Recent Amendments to the Home Building Legislation

21 January 2013

The NSW Government has recently implemented some significant changes to the Home Building Act 1989 (NSW).

Recent Changes

Stage 1 commenced on 25 October 2011 and Stage 2 commenced on 1 February 2012.

Changes to the Home Building Act 1989 (HBA) include:

• Definition for the date of Completion to overcome the previous difficulties faced by Owners Corporations in establishing the date of Completion;
• Exclusion of the Civil Liability Act 2002 for residential building work;
• In respect of building contracts entered into after 1 February 2012, a claim to enforce statutory warranties must be commenced within 6 years for structural defects and 2 years for other defects from the date of completion of the works;
• Insurance Claims have an extension period of 6 months for any losses that become apparent in the last 6 months of the period of insurance;
• Beneficiaries must enforce statutory warranties after loss becomes apparent;
• Developer includes the owner of land who also owns or will own four or more units in the development even if not a party to the building contract.
• Insurance threshold increased to $20,000.

Application of Amendments

With limited exceptions, the amendments extend to:

• Residential building work commenced or completed before the amendments;
• A contract of insurance entered into before the amendments;
• A loss or liability that arose before the amendments.

Some important exceptions include the following:

• The amendments do not affect any Court or Tribunal decision made before the amendment.
• The 7 year statutory warranty is not reduced in respect of building contracts entered into before 1 February 2012. The new definition of completion, however, will apply.