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Melbourne 3000
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Protection Works

Protection Works and Protection Works Insurance

What are Protection Works?

protection works with umbrella.jpgProtection Works. What are they? What are their implications for property owners or property developers, and what implications do they have for builders and adjoining owners?

Few disputes in the construction world lead to such passionate confrontations or such degrees of confusion between owners, adjoining owners and insurance providers alike. The Commandment to ‘love thy neighbour’ is regularly thrown out the door when an owner’s real property asset is at stake, and the Commandment ‘thou shall not kill’ occasionally becomes a prospect as well. Perhaps the passion of these disputes reflects the degree of confusion present in this discreet and little understood, but yet vital area of building law.

Protection Works are enshrined in Part 7 of the Building Act 1993 (Victoria). In layman’s terms Part 7 is aimed at regulating the process that kicks off when the Relevant Building Surveyor for a particular building project deems that Protection Works are required for an Adjoining Property where works on the Subject Land may affect the Adjoining Property.

This area of law essentially involves the requirements for an Owner undertaking building works to ensure that the property of their neighbour is not damaged by the carrying out of the building works.

What are the Responsibilities of Owners Regarding Protection of Adjoining Property:

Requirement to Carry out Protection Works:

The Building Regulations 2006 set out in Regulation 602 that an owner undertaking building works is required to carry out Protection Works if the Relevant Building Surveyor so requires. An owner can however avoid this requirement in a situation where the proposed building works will not require intrusion into, over or under the adjoining owner’s airspace. In this situation the Works must be certified as compliant with the Act by the project’s engineer, and by a further independent engineer. The Relevant Building Surveyor must also be satisfied that the Works will not damage or adversely affect the stability of the adjoining property.

Responsibilities where Protection Works are Required:

Assuming an owner is required to carry out Protection Works, under section 84 of the Act, an owner must serve notice of the proposed building work on the Relevant Building Surveyor and the Adjoining Owner giving details of the proposed Protection Works.

Under section 85 of the Act, the adjoining owner has 14 days to act on this notice, and may disagree with the proposed Protection Works, or require further information from the owner, so that the Relevant Building Surveyor can consider the proposal. Failure to dispute the proposed Protection Works within 14 days will mean that the adjoining owner is deemed to have agreed, and loses the right to dispute them.

An adjoining owner who wishes to dispute the proposed Protection Works must notify the owner and the Relevant Building Surveyor. The Relevant Building Surveyor must then under section 87 of the Act consider the appropriateness of the proposed Works, and make a determination.

The owner will breach section 88 of the Act if they begin to carry out Protection Works before the Adjoining Owner has agreed, has been deemed to agree, or before the Relevant Building Surveyor has resolved a dispute over the proposed Works. The Protection Works carried out must always be in accordance with the approved proposal. Breaches under section 88 of the Act can attract significant maximum penalties.

An Owner is required to make a survey, also known as a ‘Dilapidation Report’ regarding the adjoining owner’s property before commencement of any Protection Works, and record any existing cracks and defects in the adjoining property. This needs to be signed by both parties, and should not be taken lightly, as the survey will be admissible as evidence of the adjoining property’s condition if there is a later dispute with the adjoining owner.

What are the Responsibilities of Adjoining Owners?

Under section 95 of the Act, the owner is allowed a right to enter the adjoining property between 8am to 6pm to conduct a Dilapidation Report, and subsequently for the purposes of carrying out the approved Protection Works. The owner has a further right to remove furniture which would obstruct carrying out of the works. These rights are only limited by the requirement not to cause damage when entering adjoining property, and the requirement to give at least 24 hours notice. The adjoining owner will commit an offence under s96 of the Act if they prohibit or hinder the work of the owner exercising these rights.

Expenses Incurred by Adjoining Owner:

The owner is liable to pay the adjoining owner for all costs and expenses incurred in assessing the proposed Protection Works, and in supervising their carrying out. These costs must be necessarily incurred, and agreed to by the owner. In the event of a dispute regarding whether these costs have been necessarily incurred, the Building Appeals Board will make a determination.

Under section 98 of the Act, an owner must also compensate an adjoining owner for inconvenience, loss or damage suffered by the adjoining owner in connection with the carrying out of the Protection Works.

Emergency Procedures:

The Building Commission has the power to order Emergency Protection Works upon the application of an owner or adjoining owner.

Information Providing Obligations of Relevant Building Surveyor:

The Relevant Building Surveyor is required under section 92 of the Act to provide any plans, drawings or specifications for the proposed building works to the adjoining owner upon request.

What is Protection Works Insurance?

One key area of Protection Works which is little understood by Owners, Adjoining Owners and Insurers alike, and an area which an Owner of subject land must ensure that they thoroughly understand, is Protection Works Insurance. Protection Works Insurance is a requirement under Section 93 of the Building Act to ensure that a contract of insurance is in force, covering the Protection Works for the Adjoining Property.

Not only must Owners be aware of Protection Works Insurance and ensure compliance with the Act, Adjoining Owners and Adjoining Occupiers must also understand the rights afforded to them under this legislation, not only when a Protection Works Notice is served on them, but when it becomes apparent that building work or development is taking place on land that adjoins their property. Not all building work on subject land will require Protection Works, and the Relevant Building Surveyor may issue a Building Permit for the Owner to carry out building work that does not affect the Adjoining Property.

However, building work that falls within the scope of the Protection Works Notice is not permitted to be carried out until appropriate Protection Works Insurance is in place. This can manifest in a situation where a flurry of work is taking place on a subject site, which may or may not pertain to the Protection Works Notice, resulting in worried and confused Adjoining Owners. The best course of action is for an Adjoining Owner to take note of the relevant sections of the Act and make the appropriate enquiries. If matters do not add up, then legal advice should be sought immediately to preserve the Adjoining Owners position against potential loss and damage from the Protection Works.

Section 93 of the Act is as follows:

Section 93. Owner to Arrange Insurance cover.

  1. Before any protection work is commenced in respect of an adjoining property, an owner must ensure that a contract of insurance is in force, in accordance with this section, against-
  2. Damage by the proposed protection work to the adjoining property; and
  3. Any liabilities likely to be incurred to adjoining occupiers and members of the public during the carrying out of the building work and for a period of 12 months after that building work is completed.
  4. The contract of insurance must be entered into with an insurer and for an amount-
  5. Agreed to by the Owner and the Adjoining Owner; or
  6. In the event of a dispute, determined by the Building Appeals Board under Part 10.
  7. The Owner must lodge a copy of the contract of insurance with the Adjoining Owner before the commencement of the protection work.
  8. The Owner must ensure that the contract of insurance is renewed or extended as often as may be necessary during the carrying out of the building work and for 12 months after that work is completed.
  9. The Owner must lodge a copy of a document evidencing the renewal or extension of the contract of insurance with the Adjoining Owner as soon as it is practicable to do so after the renewal or extension.

Insurers should also take careful note of the above section when providing policies to Owners as Protection Works Insurance is a highly specialised form of insurance, pertaining to potential loss and damage likely to be suffered by an Adjoining Owner, which is distinct from Builders Insurance.

Some key issues regarding Protection Works Insurance that are appropriate to note are that:

  • It is not the responsibility of the Adjoining Owner to ensure that appropriate Protection Works Insurance is in place, and that it is the responsibility of the Owner;
  • The Protection Works Insurance must provide cover for any liabilities likely to be incurred by the Adjoining Owner during the building work and for a period of 12 months after the building work is completed;
  • The Insurance is to be taken out by the Owner and not their Builder, as Protection Works Insurance is an entirely different creature from Building Insurance;
  • The Insurance policy should denote values of Adjoining Properties. These values must be agreed to by the Adjoining Owner;
  • Section 93 requires that any damage to the Adjoining Owners property, whether arising indirectly or directly from the Protection Works is required to be covered by the Protection Works Insurance.

Written by past employees Alex Milne & Serge Mendis, Lovegrove Solicitors