CHANGES TO HOME BUILDING ACT 1989

Three years ago the Government introduced the Home Building Legislation Amendment Act 2001 which made substantial changes to the Home Building Act 1989 (NSW) which regulates the home building industry in New South Wales.

Although various changes introduced by the amendments commenced on 1 July 2003 a number of changes have commenced more recently. Some of the more important changes include the following:

Dispute Resolution Procedures

Effective from 1 July 2003, a dispute between a consumer and building contractor will be referred to a Building Inspector whose role is to meet the consumer and Contractor on site, inspect the works the subject of the dispute and help the parties reach a resolution.

If the dispute cannot be resolved, the Building Inspector may issue a rectification order requiring the contractor to take steps to ensure that the work is completed or the defects or damage rectified.

The rectification order may also require the consumer to comply with certain conditions including the payment of monies.

The order will require compliance by a specified date.

Non-compliance with the rectification order by the contractor may result in disciplinary action as well as other action taken by the consumer.

The parties may still apply to the Consumer Trader and Tenancy Tribunal for resolution of the dispute but only when the Tribunal is satisfied in appropriate circumstances that the subject matter of the dispute has first been investigated by a building inspector.

Requirement for Building Consultants to be licensed

Under the changes, Building Consultants who for fee undertake inspections and provide reports to consumers must:

• be licensed
• provide the consumer with a building consultancy agreement which complies with the Act
• provide the consumer with information in the prescribed form that explains the operation of the Home Building Act and the procedures for the resolution of disputes under the contract and in respect of insurance.

Changes to Home Building Contracts

Since 16 February 2004 home building contracts must contain:

• Provisions for cooling off period
• Compulsory contract terms
• A checklist of questions in a prescribed form.

Builders must also supply to consumers information in the prescribed form which explains the operation of the Home Building Act and the procedures for the resolution of disputes

Developers are also required to provide a purchaser of land on which residential building work has been performed with consumer information which explains the operation of the contract of insurance and the procedures for the resolution of disputes.