The Australian Institute of Building Surveyors (AIBS) has warned that inappropriate contracting practices in Victoria’s building industry are eroding independent regulatory oversight, with members reporting that Relevant Building Surveyors (RBSs) are being asked to sign consultant agreements that make them accountable to the builders whose work they regulate.
The peak body is calling on Victoria’s building regulators to end the practice, saying the process Victorians rely on to keep their homes, schools and hospitals safe is being compromised.
AIBS wants definitive guidance confirming that the building permit applicant must sign the RBS’s own terms of engagement for their statutory services.
It says RBSs must not be required to sign design consultancy, Design and Construct (D&C) or other project consultant agreements that impose obligations inconsistent with their statutory functions or compromise their independence.
Despite a decade of continuous advocacy, the institute says industry practice continues to breach the Victorian Building Surveyors Code of Conduct.
The Code requires building surveyors to act independently and prohibits agreements that compromise that independence.
It also requires the RBS contract to be with the applicant and never novated to the builder.
AIBS National President Wayne Liddy said government procurement practices were among the most concerning.
He said the public sector was helping to normalise behaviour that the wider industry then follows.
Liddy said: “A Relevant Building Surveyor is not there to coordinate the design of the building, meet the builder’s program or deliver a predetermined approval outcome.”
Members report being issued agreements drafted for architects, engineers and other designers.
These include fees that can be withheld until a permit is issued, broad indemnities, exclusion of proportionate liability legislation, and program obligations that assume the RBS controls design or construction.
In one member example, the additional insurance needed to cover a full indemnity was priced at approximately $30,000 per month over an 18-month project.
Liddy also warned that the practice is aggravating workforce pressures in the profession, with practitioners forced to accept inappropriate liability, spend substantial time negotiating unsuitable contracts or risk losing work.
Liddy said the issue was not D&C delivery itself: “We are not objecting to building surveyors working on D&C projects, but to the RBS being contractually subordinated to the builder whose work they regulate.”
AIBS is urging the Office of the State Building Surveyor and the Building and Plumbing Commission to issue definitive guidance on RBS engagement and enforce existing Code of Conduct requirements.
It also wants a dedicated RBS engagement agreement, or minimum mandatory terms, developed or endorsed, and confirmation that an RBS must not be engaged by, novated to, or contractually subordinated to a builder.
A targeted audit of RBS engagement agreements is also sought.
The institute is also proposing that regulators engage with government procurers, developers, builders, insurers and legal advisers to amend standard contract templates at the source, rather than requiring repeated project-by-project negotiation.
The institute says the stakes extend well beyond individual contracts to public confidence in the building permit system and the safety of everyday buildings.
Without clear regulatory direction, it argues, the current pressures on independence will likely persist across the industry.
AIBS already provides standard forms of agreement to its members and would welcome the opportunity to work with regulators on a model agreement that protects the independence of Victoria’s building surveyors.
