Kreisson advises developers, head contractors, manufacturers and suppliers across the modular and prefabricated supply chain, from contracting and procurement through to defects and disputes.
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David Glinatsis presents Kreisson's thinking on modular risk, responsibility and recovery at Offsite 2026, prefabAUS's annual conference in Melbourne, 2 to 3 September.
Australia's building laws were written for one site, one builder, and a certifier who can walk the job. A modular project doesn't look like that. Modules may be designed in one state, fabricated in another (or overseas), transported across borders, and installed by a different party months after the critical work was done.
The standard contracts, the inspection regimes and the payment legislation all assume work they can see. In modular, the most important work is sealed behind plasterboard before it ever reaches the site.
of reported modular defect root causes sit in on-site assembly. The rest arise before the module ever reaches site: manufacturing 27%, transport and lifting 16%, design 13%. Control doesn't disappear in modular. It fragments.
Source: Gurmu, Fallah Tafti, Mills and Kite, 'Defects in Modular Building Construction: A Systematic Lifecycle Review', Sustainability 18(8) 4000 (2026), Deakin University. Shares are of root causes reported across the 61 reviewed studies.
the value of Australia's prefabricated buildings market, on track for $20bn by 2029.
Source: Building Commission NSW, Position Paper on the Regulation of Prefabricated Buildings (2024).
the potential "handover gap" between factory completion and installation, during which no party may bear clear inspection responsibility.
Source: the "handover gap" per Bell and Charrett (2018) 34(2) Building and Construction Law Journal 139; duration ranges from the UNSW Legal Essentials for Off-Site Construction course materials (2026).
None of this makes modular a bad idea. It makes it a project type where the contract has to do the work the regulator can't. Get that right early and modular delivers on its promise.
Building Products (Safety) Act 2017 (NSW) and the Commonwealth border regime
Already operating, not on the horizon. The Building Products (Safety) Act 2017 (NSW) lets the regulator ban and recall non-conforming building products, Australian Border Force is intercepting asbestos in imported prefab consignments, and engineered stone has been a prohibited import since 1 January 2025. A supplier declaration alone won't carry a module across the border: NATA-accredited testing of representative samples is the assurance that counts. A chain-of-responsibility expansion reaching designers, manufacturers, suppliers and installers is legislated and waiting to commence.
Building Products (Safety) Act 2017 (NSW); Australian Border Force interception program; Customs (Prohibited Imports) Amendment Regulations 2024.
Pafburn Pty Limited v The Owners – Strata Plan No 84674 [2024] HCA 49
The High Court confirmed that the statutory duty of care under s 37 of the Design and Building Practitioners Act 2020 (NSW) is non-delegable. A developer or head contractor can be liable for 100% of defects across the whole supply chain, including defects made in a factory it never visited. Recovery from the manufacturer is a separate fight, and only worth what the manufacturer is worth.
Built Pty Ltd v VCIP [2026] VSC 76
Shows what happens when modular risk is left to standard form contracts: 460 factory-built prison cells, alleged rust and mould on delivery, and a handover condition that could not be conclusively established afterwards. The dispute turned on evidence a joint delivery inspection would have created in two hours.
Assented on 14 August 2026, this is the first Australian legislation to build a dedicated approvals regime for prefabricated buildings: manufacturer declarations, installation instructions, and a supply offence that applies wherever the modules were made. For the first time, the statutory duty of care will reach manufacturers and suppliers directly. The Act commences on proclamation, and the contracts you sign now will still be live when it does.
Fair Trading and Building Legislation Amendment Act 2026 (NSW) No 28
Assented the same day as the Building Act, this omnibus Act amends more than 20 NSW laws, and its reforms commenced on 20 August 2026. The headline for modular: it replaced the old "serious defect" trigger with an insurance-ready "relevant defect", the legislative key that unlocked ten-year decennial insurance for apartment buildings. Certifiers also now stay accountable after they leave the industry, so the ten-year liability tail no longer ends at retirement.
NSW Parliament, Bill record (passed LC 4 August 2026; assent 14 August 2026); Sch 19, Strata Schemes Management Act amendments.
Ten-year defect cover for NSW apartment buildings
Ten-year, first-resort cover for covered defects in eligible NSW strata apartment buildings over three storeys, on a strict liability basis: the owner doesn't have to prove who caused the defect before the policy responds. The framework commenced on 20 August 2026 and the first approved policy is on the market. For modular high-rise, where module-to-module interfaces are the recurring weak point, this changes who pays first. Where the loss finally settles is still decided by recovery between insurer, builder and manufacturer.
Building Commission NSW, "Ten-year defect insurance for apartment buildings" (2026).
Together these developments decide who pays when a modular project goes wrong. Legislation can create a defendant. Only the contract, security and insurance can create a recovery. The time to deal with that is while the design is still on paper.
In modular, the contract is the quality assurance system. Standard forms weren't written for factories.
When something goes wrong, the forum you chose in the contract decides how it plays out.
Standard contracts were written for site-based delivery. A modular project needs at least these six, drafted in before manufacture starts.
Ownership passes progressively with each payment, tied to specifically identified modules, not a general promise.
For the builder, the developer and the financier, with rights that survive default and insolvency.
One document that says who owns every junction between factory, transport and site.
A change on a production line has different cost and time consequences from a change on site.
Offsite manufacture, storage, transport, lifting and installation, covered expressly rather than by assumption.
Arbitration enforceable in more than 170 countries under the New York Convention, not a judgment the manufacturer's home courts will ignore.
If your contract is silent on these, the risk hasn't gone anywhere. It has defaulted to you.
Modular risk moves along the chain. Wherever you sit on it, the questions are the same: who inspects, who pays, and what the contract says when they disagree.
Pafburn put the whole supply chain's defects on your balance sheet. We build the contractual protections that pull control back up the chain: inspection rights, evidence protocols, security and enforceable recovery.
You sit between a principal with non-delegable duty claims and a manufacturer you may never have chosen. We structure back-to-back protections, and act for you when claims land.
Your production line runs on certainty: locked designs, protected queue positions, milestone payments that arrive. We draft supply contracts that work in the factory, not just in the boardroom, and we'll get you ready for the prefab regime under the 2026 Act: declarations, instructions and the supply offence.
Interface risk lands hardest at the junctions. We define who owns each connection point before it becomes a dispute, and when the certifier asks who stands behind the services sealed inside a module, you'll have the answer in writing.
Managing Director | Principal Lawyer
David was admitted as a solicitor in 1985 and has since practised extensively as a litigator, problem solver and strategist in commercial and complex construction and engineering disputes.
He's seasoned in all forms of dispute resolution, from negotiations, mediations, expert determinations and adjudications through to arbitrations, Supreme Court and Federal Court proceedings and ICC international commercial arbitration. His matter experience runs from complex owners corporation defect claims to offshore infrastructure, advising on contracts ranging in value from $2 million to $400 million.
David is a regular presenter and educator to peak industry groups, clients and professional bodies in construction, engineering and related industries, providing training in contract and risk management in NSW, Queensland and South Australia.
David is a guest speaker on UNSW's two-day short course covering the procurement, regulatory and dispute side of delivering modular and prefabricated projects, alongside keynote speaker David Chandler, former NSW Building Commissioner. Next intake: November 2026.
View the course at UNSW
Whether you're structuring your first modular project or already holding a defect problem, an early conversation costs little and saves a lot. No obligation, and no invoice at the end of the call.
We're here to help.
Prefer email? excellence@kreisson.com.au. We'll only use your details to respond.
