The Home Building Amendment Act 2011 is now in force. It amends
the Home Building Act 1989, the Home Building Regulation 2004 and
the Civil Liability Act 2002.
The Overview of the Bill, before it was passed by Parliament,
stated that the objects of the Bill (amongst others) are:
To expand the list of persons who are not required to be
beneficiaries under a contract of home warranty insurance because
they are "related" to a developer or contractor to
include related entities and related parties under the Corporations
To provide a comprehensive scheme for determining when
residential building work was completed
To align the statutory warranty periods for home building work
with those for home warranty insurance (being six years for
structural defects and two years for other defects)
To clarify the application of the Act to developers so as to
include as a developer the owner of land on which a developer does
residential building work,
To raise the threshold for the requirements for written home
building contracts from $1,000.00 to $5,000.00 and to introduce a
written "short form" contract requirement for work
between $1,000.00 and $5,000.00,
To raise the threshold for the requirement for home warranty
insurance, and a five day cooling off period, for residential
building work, from $12,000.00 to $20,000.00.
To reduce the $500.00 excess for home warranty insurance claims
To increase the minimum home warranty insurance cover from
$300,000.00 to $340,000.00,
To exempt a liability arising from a breach of statutory
warranty under the Act from proportionate liability under the Civil
Liability Act 2002.
Some changes came into effect on 25 October 2011, and these
Home owners may, in various circumstances that are set out in
the Act, be able to make delayed home warranty insurance claims
outside the insured period if certain conditions are met
Home owners must notify the insurer in writing if they become
aware of any defects or incomplete work that may be subject to
For home warranty insurances dated before 1 July 2010, all
claims must be lodged within 10 years of the work being
Limitations on the use of proportionate liability to ensure
that builders, not sub-contractors, are fully responsible for
compensating home owners for defective residential building
Other changes will come into effect on 1 February 2012,
Changing the statutory warranty periods to six years for
structural defects and two years for non-structural defects (which
is in line with the Home Warranty Insurance warranty periods). The
current statutory time limits are seven years for both structural
and non-structural defects
The threshold above which residential building work must be
covered by Home Warranty Insurance is raised from $12,000.00 to
The introduction of a new simpler requirement for written
contracts for "small jobs" worth between $1,001.00 and
$5,000.00. A small job contract must be in writing, dated and
signed on behalf of both of the parties and contain certain minimum
information. Full Home Building Contracts will only be required for
work over $5,000.00
The minimum level of Home Warranty Insurance cover is increased
from $300,000.00 to $340,000.00
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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