major Domestic Building Contract in the BA follows the definition in the DBCA. The DBCA provides that a Major Domestic Building Contract is any contract for the carrying out of Domestic Building Work where the amount the builder will receive for carrying out the work is more than $10,000. This includes where the work is split between more than one contract but the total paid to the builder for the work exceeds $10,000.

Identifying the owner of land

To identify the owner of the land, the RBS should have a current title search which shows the owner of the land. The RBS’ ability to name an architect as a builder pursuant to either of section 24B(3) or sections 24B(6) and 25B (read together), is limited to where the individual architect is named on the title.

Identifying whether the person is registered as an architect under the AA

An RBS must also satisfy themselves that the person in question is an architect registered under the AA, prior to naming them on a building permit.

This can easily be done by checking the online register of architects maintained by ARBV on its website: https://www.arbv.vic.gov.au/find-architect

Architects who are registered under the AA include architects who become registered in Victoria under mutual recognition or who are taken to be registered in Victoria under automatic mutual recognition, pursuant to the Mutual Recognition Act 1992 (Vic). Architects taken to be registered under automatic mutual recognition are also able to be identified using the above website link.

Additional requirements for architects to be aware of

Architects should be aware that there are additional requirements that apply to them, should they be named as the builder on a building permit for Domestic Building Work not being carried out under a Major Domestic Building Contract.

Under section 137C of the BA, should an architect sell any home or apartment constructed by them under a permit issued in their name, there are warranties that apply to the building work, in relation to workmanship, the quality and suitability of materials used and the compliance of the building work with applicable laws. Those warranties mirror those that exist in the Domestic Building Contracts Act 1995 (Vic) for Domestic Building Work carried out by a builder under a Major Domestic Building Contract.

Insurance requirements when an architect is named as a builder on a permit

The architect is not required to obtain domestic building warranty insurance when named as a builder on a permit. The requirement to obtain domestic building warranty insurance that applies under Part 9 of the BA to builders carrying out Domestic Building Work only applies where that work is carried out under a Major Domestic Building Contract. An architect can only be named as the builder for Domestic Building Work where the work is not being carried out under a Major Domestic Building Contract, so the requirement for insurance does not apply to them.

Will professional indemnity insurance cover work by an architect where they are named on a building permit?

All architects must maintain professional indemnity insurance (PII) as a requirement of their ongoing registration as an architect. However, architects should not assume that their PII will cover them if they are named on a building permit as builder for a project. PII will usually cover liability arising from professional services performed by an architect for others.

If the project in question is Domestic Building Work on land owned by the architect and is not carried out under a Major Domestic Building Contract, then liabilities that may arise to others by the architect may fall outside the scope of the architect’s PII.

This may be different, if the project in question is not Domestic Building Work and the architect is named as builder under section 24B(3) in circumstances where the architect is named as builder in the course of providing services to another, then this may be covered by the architect’s PII, depending on the terms of the policy.

Potential consequences for architects and RBS’s where the BA and the AA are not complied with in relation to the naming of an architect on a permit

The provisions of the BA which permit an architect to be named as builder are designed to ensure that this only occurs in appropriate circumstances and that there are consumer protections which operate where required. There may be significant consequences for both RBSs and architects where an architect is named as builder on a building permit when they should not have been. The potential consequences may include:

1. Disciplinary proceedings for either or both of the RBS and the architect;
2. Prosecution where an offence provision of the BA has been breached (such as section 137E of the BA);
3. Individual civil liability for loss and damage arising from any defects in the building work or for other disputes arising from the project; and
4. Lack of insurance coverage for loss or liability arising out of the project, as an insurer may deny coverage where the building permit was not correctly issued and relevant laws were not complied with.