Understanding Systemic Risks in the Australian Architecture Sector

Learn how D&C contracts, climate change, and poor communication contribute to systemic risks facing Australian architects—and what you can do to adapt.

What Are Systemic Risks?

Systemic risks are issues that affect an entire sector, not just individuals or isolated incidents. In the Australian architecture profession, these risks can cause broad harm, undermine public trust, and challenge the ability of regulators to manage professional standards.

The Architects Registration Board of Victoria (ARBV) and the NSW Architects Registration Board commissioned an in-depth report to identify current and emerging systemic risks—and what architects, educators, industry bodies, and government must do in response.

This blog breaks down the key findings of that report, as presented by Dariel de Sousa in a recent CPD webinar.

Why Architects Should Care About Systemic Risk

The report and webinar stress that:

• Architects operate in an increasingly complex, high-risk environment

• Failure to recognise systemic risks can lead to legal exposure, compliance breaches, or reputational harm

• Regulatory bodies are shifting towards proactive, risk-based approaches to regulation

Systemic risks include anything from procurement models and fee structures to disruptive technologies and climate change regulations.

Key Systemic Risks Identified

1. Design & Construct (D&C) Procurement

The D&C model dominates large-scale Australian construction projects. While efficient, it introduces risks that can compromise an architect’s professional obligations.

Risks include:

• Unfair contractual terms in bespoke D&C agreements

• Increased liability with limited control over delivery

• Reduced availability or affordability of professional indemnity (PI) insurance

• Marginalisation of architects from the project management role

✅ Architects must negotiate better terms, assert their role early, and understand the implications of the contracts they sign.

2. Client–Architect Relationships

Poor communication and non-compliant agreements are still far too common.

Problems include:

• Missing or incomplete client–architect agreements

• Disputes over scope, costs, or deliverables

• Unrealistic client expectations (often due to poor briefing)

• Fee structures tied to construction costs that create perception of cost blowouts

Regulatory frameworks require written agreements and transparency in fee structures—failure to meet these conditions risks formal complaints and reputational damage.

3. Building Defects & NCC Compliance

Architects are under growing scrutiny for their role in building defects, particularly in residential towers.

Although studies show no clear correlation between defects and architectural design, issues persist:

• Poor documentation can lead to non-compliant builder decisions

• Pressure from D&C models can degrade quality

• Gaps in understanding the National Construction Code (NCC)

✅ Architects must:

• Understand and apply the NCC

• Document how their design complies (even if not explicitly required)

• Promote a strong compliance culture within their practice

4. Disruptive Forces: Climate & Technology

Two major disruptors are reshaping architectural practice:

Climate Change & Sustainability

• Architects can be held liable if sustainable design is poorly explained, documented, or implemented.

• Regulatory requirements are increasing (e.g., net zero targets, energy efficiency standards).

Digital Transformation

• BIM, automation, and digital tools are reshaping workflows.

• The sector struggles with innovation due to short-term D&C project teams and outdated standards.

✅ Architects must upskill in sustainability and tech to stay relevant—and mitigate liability risks.

The Role of Regulation

While the ARBV cannot dictate project procurement methods, it can—and does—enforce compliance with:

• The Architects Act 1991 (VIC)
  Read the Act

• Architects Regulations 2015
  View the Regulations

• The Victorian Architects Code of Professional Conduct
  Access the Code

Architects are expected to:

• Be proactive in compliance

• Engage in meaningful CPD

• Build stronger relationships with clients and collaborators

How Architects Can Respond

To manage systemic risks, architects should:

• Educate themselves on regulatory obligations and best practice

• Negotiate contracts with legal advice, particularly for D&C projects

• Use compliant client–architect agreements from industry bodies

• Document NCC compliance clearly and accurately

• Invest in professional development in climate-responsive design and digital tools

• Foster strong client communication from day one

Conclusion

Systemic risks are here to stay—but so are the opportunities they bring. By understanding their regulatory obligations, engaging in ongoing CPD, and adapting to market and technological change, Australian architects can not only survive but thrive in this evolving landscape.

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Tags: #aecassistant #compliance #planning #construction #buildingcode #renovation #architecture #sustainability