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The Home Building Act reforms

On 1 February 2012, the second phase of changes to the Home Building Act came into effect. These changes affect builders and home owners doing residential building work in NSW.

By law, tradespeople must give consumers a copy of the Consumer building guide, issued by Fair Trading, before they enter into a contract for residential building work worth more than $5,000.

The Consumer building guide has been revised to reflect the changes and will now be available as a pdf file on Fair Trading’s Consumer building guide web page.

NSW Fair Trading will no longer print copies of the Consumer building guide. In the future, builders and tradespeople can print the Guide from Fair Trading’s website to give to consumers before they sign a residential building work contract.

Some building industry associations also provide the Guide as part of their sample contracts and traders can contact their industry association for more information about this service.

Copies of the Guide dated before January 2012 are no longer accurate. Traders should use the updated guide and updated contracts as soon as possible. However, traders will not be subject to enforcement action by Fair Trading if they continue to use older versions of the guide, or contracts that include older versions of the guide, during the first half of 2012.

Tradespeople will be kept up-to-date with any future changes to the Guide via the Foundations email alerts.

Other key changes which came into effect on 1 February 2012:

  • simpler written home building contracts are required for small jobs worth between $1,001 and $5,000
  • all residential building work worth more than $20,000 must be covered by mandatory home warranty insurance. The previous threshold was $12,000
  • aligning the time periods for statutory warranties on home building work with those for home warranty insurance (ie. 6 years for structural defects; 2 years for non-structural defects). The previous statutory time limit was 7 years for both structural and non-structural defects
  • the minimum level of home warranty insurance cover is increased from $300,000 to $340,000
  • home owners only pay $250 to make a home warranty insurance claim, rather than the current $500 cost
  • strengthening the definition of parties ‘related to’ a builder or developer to prevent abuse of the home warranty insurance scheme.

For more detailed information about these changes, go to the Home Building Amendment Act 2011 page on Fair Trading’s website.

source: NSW Fair Trading

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