New changes to the NSW Home Building Act.
Pic by Atanasis
On 19 October 2011, the NSW Parliament passed a package of reforms to the Home Building Act 1989 which includes changes to:
The changes will commence in two stages, the first took effect on 25 October 2011, while second will begin on 1 February 2012.
Particularly for our clients, Investors buying house and land packages, off the plan units, new units, and home renovators should be aware of the following:
New small job contracts category
Residential building contracts must be in writing and include a number of requirements.
Commencing 1 February 2012, a new category of written contracts for ‘small jobs’ worth between $1,001 and $5,000 will come into effect. A small job contract must be in writing, dated and signed on behalf of both of the parties and contain the following information:
So if you are renovating say a kitchen or a bathroom and the works are between $1,001.00 and $5,000.00 make sure you get it in writing with the builder or contractor.
Click on this link for full details of the changes.
Definition of completed
The term ‘completed’ has a very important role in the legislation because it marks the beginning of the time periods for statutory warranties and home warranty insurance.
There is now a clear definition of what is meant by ‘completion’.
Residential building work is ‘complete’ when it is completed in accordance with the requirements of the contract.
If there is no contract, or the contract doesn’t specify ‘completion’, the work is regarded as ‘complete’ when it can be used for its intended purpose and is free of major defects. The earliest of the following events can be used to determine when this occurs:
Proportionate liability
Under the new laws when a homeowner takes action against their builder or developer for defective or incomplete work, the builder or developer will not be able to limit their responsibility to the part of the work for which they were directly responsible, regardless of the provisions contained in the Civil Liability Act 2002.
This does not mean that the builder or developer cannot use the provisions contained in the Civil Liability Act in separate legal proceedings
A full list of the changes are below:
October 2011 changes
Requirement to notify home warranty insurers in writing
Time limits on home warranty insurance claims
Claiming outside the home warranty insurance period
A notification of a loss includes a 'related' loss
Ten year limit
Definition of completed
Definition of developer
Proportionate liability
Trader–initiated disputes
February 2012 changes
Statutory warranty periods
Threshold for mandatory home warranty insurance
New small job contracts category
Additional home warranty insurance benefits for homeowners
Definition of ‘related’ corporations to a builder or developer
Click on this link for full details of the changes.
- home warranty insurance
- statutory warranty
- contract requirements.
The changes will commence in two stages, the first took effect on 25 October 2011, while second will begin on 1 February 2012.
Particularly for our clients, Investors buying house and land packages, off the plan units, new units, and home renovators should be aware of the following:
New small job contracts category
Residential building contracts must be in writing and include a number of requirements.
Commencing 1 February 2012, a new category of written contracts for ‘small jobs’ worth between $1,001 and $5,000 will come into effect. A small job contract must be in writing, dated and signed on behalf of both of the parties and contain the following information:
- the names of the parties, including the name and number of the holder of the contractor licence
- a description of the work (including any plans and specifications for the work)
- the contract price, if known.
So if you are renovating say a kitchen or a bathroom and the works are between $1,001.00 and $5,000.00 make sure you get it in writing with the builder or contractor.
Click on this link for full details of the changes.
Definition of completed
The term ‘completed’ has a very important role in the legislation because it marks the beginning of the time periods for statutory warranties and home warranty insurance.
There is now a clear definition of what is meant by ‘completion’.
Residential building work is ‘complete’ when it is completed in accordance with the requirements of the contract.
If there is no contract, or the contract doesn’t specify ‘completion’, the work is regarded as ‘complete’ when it can be used for its intended purpose and is free of major defects. The earliest of the following events can be used to determine when this occurs:
- the date the builder ‘handed over’ the project to the owner
- the date the contractor last carried out work (other than remedying minor defects)
- the date of the issue of an occupation certificate, or
- 18 months after the owner–builder permit was issued (in the case of an owner–builder).
Proportionate liability
Under the new laws when a homeowner takes action against their builder or developer for defective or incomplete work, the builder or developer will not be able to limit their responsibility to the part of the work for which they were directly responsible, regardless of the provisions contained in the Civil Liability Act 2002.
This does not mean that the builder or developer cannot use the provisions contained in the Civil Liability Act in separate legal proceedings
A full list of the changes are below:
October 2011 changes
Requirement to notify home warranty insurers in writing
Time limits on home warranty insurance claims
Claiming outside the home warranty insurance period
A notification of a loss includes a 'related' loss
Ten year limit
Definition of completed
Definition of developer
Proportionate liability
Trader–initiated disputes
February 2012 changes
Statutory warranty periods
Threshold for mandatory home warranty insurance
New small job contracts category
Additional home warranty insurance benefits for homeowners
Definition of ‘related’ corporations to a builder or developer
Click on this link for full details of the changes.