Changes to Home Building Act

The Home Building Act 1989 deals mainly with the the licensing and regulation of builders performing residential building work. However, it also gives the benefit of warranties and insurance in respect of such work. On 15 January 2015 certain retrospective amendments to the Act commenced. Also, on that date the Home Building Regulation 2014 commenced. The position is now as follows:

1. The term “residential building work” means any work involved in:
(a) the construction of a dwelling; or
(b) the making of alterations or additions to a dwelling: or
(c) the repairing, renovation, decoration or protective treatment of a dwelling. The term also includes “specialist work” defined to include plumbing and electrical wiring work. However, excluded from “residential building work”  are any work (other than specialist work) the cost of which does not exceed $5000.00 and internal painting work.

2. The term “dwelling” includes a swimming pool or spa, cupboards and vanity units affixed to the dwelling, driveways, retaining walls and fences.
3. Warranties by a licensed contractor are implied into a contract to do residential building work including one that the work be done with due care and skill.
4. The benefit of the warranties is extended to a successor-in-title to the person entitled to the benefit of the statutory warranties.
5. The warranty period is 6 years after completion of the work for major defects and 2 years for all other defects.
6.    A “major defect” is defined as a defect in a major element of a building (i.e. a load-bearing component of a building that is essential to its stability or any part of it or a fire safety system or waterproofing) that is attributable to defective design, defective or faulty workmanship, defective materials etc. that causes or is likely to cause:
(i)  the inability to inhabit or use the building or part of it;
(ii)  the destruction of the building or part of it; or
(iii) the threat of collapse of the building or part of it.

7. With regard to the commencement of statutory warranties, for new buildings in a strata scheme the completion of residential building work will occur when an occupation certificate is issued authorising the occupation and use of the whole building.
8. A licensed contractor is required to take out insurance under the Act in respect of the residential building work to be done under a contract if the contract price exceeds $20,000.00. It covers the person on whose behalf the work is being done or successor-in-title against the risk of loss resulting from non-completion of the work because of the insolvency, death or disappearance of the contractor.

January 2015