Episode 8

Regulation 233 and Practice Note EE-04, with Sean McDonnell of Red Textas

7 May 2026 · 87 minutes · Part 1 of 2 · Hosted by Brian Haines, Matthew Graham and Andrew Hooper

Summary

A building surveyor sits down with three energy assessors to work through the Victorian rules for renovations and additions — and the conversation quickly reaches the places where the regulations, the practice note and the National Construction Code do not line up.

Sean McDonnell of Red Textas explains what a relevant building surveyor actually checks, which turns out to be far less on energy than most assessors assume, and why an occupancy permit is not evidence that a building complies. From there the discussion goes deep into Regulation 233: where discretion exists, where it does not, and the band of project sizes that appears to fall through the middle with no discretion available at all.

The most consequential exchange concerns a single sentence in Practice Note EE-04 which says that where seven stars cannot be achieved, the highest rating possible should be demonstrated. Brian has projects that genuinely cannot reach seven. Sean cannot see how he could accept them.

Where Regulation 233 discretion applies

ScenarioNew workExisting dwellingExtension under 25% of floor areaDiscretion availableDiscretion available, including internal alterationsExtension 25–50%, alteration under 50%Must complyNot within scope — no discretion to require or excuse upgradesAlteration and extension over 50% volumeMust complyDiscretion available

In this episode

• 1:22Sean's background, and how Red Textas operates

• 5:28Five building surveyors, five answers to the same question

• 8:06What actually gets checked, and when

• 10:10How much work is still running under the previous code

• 12:45Whole of Home, and what builders are asked to declare

• 13:51Nobody is cross-checking the heating and cooling equipment

• 16:35An occupancy permit is not evidence of compliance

• 18:52When does a change become a material change?

• 21:09Illegal works, council enforcement and where energy ranks

• 25:02Should there be more mandatory inspections?

• 27:55Common errors on NatHERS certificates

• 29:56Which document takes precedence

• 35:32What a certificate does not show

• 37:56Accreditation, and reports from unaccredited assessors

• 42:04Are practice notes guidance or legislation?

• 45:38Regulation 233 read line by line

• 48:48The three scenarios, and the band with no discretion

• 53:35The formula, and whether it works beyond 25 per cent

• 1:04:58"The highest rating possible" — the clause that cannot work

• 1:11:02When the Building Appeals Board is the only option

• 1:20:56What counts as reasonable, in practice

• 1:24:16Cavity brick, insulation and the 35 millimetre cavity

Key points

The energy check is lighter than assessors imagine

Between the frame inspection and the final inspection there is generally nothing, and inspectors do not go into roof spaces at final. So very little of the energy provisions is physically verified. What the building surveyor relies on instead is documentation: declarations from the builder, glazing certificates, installation records. Sean is candid that Whole of Home is new enough that comparatively few completed houses have been through it yet, and that improving those checks is work in progress.

An occupancy permit means the building is suitable to occupy

This is the distinction that reframes the whole conversation. It is prescribed in the Act that issuing an occupancy permit or certificate of final inspection is not evidence that the building complies — only that it is suitable to occupy. So the responsibility for delivering what the energy report specified sits with the builder, and the building surveyor's checks do not extend to proving every aspect of compliance. As Sean puts it, the question of whether a building is unsuitable to occupy because the hot water service is slightly less efficient than specified is a difficult one to argue.

Where a change becomes a material change

Some deviation from the approved plans is inevitable, and the judgement about when it matters is genuinely open. There is also a procedural trap: an amendment can only be issued for proposed work, not for changes already built, so a surveyor arriving to find something altered cannot simply approve it retrospectively. The alternatives — a direction to fix, a building notice, a minor works order — can be heavy-handed for a minor change. Andrew's question about whether every deviation requires new documentation does not have a clean answer, and Brian's point lands: five items each worth a tenth of a star takes a seven star house to six and a half.

Illegal works are handled at council discretion

There is legislation for building notices and orders, but no prescribed process councils must follow, so approaches vary enormously. Some insist on onerous rectification, others take a lighter view. Energy tends not to rank highly against fire safety, setbacks and heights — councils deal with urgent life safety matters first, particularly where someone is sleeping in a converted space with no smoke alarms and no fire rated wall. Andrew has seen it both ways, including a surveyor requiring a roof to be lifted to prove insulation was installed.

More inspections would bring liability with them

Asked about the additional mandatory inspection points other countries use, Sean supports a post-services frame inspection — trades routinely hack out frames after the frame inspection has passed, particularly for mechanical ventilation. He is far more cautious about waterproofing, not because it does not matter but because inspecting it transfers liability to the surveyor for something that can be damaged by any trade walking over it afterwards. Energy has not historically been high on the government's list for new inspection points.

What a certificate does not show

The common errors Sean sees are material mismatches — floor type, or a wall construction changed after rating — and reports that lack a clear summary of requirements, particularly the additional elemental provisions that sit on top of the star rating. The deeper issue the team raise is that a certificate reflects a small fraction of the data in the file. A wall can be modelled as one construction and described as another, and there are hundreds of data points that never appear. Both Andrew and Matthew describe how they handle it: Andrew issues a covering letter listing every inclusion and states explicitly that the certificate takes precedence, and will not stamp plans that contradict it. Matthew issues a preliminary thermal specification first, so the drawing set can be built around it, then certifies once the information is on the drawings.

The middle band where nobody has discretion

Working through Regulation 233, three scenarios emerge. A small extension under 25 per cent leaves discretion available on both the new work and the existing dwelling. An alteration and extension over 50 per cent leaves discretion on the existing dwelling but not the new work. In between — an alteration under 50 per cent with an extension over 25 per cent — Sean cannot see where discretion exists at all. On a hundred square metre house with a thirty-five square metre addition, the new work must comply and the existing dwelling is simply not within scope. That is a problem for an assessor, who is rating the whole dwelling.

The formula, and whether it stretches

The practice note restricts the star rating formula to extensions under 25 per cent where the existing building is not being altered. Sean's view, reasoning from the mathematics rather than the wording, is that it should work between 25 and 50 per cent as well, provided you are not artificially lifting the total by crediting upgrades to the existing dwelling. He has taken the conservative route in practice and treated it as a performance solution, while saying he thinks there is a strong argument it need not be.

The sentence that cannot be complied with

Practice Note EE-04 says to rate the renovated house with sufficient improvements to the existing fabric to achieve seven stars, and that if seven stars cannot be achieved, the highest rating possible is to be demonstrated. Brian's objection is that there is no mechanism to use it: discretion under Regulation 233 cannot be applied to the new work, so a dwelling below seven stars cannot be signed off. Sean agrees — he does not know how he would quantify it or accept it, and does not believe it aligns with the regulations. Brian has had three or four such projects since NCC 2022, sent one to CSIRO who also could not get it to seven, and describes a five metre wide terrace with two storeys either side and no northern orientation as simply impossible. The only route is the Building Appeals Board, with the cost and delay that implies.

What "reasonable" looks like on a real job

Red Textas attach conditions to their Regulation 233 consents describing what is practical: if plasterboard is being removed from a stud wall, insulate it; if there is practical access to the roof space, insulate it. They do not expect a slab to be lifted. Floor plans often understate the true scope — a job that looks like it retains the existing house frequently arrives at inspection with all the plaster stripped — and owners are generally receptive, because they want those upgrades anyway during an extensive renovation. Solar can come into it too, with the caveat that an existing roof may not be structurally suitable, and Sean has seen councils issue notices requiring an engineer to assess a retrofitted array.

A cavity brick complication

Andrew raises a practical trap: the 35 millimetre cavity in a double brick wall exists so that water penetrating the outer leaf can drain and escape through weep holes. Filling that cavity with rigid board, or retrofitting a blown-in product, arguably compromises what the cavity is there to do and could render the wall non-compliant. Sean's reading is that the cavity would need to be widened with longer brick ties to maintain the 35 millimetres — which brings its own consequences for alignment, and which bricklayers are unlikely to welcome.

Documents referenced

• Building and Plumbing Commission VictoriaPublisher of the Victorian practice notes, including EE-04, and of Regulation 233 guidance.

• National Construction CodeAustralian Building Codes Board — the code itself, and the Housing Provisions referenced throughout.

• NatHERS publicationsTechnical Note, assessor handbook and scheme guidance material.

Transcript

Lightly edited for readability. Hesitations and repetition have been removed and technical terms corrected; the substance is unchanged. Part 2 is Episode 9.

0:35This episode is going to be a little more Victorian centric. We discussed in a previous episode that Victoria has specific rules and regulations, particularly Practice Note EE-04 pertaining to additions and alterations, so we are going to dissect that tonight. We have with us Sean McDonnell from Red Textas Consultant Building Surveyors in Brighton. Thank you for being here. I have known Sean for about fifteen years, and he has always been one of my go-to building surveyors whenever I have questions.

1:22I have worked at Red Textas since I started my university studies, back in 2006. I initially got into engineering and then added a commerce degree to make it even longer. By chance I got a job at a building surveying firm with no idea what they did. It took me seven or eight years to finish my course, and in that time, if I was not at university I was at Red Textas — starting out stamping plans back when you had hard copy sets, and the admin side of things. My engineering was civil, which was a good background for building surveying, so I continued down that path and did a graduate diploma after that, eventually getting my inspector registration and then building surveyor unlimited. Around twenty or twenty-one years now. It is a job I enjoy — there are always challenges, it is never simple.

2:57At Red Textas we now have three registered building surveyors, and a fourth inspector just got his registration. We have a few full-time inspectors, so we do our inspections mostly in house, plus a fairly large admin team including an assistant building surveyor — about fifteen staff. We do a mix of residential and commercial, but the biggest portion is Class 1 dwellings, whether new, multi-dwelling, or renovations and extensions. Everything is custom built; we do not deal with volume builders, so every job is a little different. We also do shop fit outs and a few apartment buildings, though we leave high-rise to others. Eighty to ninety per cent is Class 1, from tiny renovations through to very high end architectural.

5:28I should note that anything I say today is generally my personal view. You could get a group of five building surveyors in the same room and get five different answers to one question. There is always a lot of interpretation. And generally we do not discuss the basic easy things we all agree on — it is the grey areas where you will get many different interpretations depending on experience and who you speak to.

6:09Which sounds pretty similar to energy rating. How much collaboration is there with other building surveying firms? It seems like at one point everyone does something a certain way, and then collectively something changes.

6:34I wish we were all that collaborative. It tends to come through different avenues — a ruling from the appeals board that changes minds, or an interpretation that comes out, often from case law. There can be direction from the regulator, and there are seminars run by the regulator and by the institute of building surveyors, so things get raised at those and suddenly appear on people's radar. But it would be good if there were more collaboration, because you can get insular within your own office.

8:06With NCC 2022 now about eighteen months in, have you seen more difficulty assessing what the insulation levels and glazing specification are? How do you determine that on site — are you relying on the builder, or the installer's certificate?

8:38Whole of Home has been an addition to the standard requirements. Part of the difficulty in our role is that in terms of mandatory inspections, between the frame inspection and the final inspection there is generally nothing. We are not there to see any of it, and generally cannot — we are not getting into roof spaces at final inspection. So in terms of energy provisions it is actually very limited what we check. We rely on statements: declarations from builders, glazing certificates, installation records. It has not changed significantly between six and seven stars, other than the extra Whole of Home side and the removal of the rainwater tank or solar hot water option. We try to have it clear in our files what code applies so our inspectors know what to look for.

10:10In 2026, what proportion is still going through under the previous code? Less now. It is starting to run out — even with planning permits you usually have to start within two years, so it is being phased out. There is technically no time frame, but there is discretion around what counts as substantial progress on a design. Because we do not deal with volume builders we do not have their challenges; building surveyors who do have to deal with the new provisions much sooner, whereas we tend to lag because our jobs drag out.

11:24With volume builders, most surveyors take it from the point of deposit, because the master design was done years earlier. There are a lot still coming through now — deposits taken but finance or land development taking a long time. I would say about twenty per cent are still NCC 2019, and it is April 2026.

12:14We are finding it tapering. There were also other significant changes on top of the energy rating — the condensation provisions, and livable housing which has been very significant in designs. Those are the three main changes, with the first of May 2024 as the cut-off.

12:45On Whole of Home — are builders specifically referencing it when they send a letter saying it has been built in accordance with the permit? We generally ask for specific aspects rather than a blanket letter. One of them is the energy rating, so we would ask them to reference the energy report and the Whole of Home requirements. There are other provisions too, particularly around cladding installation where there has been a performance solution. Each job is a little different in terms of what we ask for.

13:51Most of the time the builder has not worked out what their heating or cooling unit is at building permit stage. So how do you cross reference what they installed against the documentation — the efficiency values of the heater and cooler versus what is specified?

14:14Good question. We generally see that as primarily the responsibility of the builder to comply with what is in the report, and there is an onus on them to report changes. Whole of Home is newer, so in terms of timing it is actually a smallish portion of houses that are complete right now. It is something that is a work in progress for us as well, and we are always looking at how we can improve our standards.

15:13Sounds like a good case for post-construction verification by an energy rater.

15:20Is there much photographic evidence? I am thinking about passive house, where the whole process relies on photographing and documenting the journey. And existing homes will require a lot of photos — fifty or more. Environmentally sustainable design for planning requires more photographic evidence these days. Is there any of that, or is it something that could be introduced?

16:04Generally not, because our responsibilities under the Building Act are the mandatory inspections at those prescribed stages. The key one from an energy perspective is the final inspection.

16:35It is prescribed in the Act that us issuing an occupancy permit or certificate of final inspection is not evidence that the building is compliant. It is only evidence that the building is suitable to occupy. So our responsibility does not extend to the builder giving us evidence that every single aspect of the building complies with the Act. It has a hot water service — it just does not matter what the model number is.

17:04That is where it is open to interpretation. Obviously there are practical things we check and can see, particularly around safety — is the stair compliant, is it non-slip, is the balustrade compliant, things that can be measured. It is more open to interpretation how a building is not suitable to occupy because the hot water service is not as efficient as it was supposed to be. It is obviously the builder's responsibility to comply with the energy report, but there is a good question about where you draw the line on what is a material change, and when we have to go back to the energy rater for clarification. Does a minor change to a window warrant that?

18:10Seven stars to 6.9 — you do not know. That tenth could mean the difference between thermally broken and non-thermally broken windows, so there is a financial impact on the client. And five items each worth a tenth and suddenly you are at 6.5, not seven.

18:52There is a building inspector prominent on social media who often says any deviation from the building plan requires new documentation. Where does that start and finish?

19:25It is open to interpretation. There is always going to be a degree of change that is not exactly as per the plans. There are also challenges in that when we issue an amendment to approve changes, we are not supposed to issue amendments for changes already made. Similar to building permits, we can only issue for proposed works, and that flows through to amendments. So if we get there and something has changed, we are not necessarily allowed to approve it as an as-built change. There might be some form of enforcement instead — a direction to fix, a building notice, a minor works order — but some of those are too heavy-handed for a very minor change. It is a judgement call whether they have to go back to the energy rater, or the engineer, depending on the change. More sensitive areas, such as a cladding change for a non-compliant cladding requiring a performance solution, get weighed differently.

21:09Have you done rectification works where, say, a garage has been turned into a habitable space with no building permit, and somehow it is on council's radar? You do the energy assessment and it does not comply at all, and the building surveyor still passes it because none of it relates to fire or someone being hurt.

22:01I have seen it from both ways. I have had that scenario, and on other projects I have had a building surveyor absolutely adamant that the owner did the wrong thing knowingly and had to rectify works. I have seen comments requiring a roof to be pulled up to ensure insulation was applied. I do not think it is a blanket statement to say it is overlooked.

22:46What can be difficult with illegal works and council enforcement is that there is no prescribed process councils must follow. Yes, there is legislation for building notices and orders, but there is no formal process in the Act or regulations that says council must cover A, B and C, the way a building permit process is prescribed. So it is very much open to their discretion, and different councils have a very different perspective. Some insist on far more onerous requirements. With energy they probably use some discretion — if a garage was converted to a bedroom they might have Regulation 233 in mind anyway. But others insist on engineering reports, certifying the as-built structure, footings, slabs. It is very open ended.

24:23So occupant safety before occupant comfort? Generally, if they were going to order it, fire safety, setbacks and heights rank highly. Energy is not at the top of the list, particularly when something might be a risk because someone is sleeping in there, there are no smoke alarms and the wall is not fire rated. They deal with the urgent life safety matters first.

25:02What are your thoughts on additional mandatory inspection points? Other countries have a lot more than we do — more than double in some cases, and energy efficiency features higher.

25:44They have been on the government radar for a while, though energy was not the priority. The ones being looked at are structural and waterproofing matters. A common issue is that after our frame inspection a lot of trades come in and hack things out — particularly mechanical ventilation, bigger openings — so a post-services frame inspection is on the radar. I agree with that one. It is supposed to be the builder's responsibility, and they are not all trying to do the wrong thing, but it is an important point to look at.

26:58Waterproofing is the other one, but in my opinion it would open a can of worms for us to take on liability we are not responsible for, because you are looking at bathrooms and balconies. It can be hard to inspect, it gets complex, and my biggest issue is what happens after you inspect it — a trade walks over it, penetrates the membrane, and then we are the ones liable when the balcony leaks.

27:55When you are looking through a NatHERS certificate, are there common errors you spot? Some common ones are around materials and what is written on there. Deep computations are not something we can assess as building surveyors, but basic things like floor type — is it suspended timber, is it concrete slab — you see some errors. Another area is material changes, where they initially rated it with one cladding and then changed to something else, which is going to affect the report.

28:53My main comment on what can be lacking is a clear summary of requirements. It can be difficult — you can make your way through the report and see generally what is there, but with the provisions in the code that ask for additional requirements on top of the star rating and Whole of Home report, those may not be clear to everyone including the designer. Slab edge insulation, for instance. In my opinion reports could be much clearer, with a clear list of the summaries that are not just from the report but include any additional requirements.

29:56Do you have a documented hierarchy of what takes precedence? On mine I provide a covering letter with the certificate, breaking down all the inclusions I expect to see, and then the additional information. At the very start we say the certificate takes precedence, followed by my covering letter. And I will not stamp a set of plans if there is any contradiction, so it is really a case of ensuring the documents are correct and aligned.

31:57It is good for the building surveyor, the builder and the architect to understand how to read a certificate, because these discrepancies do happen. I get a lot of other assessors' reports through our office and I am forever seeing mistakes — a cut and paste cover sheet repeated over and over. You really need to know how to read that certificate properly. At minimum, the insulation levels, the window specification and the construction material types.

32:52I do something similar. It is a chicken and egg problem — something has to come first so the client knows what to incorporate on the drawing set. So I provide a preliminary without a certificate, which is effectively a thermal specification, and it is very clear up front that the result is predicated on that specification and that all of it needs to make its way onto the drawing set before I certify. Once I certify, the certificate overrides everything else in combination with the drawing set.

35:32Floors and floor coverings are harder to get wrong, but with walls you can model a brick veneer and have it described as a lightweight cladding, or whatever you want. So there could be a complete mismatch with what is reported on the certificate.

35:52There are hundreds or thousands of points of data entry in that file that do not show up on the certificate. So there are a hundred ways you could, if you did not have ethics, make the rating better than it actually is, and no one would be the wiser unless it was audited. At one stage it was discussed that regardless of what you called the elements, the certificate would transparently show the layers. In the early days it did. I find it bizarre that they drew those sections and then removed them. I think that was the difference between FirstRate originally producing certificates and the introduction of the universal certificate where all the software had to match.

37:56As a surveyor, do you play any role in reviewing the qualifications of the assessor who provides the report? I am aware there are reports from unaccredited energy raters, and I have looked into that, but personally I do not believe I have ever seen one. We generally would not look further into it when we are getting an accredited report, because there is an accreditation process the energy rater needs to satisfy and standards they should be operating by. It would be different if unaccredited reports were being submitted, and it could potentially be difficult to accept that as a building surveyor — but I have not come across it.

39:00It is possible that in Victoria we see fewer unaccredited assessments. I believe there is a percentage nationally, maybe five to ten per cent. That is a high percentage. I could not see a building surveyor taking on the responsibility of accepting an unaccredited assessment — is that not your liability, accepting that they know what they are doing?

39:46It could be hard to accept. It is a slightly different area to other registrations we look at, because energy raters are not registered with the building regulator, but there obviously is their own process. I think it would be difficult to accept one of those reports. There would probably need to be something pretty concrete as to why they are not accredited.

40:39Accredited energy raters have a fairly robust accreditation process. We are subject to audits, we have to maintain professional development. If we stepped out of that accreditation it would be open for everyone to do what they want. And maybe from a building surveyor's perspective, knowing an accredited assessor has professional indemnity insurance is an important one. That is where I was going with it. If it was not accredited we would have to make those inquiries — do you have this, why should it be accepted. We see a certificate of currency with the accreditation, which we do not have to question from an accredited assessor.

42:04We have the NCC, the building regulations, the Act, Australian standards referenced and non-referenced, and practice notes. Where do practice notes sit in terms of regulatory jurisdiction? Sometimes we come across a building surveyor adamant it must be followed black and white, others say it is a guide.

42:52It is not legislation. I see it more as a guide to elaborate on the regulations or the NCC clauses. But when it comes to disciplinary hearings for building surveyors there are some broad clauses, and now a code of conduct covering acting unprofessionally — so if a guide issued by the regulator is blatantly ignored or not considered at all, there could be an argument that you are acting unprofessionally. That said, the practice notes are not necessarily perfect. They have been revised many times, but there are a lot of areas open to debate. Even the first practice note about when a building permit is required is incredibly complex.

44:26So it is like the word reasonable in the practice note — if you are taking reasonable care to follow it, that is more or less what you want to see. Whereas blatantly ignoring or refusing to follow it is a different situation. Taking a reasonable approach is the best way to go about it.

45:38Let me read Regulation 233 verbatim. Subregulation 2 requires that where the volume of proposed alterations, combined with any alterations completed within the previous three years, represents more than fifty per cent of the volume of the original building, the entire building must be brought into compliance with the regulations. But then subregulation 3 states that despite subregulations 1 and 2, and subject to subregulation 6, the relevant building surveyor may consent to partial compliance. So subregulation 3 can negate 1 and 2, subject to subregulation 6 which is the twenty-five per cent extension.

47:24It gets complicated. That is the problem.

47:31My reading starts by saying that once you hit that fifty per cent alteration mark it is expected you treat it like a new building. However, we have discretion on different parts depending on the size of the alteration and the size of the extension.

48:48There are a few main scenarios. If there is a small extension, less than twenty-five per cent — for example a hundred square metre house and you add twenty square metres — we have discretion with that new part and with the existing, and generally any alterations within the existing. At the larger end, if you did a big addition and alteration where everything is over fifty per cent — a hundred square metre house adding seventy — you are already hitting fifty per cent in terms of alteration and extension, because the extension is often considered part of the alteration, plus any parts you are altering within the house. There we have discretion, but not with the new extension. Our discretion only relates to the existing part of the building.

49:48And then there is the one in between, where the alteration is less than fifty per cent but the extension is greater than twenty-five per cent. I do not see where we have any discretion in that case, because it falls between and does not fit our criteria of greater than fifty per cent alteration or less than twenty-five per cent extension.

50:32So there is a scenario where you would have to bring the entire house into compliance? No — if it falls in that twenty-five to fifty per cent bracket, the new part must comply, but we do not actually have discretion with the existing house to make people do upgrades. It is just not part of the scope, so you are not exempting anything, because there is nothing to exempt. Just make sure the new works comply.

51:58But that is not going to work, because you are doing an energy report on the entire house.

53:35That leads to the next section. If I look at the formula mathematically, using my engineering brain — I know the practice note says it can only be used when it is less than twenty-five per cent, but when I look at how it works, it is essentially a weighted average to figure out what should be achieved overall. Looking at it from a mathematics perspective, it should be able to be used between twenty-five and fifty per cent as well, as long as you are not factoring in upgrades to the existing to achieve the star rating that comes out. Mathematically it says your new parts are achieving seven stars, as long as you are only factoring in the extension works without artificially raising the total by putting insulation in the existing roof.

55:38The formula has changed as well — it is no longer volume based, it is area based. There are two things: one decides whether you can use the formula, and the other is the application of it.

57:13As a performance solution, surely that calculation could be used for any size project. And you would need to be able to show within that — even in the greater than fifty per cent scenario, with a hundred square metre house and a hundred square metre addition, we do not have discretion with the new part, so it must be shown that the addition achieves seven stars. You can factor in alterations on the part of the house that has been altered, but we have discretion on the existing. So there can be complexities in showing that. In practice I have been conservative and treated it as a performance solution, but my personal opinion, reviewing the numbers, is that there is a strong argument it is not one, particularly in that twenty-five to fifty per cent range.

1:00:59There are different ways you can assess a performance solution, and one of the main ones is comparison to the Deemed-to-Satisfy provisions. There is probably an argument that Regulation 233 is not part of the Deemed-to-Satisfy provisions — it is more an exemption clause — but it is still a relevant point to reference, because it can blur the lines between performance and when 233 gets looked at.

1:01:48As an example, if you had two rooms side by side and took out the dividing wall, earlier practice notes said both rooms effectively became the total area of change. If it was a bedroom becoming part of a living space, that is a change of use. But if you had a dining room and a living room and took out the dividing wall, is that still saying the whole floor area of both rooms is an alteration? They leave it very open now to the surveyor to use professional judgement, but based on the examples I do not believe that whole area comes into play. You are essentially taking out a wall and putting in a beam, and that is the only part being altered. Arguably if you are then fully fitting out the other areas, changing windows, putting a bigger door in instead of a window, that area counts.

1:03:16That is where I was heading, because if you take out a wall and are not changing the fabric, the window, the walls or the ceiling, it becomes very hard to include that area in the calculation and reach compliance without asking for dispensation on existing fabric that has not been touched. I agree. Sometimes practically, if you are already over fifty per cent it does not matter how you calculate it — but where it makes the difference of whether you are over a threshold, removing one wall can suddenly take you from twenty-six per cent to sixty.

1:04:22So there are two methodologies: the two-house energy rating method, and rating only the renovated house. Reading directly from the practice note, there is a specific paragraph we all get hung up on. It says: rate the renovated house with sufficient improvements to the existing building fabric to achieve a rating of seven stars. And here is the kicker — if a seven star rating cannot be achieved, then the highest rating possible is to be demonstrated by the rating.

1:05:21What do we make of that clause? From my understanding, dispensation under Regulation 233 can under no circumstances be applied to the extension itself. So how can we possibly have a house rated under seven stars and still comply? It seems to be adding an arbitrary application into regulation.

1:06:12I agree. I do not know how I can accept it, or how it can be quantified for me to accept it, because it is fairly clear that the new part has to be seven stars. It is not try your best and see what you can get. I have had multiple energy raters bring it up, but I do not believe it lines up with the expectations of the regulations, both Regulation 233 and the NCC provisions.

1:06:48So the answer you give back is that it needs to achieve seven stars, other than where you can exercise discretion on parts of the existing building fabric.

1:07:14But that is the point of that methodology — the whole thing needs to be seven stars. What if I simply cannot get the house to seven stars? I have had them before. A five metre wide terrace house with no north orientation and two storeys either side — there is just no way. It is an impossibility.

1:08:02Most of my projects I can get to seven stars, and then the building surveyor uses their discretion for parts of the existing fabric. So it would be seven stars if they were to make those changes to the existing building. Examples would be cavity brick, where yes, it might be possible to add rigid insulation inside or outside, but that is prohibitively expensive and involves removing architraves, skirtings, cornices — it has a knock-on effect, and there could be a pressed metal ceiling. Or a timber floor with a subfloor, especially where they are not removing the floorboards.

1:09:26That is exactly the intent of 233, to exempt those parts out. But I am talking about a case where even when you insulate all the existing walls and upgrade all the windows to match the new part, you still cannot achieve seven. What is the alternative? This clause is giving you a get out of jail free card, but in my opinion you would need to change the Act for that to be applied.

1:10:10They are going to be very rare. I wrote a post saying about ten per cent, but it is less than that. The thing is we hit a few of them straight up, which was odd. I have had three or four since NCC 2022, and besides completely stripping the house — I sent one of the files to CSIRO and they could not get it to work either. So I am wondering, do we need another clause? Do we need a change to the Act? I do not think, Sean, that you can do what it is asking you to do.

1:11:02No, I do not believe we can. The backup for everything, which is usually a last resort, is a Building Appeals Board modification. Outside of that we essentially cannot allow non-compliance where we have no discretion for it. The appeals board can, and they are essentially the only one that can where it does not fall within the surveyor's discretion.

1:11:36There is enough justification to get it passed with the appeals board, but there is cost, delay and unintended consequences. If this paragraph is in the practice note you would expect a methodology for using it.

1:11:54If it had to go to the appeals board, it always works more easily if the building surveyor is supportive. Would you support a reduced energy rating, and at what limit would you say no? I would have to look at it on its merits. A default position is often no comments, and let them make the decision, unless I have a strong feeling. But if an explanation was put to us and it all made sense and was practical, I would not be hesitant to be supportive.

1:20:56We often talk about what is reasonable, and nobody really quantifies it. We try to be practical. In the greater than fifty per cent scenario we ask about the scope — the plans often do not fully reflect it. It might look like they are keeping the whole existing house, and in reality all the plaster is stripped by the time we inspect. So we have conditions in our Regulation 233 consent that talk about what is practical: if you are removing plasterboard from a stud wall, we expect you to insulate it. If there is practical access to the roof space, insulate. Similarly floors, where you might have practical access. You are obviously not expecting under a slab to be insulated if that is to remain. People are usually receptive, and it is not outside their expectations — they usually want to upgrade those things when doing an extensive renovation.

1:22:34What is important to understand is that it has nothing to do with megajoules or star ratings. It is about what can be done practically, and whether any work is actually occurring there. You are not going to jackhammer up the slab to put insulation under it. Cost comes into it, and with cavity brick walls there is an argument that you are not maintaining the 35 millimetre cavity required for weatherproofing.

1:23:11Another area is Whole of Home and solar panel upgrades, which are often on people's radar anyway. Though on a few jobs concerns have arisen that the existing roof is not structurally suitable — I have seen councils issue building notices to show cause why a solar system was installed without confirmation the twenty year old trusses were suitable for the load. So there are other factors in 233: structural, amenity, health and cost.

1:24:16On the 35 millimetre cavity — if you had a new double brick wall and somebody put insulation in it, how does that work? If you put a foil centrally, does that impinge on the 35 millimetres? If it was a solid board it might be 30. Do you need to widen it to maintain another 35?

1:24:42We do not see that much cavity brick anymore, the occasional feature wall. I would normally interpret that you need to increase the cavity and use bigger brick ties to maintain the 35 millimetres, because bricks are not waterproof, including the mortar. Those walls, same as brick veneer, are designed to have that air gap so any water that gets in can get out via weep holes. If you had a rigid insulation board taking up the whole cavity, I think it compromises what that cavity is there to do — and that would also apply to a retrofitted blown-in product, which could arguably make the wall non-compliant.

1:25:37And rigid insulation has its own challenges, because it can increase the risk of condensation if you are not battening it out. Then the bricklayers do not exactly love brick ties through every course. At the end of the day, if we have a cavity brick wall we need insulation in it, so as assessors we need to be conscious of that and be able to go back to a designer and say you have to do this, but you are going to have to make it bigger — and then they will say it is out of alignment.