Changes to the Home Building Act are now in force

As of 1 March 2015, major changes to the Home Building Act 1989 (NSW) ("the Act") came into force. Generally, residential building work involves the following:

  1. The construction of a dwelling, or
  2. Making of alterations or additions to a dwelling, or
  3. Repairing, renovation, decoration or protective treatment of a dwelling.

Summary of the changes

Some of the key changes imposed under the amended legislation are as follows:

  1. Statutory warranties will be implied into subcontracts.
  2. Under the new legislation a more detailed contract is required for any building work exceeding $20,000.00. This is an increase to the previous threshold of $5,000.00.
  3. The cap on deposits that a builder may request for work over $20,000.00 has been increased from 5% to 10%.
  4. Under the new requirements any residential building work over $20,000.00 requires a detailed contract that includes a progress payment schedule and termination clauses contract for residential building work.
  5. For contracts over $20,000 a new consumer checklist must be included.
  6. For contracts over $20,000 there must be no term that provides that residential building work under the contract was taken to have commenced prior to the residential building work being performed on the land.
  7. The wording of the statutory warranty set out in section 18B(a) of the Act has changed so that a warranty must be provided that work will be performed with due care and skill and in accordance with the plans and specifications set out in the contract.
  8. A streamlined version of the mandatory consumer building guide must now be provided to consumer before entering into a contract. The purpose of the revised guide is to clearly set out the rights and responsibilities of both parties to the contract.

Failure to comply

If non-compliant contracts are entered into there is a possibility that:

  1. Builders will be unable to claim progress payments;
  2. Those contracts or part of those contracts may be unenforceable under section 10 of the Act; or
  3. Builders may be liable to pay fines arising from offence proceedings.

Whether you are a builder or endeavouring to embark on your own home construction or renovations, ensure that you are on top of the new requirements under the Act. 

For further information contact:

Rachel Mauceri, Lawyer
Phone: +61 2 9895 9236