What permits, licences and/or other documents do parties need before starting work, during work and after completion? Are there any penalties for non-compliance?
Construction (2nd edition)
Licensing requirements vary significantly between jurisdictions. All states require licences for specific trades such as electrical, gas and plumbing work.
In respect of building, New South Wales contractors require licences only for residential building work. In Tasmania and South Australia, licences are required to carry out both residential and commercial building work. Queensland has a comprehensive licencing system, which licences contractors for particular types of work subject to caps on the size of project for which the contractor is licenced. In some states, owners also need to ensure that the party they are contracting with holds the necessary licences to carry out building work.
A breach of licensing requirements is an offence, with legislation in most jurisdictions imposing fines for both individuals and corporations, and in some cases unlicensed contractors are prevented from exercising their contractual rights (i.e. recovering payment).
In principle, for all types of construction projects as well as for certain modifications to existing buildings a building permit (or notification) is required and starting work without such a permit (or notification) is subject to administrative and criminal sanctions in all of the 3 Belgian regions.
In case of significant impact on the environment, an environmental permit is also required.
Some commercial development projects also require a so-called socio-economical permit. Such a permit will be granted only if certain conditions (i.a. impact on local employment, land use, …) are met/respected.
Examples of licenses/permits that are required to be applied for are as follows:
- before starting work: construction land use permit, permit for a planned construction project, construction permit;
- during work: no special licences required;
- after completion: EIA acceptance, registration of acceptance and inspection.
Penalties for non-compliance generally include a fine, suspension of construction, ordered restoration and refusal on acceptance and inspection registration.
As already mentioned, before the commencement of construction works on the site, the planning and zoning permit has to be obtained, as well as the construction permit. Construction without the required construction permit makes the construction activity illegal and the construction inspector is authorised to a issue a decision ordering the employer, i.e. the owner, to remove the building.
Upon completion of the construction, the relevant public authority must perform tests to confirm whether the building has been built in accordance with the construction permit. If the building complies, the use permit has to be issued permitting the use of the building for the intended purpose.
The law provides for misdemeanor, and in certain cases also criminal, liability (criminal offence of illegal construction, criminal offence of hazardous execution of construction works) for actions contrary to the applicable provisions.
Non-EU citizens need a residence permit before starting work in Germany. Other permits may be needed depending on the type of work (e.g. health certificate in medical or in gastronomy professions). Penalties for non- compliance can be severe.
For the permits/licences required within the context of a construction project, please refer to Questions 2, 3b and 3c above. As regards the penalties imposed in case of non-compliance with such administrative requirements, severe sanctions apply both under administrative and criminal law. For instance, non-compliance with the environmental legislation (Art. 21 of Law 4014/2011) governing the requirements, shall lead to administrative liability, without prejudice to any other applicable civil or criminal sanctions. Likewise, as per Law 4495/2017, failure to comply with the prescribed building requirements, renders the respective construction unlawful and might incur the imposition of fines, prohibition of transfer, the issue of a demolition order, as well as criminal liability established under any applicable law.
Works can usually not be initiated before issuance and entry into force of the relevant construction permit. During work, a complementary construction permit may be required if amendments are made to the initial construction project and, in the absence of any changes, compliance with the permit as well as with regulations for construction works apply (schedules, work during week days, no night work except if authorized, etc.) After completion of the work, depending on the Canton/municipality, a formal completion acceptance confirmation by the competent authority, the delivery of an occupancy permit and/or the certification by an architect is required. If the construction project does not comply with the construction permit, the main risk is that the non-authorised part of the project has to be removed and/or altered and that a fine is being imposed.
Permit and licensing requirements vary by state and even locality (i.e., county, city, municipality, etc.). Permits are required to ensure that construction projects satisfy local, state and federal codes and meet minimum health and safety requirements. Permits are required for any new construction and are also typically required for alternations to existing buildings. For example, any alterantion to structural, plumbing, mechanical, or electrical systems typically require a permit. Owners are required to obtain proper permits prior to the start of construction. Owners can, however, delegate this duty to a construction manager, program manager, general contractor, design-builder or other authorized-agent.
The permit process in many U.S. jurisdictions overlaps considerably with land use regulations. Many U.S. jurisdictions have strict zoning requirements that dictate the allowable uses for commercial property. The first step in any construction project is to review applicable zoning requirements to ensure that the zoning for the project allows for the anticipated commercial use. Once land use requirements have been satisfied, most U.S. jurisdictions require a pre-plan review where the applicable building or regulatory agency reviews the anticipated development plan and identifies items that may need to be modified before final construction drawings are submitted for review and permitting. Once that process has successfully concluded, a building permit / construction permit / commercial permit is issued that allows construction to commence.
In addition to obtaining a construction permit for the project, many jurisdictions also require additional trade-specific permits. For example, additional permits may be required for mechanical, electrical and plumbing trades. Again, an owner is typically required to obtain such permits, but this duty can be delegated downstream to an authorized agent or even to a trade-specific subcontractor.
Additional permits may also be required under federal and state environmental laws. For example, the Clean Water Act requires that an owner obtain a permit for the discharge of storm water if construction will disturb one or more acres of land. If the project will require discharge of dredged materials (e.g., in connection with the construction of an in-water structure or marine wharf) a permit is required by Section 404 of the Clean Water Act. Depending on the type of Project, permits may also be required under the Clean Air Act as part of an effort to reduce pollution.
Once a permit is issued, inspections will be required at different milestones insure compliance with permit conditions and applicable building codes. Such inspections must be coordinated with the local permitting agency, and approval is typically required before further construction can proceed. Once the project is complete a final inspection will be required to obtain a use and occupancy permit. The project cannot be used for its intended purpose until a use and occupancy permit is awarded by the permitting agency.
Depending upon the nature of the project, additional permits may be required. For example, permits may be required from the Federal Department of Transportation and/or the local transit authority if the project will have any significant impact on federal, state or local roadways. In addition, permits will likely be required in order to tie the project into municipal sewer and water lines. Storm water prevention permits and other sedimentation and erosion control permits may also be required.
Many states and localities also require contractors to obtain contractors licenses prior to performing construction work in that locality. Some U.S. jurisdictions also require that joint ventures obtain licenses prior to contracting for work. Likewise, professional engineers and architects are required to be licensed in any state where work will be performed. A professional engineer or architect typically cannot affix his or her seal to drawings for use in a construction project unless that professional engineer is licensed in the state where the work is to be performed. It must also be noted that the specific requirements placed upon professional engineers and architects differ considerably among the various states.
Failure to obtain proper permits and licenses can have devastating consequences for the owner and the project. If a permit is not obtained, the project can be shut down by the local building authority until proper permits are approved. If work performed without a permit fails to comply with applicable building codes, the local permitting agency can order the work to be demolished. In addition, failure to comply with zoning requirements can result in substantial fines and potentially having to demolish any work that does not comply with local land use laws.
It is also imperative that appropriate licenses are obtained. In most jurisdictions, unlicensed contractors and design professional are unable to get the permits required to commence construction work. If work is commenced, however, many jurisdictions prohibit unlicensed contractors and professional engineers from enforcing claims for unpaid work performed without a license. As a result, unlicensed contractors and professional engineers have no recourse for non-payment if services are provided in a jurisdiction where a license is required. In addition, some jurisdictions, like California, prohibit an unlicensed contractor or engineer from enforcing a binding arbitration clause.
A building permit is required for a construction project. Where a construction project is carried out without a building permit, the public authority may order the project discontinued and may impose sanctions. After completion of the construction project the client has to submit a notification of completion
Broadly speaking, the construction of any building and street is illegal, unless a building permit is issued by the Local Authority. This is enshrined by the Article 3 of the Law.
In order for any development, or in fact any material change of use to take place, these are the following steps required:
- First an application needs to be submitted to the competent Planning Authority, which should assess whether the proposed development is compatible with the provisions of the Town and Country Planning Legislation, the provisions of the relevant published Development Plan and any other material consideration.
- After the issuing of the planning permit, an application needs to be submitted to the designated Building Authority, and after its examination a building permit is granted.
- Once the building is finished, the Municipality/District Office/Town Planning Department is invited to check that it has been built in accordance with the town planning and building permits issued for its construction.
- Buildings are not always constructed in accordance with these town planning and building permits. In these situations, new applications must be made for a revised town planning permit (cover permit) and a revised building permit (cover building permit). Once the cover permits have been issued, the Municipality/District Office/Town Planning Department is invited once again to check that it is in order.
- Once the Municipality/District Office/Town Planning Department has inspected the building a certificate of final approval must be sought from the Building Committee.
- If a building forms part of a development, a division permit is sought. This enables the authorities to subdivide the building so that a title deed may be issued.
- Once a division permit has been issued, a certificate of approval of the division permit is required. This follows a similar procedure to that of the certificate of final approval: through a civil engineer and the Building Committee.
Illegal building is a serious and widespread problem. If the property developer has built illegally, commits a criminal offence and, independently of the imposition of an administrative fine, the authorities have the power to issue a “Demolition Order” requiring the illegal building or any part thereof to be pulled down within a period of two months, unless, in the meantime, a permit is obtained from the relevant authority.
In addition of the Licenses of the entrepreneurship, mentioned previously on item 3.b, there are several permits which may be required by different public officials depending on the type and needs of each Construction Project. All permits imply in penalties and other sanctions if not obtained. However, the amounts and eventual sanctions will vary by entity and by relevance. Here are some examples of permits usually required in Brazil:
- Federal Technical Registry at IBAMA - Certificate of company regularity;
- Effluent Treatment Station Operation License;
- Permit of operation of ambulatory and / or nursery;
- Permit to Use Thermonebulization for Mosquito Control;
- Operation License Concrete Plant, Material Site, Industrial Plants and Central Construction;
- Office operating license and cafeteria;
- License to use and carry chainsaw (when necessary);
- Grant for Water Resources (when necessary);
- Authorization for mineral extraction and / or mining right (when necessary);
- Road Transport License for dangerous goods and special loads (when applicable);
- License for use and storage of hazardous materials (fuels / service station, chemicals, flammable products);
- Operating permit for use, handling and storage of construction materials (miscellaneous);
- Authorization for the Deposit of Solid, Organic and Non-Recyclable Waste;
- Import and transport licenses.
Depending on the specifics of a project, one or all of the following may be required:
- Planning Permission.
- If the Building Control (Amendment) Regulations 2014 apply, a Commencement Notice (and all prescribed accompanying documents), Fire Safety Certificate, Disability Access Certificate, Certificate of Compliance of Completion.
- Environmental licences, such as an Industrial Emissions licence or a waste licence, may be required before the project can become operational.
- Crane over sail licence.
The permits, licences and/or documents needed will depend on the State of the project. However, the common licenses and permits are, including but not limited: license for construction, use of land (commercial use, residential use, industrial use, etc.), safety regulations, environmental regulations, and labour and union provisions.
To not comply with the licenses and permits may address to the closing of the construction, fines and several administrative inspections and/or constant requirements of extra/additional information or documentation.
Parties typically need planning permission; Building Regulations compliance; approval from an inspector appointed under the Building Regulations; and, if required, environmental permits. Further licences and permits may be required if works will affect public areas, such as roads.
Public bodies (and those exercising public functions, such as utilities) must follow EU public procurement directives and principles.
There are various penalties for breach or failure to comply with permissions and licences, including removal or alteration of any work for contravention of any regulation or other provision of the Building Act 1984. Sanctions for breaches of planning control include criminal prosecution punishable by fine and requiring land to be restored to the condition it was in before the unauthorised development occurred.
Before executing a building it is required to obtain a building license, granted by the City Council, which requires the presentation of a basic project. Such project is analyzed by the City Council and verifies that it complies with the urban planning of the municipality.
With the presentation of the works license application, the municipal tax on Constructions, Installations and Works is paid to the City Council, whose rate is set by each Municipality -not exceeding - 4 %, of the real and effective cost of the construction.
Once the residential construction work is completed, in order to occupy it, it is necessary to obtain the first occupancy license, in which the City Council verifies that the building complies with what is authorized in the license.
In the event that a building without a license is executed, the City Council proceeds to the opening of two files: on one hand a sanctioning file in order to impose a sanction, and on the other hand urbanization town planning legalization, with which the owner of the construction is required to request the license.
Every construction operation requires a construction permit. In addition to that, if the construction operation may, potentially, have adverse effects to the environment, then obtaining a ‘positive environmental impact assessment’ decision is necessary. Unless this ‘positive environmental impact assessment’ is obtained, construction permit will not be issued. If a construction starts without a construction permit (or is conducted in a manner not compliant with the construction permit and its appendices), then the authorities will affix seals to the entrances of the construction site. It is a criminal offence to remove these seals. Within one month as from the date on which the seals are affixed, the building owner is required to acquire a construction permit. Otherwise, the building will be demolished by the relevant municipality or governorship and the costs of doing so will be requested from the building owner. After the construction is completed, an occupancy permit needs to be acquired for being able to use the constructed building. Other than those major permits mentioned above, there are also a number of other permits required to obtained by the contractors and employers during the execution of the construction works.
Again, in terms of the CIDB Act, all contractors who wish to tender for construction works for a public sector entity must:
(i) hold a valid CIDB registration certificate, and
(ii) be registered with the NHBRC should they wish to construct residential property.
As set out in question 3, the NBRBAS Act provides that all building plans must be approved by the relevant local authority [Section 4(1) of the NBRBAS Act]. In addition, the National Building Regulations promulgated under the NBRBAS Act set out the documentation that must be submitted to the local authority before commencement of a construction project. By way of example, the following documents are required:
(i) a site plan;
(ii) layout drawings;
(iii) a fire installation drawing;
(iv) drainage installation drawings;
(v) particulars of any existing building or structure that is going to be demolished and the necessary approval for the demolition work from the local authority; and
(vi) any other plans and particulars that the local authority requires.
Any person found in contravention of the NBRBAS Act may be found guilty of an offence and shall be liable to pay a fine.
Additionally, permits are required for the transportation of abnormal loads on public roads in terms of the regulations promulgated under the National Road Traffic Act 93 of 1996.
In addition to the above certificates and permits, the OH&S Act provides that inspections are required to be carried out and certificates issued during a construction project.
The NBRBAS Act prescribes that after a contractor has erected a building it must obtain a certificate of occupancy from the local authority with jurisdiction which indicates that:
(i) a building has been erected in accordance with the approved building plans; and
(ii) that such building is in compliance with the related health and safety requirements [Section 14(1) of the NBRBAS Act].
Any contractor that does not obtain a certificate of occupancy in terms of the NBRBAS Act may be found guilty of an offence and face imprisonment or payment of a fine.
In addition, the Electrical Installation Regulations promulgated under the OH&S Act require contractors to obtain a certificate of competency for the electrical installations performed in construction projects which must be accompanied by a test report in the format approved by the chief inspector [Regulation 7(1) of the Electrical Installation Regulations].
A wide variety of permits / licenses may apply to a construction project in France. In practice, a case by case verification will be necessary for each specific project to identify the permits / licenses will be required.
Among the most common permits/ licenses (this list not being exhaustive), we can quote:
- Town planning authorizations: the most common authorizations are the building permit, which is applicable for most construction projects, and the prior declaration of work, which applies for small projects involving limited works. For large projects, a public inquiry may have to be carry out as a preliminary step prior to the filing of the building permit application;
- Environmental authorizations: ICPE authorizations may apply depending on the type of activity that will be carried out. Other specific authorizations as the case may be can also be applicable depending on the type of project and its impact on the environment;
- Premises receiving public (Etablissements Recevant du Public or ERP): specific authorizations are necessary for projects with premises opened to the public;
- Retail: a specific authorization is required for projects involving the creation of retail surface areas exceeding certain thresholds;
- Ile de France region (agrément pour creation de bureaux, commerces et entrepôts en Ile de France): a specific authorisation is necessary in order to create or expand offices, commercial areas or warehouse surface areas within the Ile de France region exceeding certain thresholds;
- Residential: specific authorizations are necessary in order to change residential surface areas into another type of use (offices, hotels etc.) in certain Cities in France;
- Work site: specific permits have to be obtained if it is necessary to occupy part of public land (such as walkways / roads) or to install a crane for the purpose of the carrying out of the works.
Non-compliance can constitute a criminal offence, subject to criminal law sanctions (fines, and in some cases, imprisonment). Other sanctions can also apply, including for instance the obligation to stop the operation of the building, the potential demolition of the building in some limited cases, the impossibility to obtain a new permit to proceed with other works or to rebuild in case of a destruction of the construction for a casualty. Also, in case of a damage caused to a third party by a non-compliance, such third party can also request an indemnification from the responsible party.
In addition to the permit/licenses, numerous declarations / statements will have to be filed within the authorities during the project by the different parties to the construction project, for the employment of workers, the start and the completion of the works, taxes, etc.
The authorization of a third party is also often necessary, depending on the specific constraints of the project (authorization of the landlord if the site is leased by the project owner, authorization from the neighbours / co-ownership, authorization of the architect of the existing building in case of a renovation project, etc.).
Most construction projects require a building, demolition or ground permit. If a permit is not needed, it is often necessary to notify the Municipal Building Committee of the project. Before beginning works that require a permit or notification, the parties must await a starting clearance from the Municipal Building Committee. Additionally, works that need a starting clearance also require final clearance before the premises on which the works took place may be used. If the legal framework is not complied with, the owner, the developer, the failing or gaining party may be subject to a substantial construction sanction fee. The calculation of the construction sanction fee is based on the area affected by the works and is limited to 50 price base amounts (in year 2019 one price base amount amounts to SEK 46,500).
Permits are generally not required in order for a contractor to perform work, but for some work (e.g. electrical work and plumbing work) an authorization is required.
The Building Act regulates the circumstances under which the employer (or the turnkey-contractor) must apply for a building permit (to start work) and an occupancy permit (needed for occupation). Permits are not required for all construction work, but the work must be executed in accordance with the building regulations, even if permits are not required.
A building permit does not include a technical verification of the project, and although a building permit has been issued, non-compliance with the act or the building regulations may still result in the refusal of an occupancy permit.
- Various permits must be obtained for different stages and aspects of construction projects. These include building permits, approval of construction plans, and use permits. Failure to comply with the relevant requirements can result in fines and the threat of imprisonment.
- For example, in the case of the construction of buildings, before commencing construction, building permits must be obtained from the relevant administrative district as required under Article 11 of the Building Act, subject to any exceptions for particular types of construction, such as the ones listed in Article 14 of the Building Act (which include extensions, repairs, etc., of limited sizes, as well as the construction of buildings below a certain size in specially-zoned areas).
- Once a building permit is issued, the sponsors of a project will have various reporting and inspection obligations as they commence and carry out construction.
- Upon completion, a use permit/temporary use permit is required to use a building (Article 22 of the Building Act).
- Changes in design or intended use could trigger an obligation to report the change or to obtain a permit, depending on the magnitude of the change (Article 19 of Building Act).
- Projects related to specific industries may require additional permits. For example, nuclear power projects will require a permit from the Nuclear Safety and Security Commission.