Home building legislation changes

Tue 25 Oct: Legislation recently introduced by the NSW Government called the Home Building Amendment Bill 2011 will change the state’s home building industry and is said by the O’Farrell Government to modernise home building laws and stimulate investment    

Key amendments include:

·         aligning the time periods for statutory warranties on home building work with those for home warranty insurance (i.e. six years for structural defects; two years for non-structural defects)

·         raising the monetary threshold at which home warranty insurance is required from $12,000 to $20,000;

·         raising the threshold above which a written contract for residential building work is required from $1,000 to $5,000 and introducing a written quote requirement for work between $1,001 and $5000 saving unnecessary paperwork;

·         formally opening up Fair Trading’s effective dispute resolution process to trader-initiated disputes;

·         clarifying the time periods for home warranty insurance to allow for the timely return of builders’ securities held by insurers;

·         halving the excess on home warranty insurance claims;

·         increasing the minimum level of home warranty insurance cover from $300,000 to $340,000;

·         providing a single definition of when work is “complete” in relation to statutory warranties and home warranty insurance to provide greater clarity and reflect the practicalities of building;

·         excluding claims arising from a breach of statutory warranties from the proportionate liability provisions of the Civil Liability Act 2002.  This means that builders and developers, not subcontractors, are fully responsible for compensating home owners for defective residential building work;

·         tightening up the definition of parties “related” to a builder or developer to prevent abuse of the home warranty insurance scheme; and

·         clarifying the definition of “developer” to close off a loophole that may lead to homeowners missing out on fundamental protections provided under the Act.

 An interdepartmental working group is expected to report back to the state government in November with a review of the Act scheduled for 2012.