Freecity Innovation Insights No.11 – Why the transactional framework will define the future of modular

As one of the leading developer-builders delivering Volumetric Modular Construction (VMC) at scale in Australia, Freecity has been an active voice in the industry on how modular must evolve: technically, contractually, and commercially. That conversation is now moving more quickly.

A few weeks ago, the NSW Government introduced the Building (Approvals and Practitioners) Bill 2026 to Parliament — the first Australian legislation to formally recognise Modern Methods of Construction (MMC). Freecity has been advocating for this step and NSW is now signalling clearly that modular construction is not a fringe option; it is part of how the state intends to meet its Housing Accord targets to lift productivity  and bridge the gap between approvals and completions.

The Federal Government is moving in the same direction, with funding in the Budget to remove barriers to the uptake of MMC by progressing work on a national voluntary certification scheme for manufacturers and establishing regulatory neutrality with traditional construction methods. The National Housing Supply and Affordability Council’s 2025 State of the Housing System report references MMC nine times and modular construction five times, from little to no mention in their 2024 report.

A note on terminology: while the broader policy and regulatory work refers to MMC, modular delivery of housing through kit of parts and Volumetric is the major focus for developers.

The legal architecture – MMC-Modular

Our ESG & Innovation Lead – Filomena Beshara and I were recently invited by the UNSW Australian Graduate School of Management (AGSM) to present at the Legal Essentials for Off Site Construction’s course. Spending the day alongside some of Australia’s leading construction law experts, reinforced that getting the legal and transactional framework right in VMC is just as important as the design and technical requirements.

A key take-away from the day was that MMC-Modular needs to be built on collaboration, shared risk, and clearly negotiated handoff points between the off-site manufacturing (potentially offshore) and the on-site assembly.

The course surfaced a range of legal topics that are becoming increasingly relevant to MMC-Modular:

• Safety in design and the Work Health & Safety Act
• Copyright in design
• Modern slavery
• Insurance
• Payment applications
• The role of integrators and logistics operators

The contractual complexities which surfaced at the AGSM course are real, but it is important to recognise that they are not new, nor are they unique to offshore procurement and/or modular. Firstly, offshore procurement is not new to Australian construction: anecdotally, conventional apartment projects already source roughly 40% of their components overseas, and VMC projects closer to 70%. Secondly, it is worth pausing on a provocation here: how are each of these topics being treated today for lifts, complex facade systems, bathroom pods, and the long list of other manufactured components the Australian industry has been procuring offshore for decades? In most cases, the answer is that the sector has quietly absorbed these risks into its standard contracting frameworks. What modular is doing is simply bringing some of the latent questions to the surface.

Freecity’s integrated VMC model: a different risk architecture

Freecity’s position as an integrated builder-developer with in-house VMC procurement and design capability through Space Labs, changes the risk architecture fundamentally. Where the typical MMC supply chain can create ambiguity between developer, integrator, head contractor, and offshore manufacturer, Freecity’s model consolidates design intent, procurement, and delivery accountability within a single organisational structure, except for the offshore manufacturer.

A second feature of our model is the asset classes we focus on. Freecity builds for the Living Sector and other single-owner assets for hotels, affordable and social housing— rather than for sales. This replaces a fragmented consumer-protection problem, with a long-term alignment between landlord and tenant on building performance over the life of the asset. It is a commercial structure that fits the way modular delivers value: durability, consistency, and whole-of-life performance, underwritten by a single accountable owner.

We share this not as a claim that ours is the only model that works, nor of having solved what remains a sector-wide challenge, but because the lessons drawn from two decades of integrated VMC delivery — grounded in Space Labs’ executive procurement experience — are increasingly being relied on by peers, regulators, and academic institutions working to mature the Australian MMC framework.

The lawyers need to be in the room from day one for MMC-Modular

The enthusiasm that surrounds MMC is real, but so is the transactional complexity and you need to work with real experts. The legal and transactional architecture is something you must build from the earliest stages of project development, procurement strategy, and supply chain design.

At Freecity, we have spent the last several years working through these questions in live projects, and we are committed to continuing to share what we have learned with the industry, government, and academic partners, as the Australian MMC framework matures. Despite the challenges, we firmly believe VMC is worth the effort. More broadly, it is as a must-have for government if Australia is to bridge the widening gap between housing supply and demand.

We are grateful to UNSW AGSM for facilitating this learning, and to the practitioners and academics who gave generously of their expertise throughout the day and if you are seeking to deepen your understanding of the legal dimensions of Modern Methods of Construction, we strongly recommend exploring AGSM’s short course.

David Chandler AM kicked off the course with his keynote speech, here is a link to his LinkedIn post about the course.

Spotlight: Filomena Beshara, Development Manager – ESG and Innovation Lead

I am pleased to introduce Filomena Beshara, who recently joined our team at Freecity. Filomena is a Development Manager, and she leads ESG and Innovation at Freecity: she drives integration of sustainable initiatives and emerging technologies across major development projects. Her role extends beyond environmental leadership to spearheading research, new methodologies, and forward‑looking solutions that create long‑term commercial, social, and environmental value.

Before joining Freecity, Filomena held senior sustainability roles where she helped shape industry practice through research collaborations, design‑for‑disassembly frameworks, and white papers on sustainable construction. She brings a multidisciplinary background spanning architecture, sustainability, and hands‑on project delivery.

Filomena Beshara
Development Manager – ESG and Innovation Lead, Freecity

Written by Steven Mann
Published: 01 June 2026