New laws to protect NSW home buyers to be introduced in 2015

A suite of new laws will be introduced in mid-January next year to protect home buyers, renovators and home builders, according to NSW Minister for Fair Trading Matthew Mason-Cox.

To be introduced on 15 January 2015, the new laws will protect consumers against incomplete or subpar work on their homes and will look to ensure builders and tradespeople are properly regulated, said Mason-Cox.

"The decision to commence the new laws on 15 January followed extensive consultation with industry and consumer groups,” he said.

"The changes are part of the NSW government's plan to ensure NSW’s important building sector remains healthy and continues to grow, while making sure consumers remain appropriately protected.’’

The cornerstone of the home building reforms is a new definition of ‘major defect’. This changes include fire safety and waterproofing issues being redefined as major elements in a building’s structure for the first time.

“By including fire safety systems and waterproofing as major elements of the building, the new definition broadens the scope of what may be considered a ‘major defect’, and provides access to the six year warranty period, offering consumers greater protection in these two very important areas,” Mason-Cox said.

“The new laws clearly define statutory warranties to avoid costly litigation over defective work. The warranty period for major defects continues to be six years and two years for all other defects.’’

Illegal phoenixing, whereby a building company collapses and then is reborn under a new name to avoid their debts, will be come under Fair Trading's microscope.

“Changes to the licensing system will allow NSW Fair Trading to refuse a licence application or revoke a licence if a builder has a history or involvement in a failed company or an unreasonable number of complaints or disciplinary matters against them,” he said.

Home building contract requirements are also being amended to maximum cap deposits on work over $20,000 to 10%, from 5%, to assist with cash flow for builders.

“To ensure consumers are protected, the new laws also require builders to include a progress payment schedule in the contract which accurately reflects the work that has been done,” he said.

“This will help ensure that consumers do not end up paying the builder more than the work that has been completed."