Home building reforms to provide industry clarity

Jennifer DukeDecember 7, 2020

A position paper setting out reforms to the 1989 Home Building Act was released yesterday by fair trading minister, Anthony Roberts.

Created to address some of the unnecessary complexities for New South Wales, that had been causing disputes between homeowners and builders, so far there has been a positive reaction from the industry to the proposed reforms.

“In July last year the Government released an Issues Paper Reform of the Home Building Act for consultation and more than 600 responses were received," said Roberts.

After 15 months of consultation with industry, building groups and community, the proposed reforms cover a number of aspects of home building legislation. Dispute resolution, statutory warranties, home building contracts, owner-builders' obligations, home warranty insurance and licensing are all covered.

Roberts said that the aim was to provide regulation and protection for homeowners, while supporting building activity and investment in NSW.

Master Builders Association NSW executive director, Brian Seidler, said that the reforms are a good foundation and highlighted a few of the standout changes.

"By providing a clear definition of what constitutes a major defect, the Government is ensuring that clarity and certainty are introduced into the home building sector," said Seidler.

"Lifting the general works contract threshold from $5,000 to 20,000 will remove unnecessary red tape for smaller jobs."

The allowance of a termination clause was also said to be a good way to ensure obligations between builders and home owners are clear.

Housing Industry Association NSW executive director, David Bare, was similarly positive about the changes.

Bare said that the reform had been undertaken with the industry in an open and transparent manner.

Urban Tasforce CEO, Chris Johnson, has also put his hand up in approval of the proposed reforms.

“Too much time and money is currently spent on litigation between owners corporations and developers in the resolution of defects that can be better spent on ensuring houses and apartments are well built and managed,” said Johnson. 

“Most building contracts have a sum of money retained to cover the resolution of defects that can become apparent as a building is used and weathers and clearly the builder needs to ensure that any defects are quickly rectified. Unfortunately disputes have developed over the rectification of defects and the reforms now reduce ambit claims, require homeowners to give builders access to make rectification and require homeowners to notify defects early. These are all changes that can lead to a better relationship between all parties.”

You can read the review of home building legislation here on the Fair Trading website.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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