The Home Building Amendment Act 2014 (NSW) (the
Amending Act) will significantly change the Home Building Act
1989 (NSW) (Home Building Act) and comes into force in late
2014 and early in 2015.
The Amending Act will commence in three stages on 31 December
2014, 15 January 2015 and 1 March 2015.
The Amending Act contains a significant number of changes to
the Home Building Act that impact all facets of residential
building work, from the contractual terms of the contracts
(including the way disputes are handled) to the insurance required
Many sections of the Amending Act are retrospective and will
apply to all contracts, disputes and insurances, regardless of
whether the contracts were entered into prior to the commencement
of the Amending Act or otherwise.
Changes to Statutory Limitations (Commences 15 January
Under the current Home Building Act, defects are classified into
structural defects (attracting a six year warranty period) and
non-structural defects (attracting a two year warranty period).
The Amending Act will amend this regime by classifying defects
into two different categories, 'major defects' and 'any
other defect'. Major defects (which will be a tighter concept
than the previous classification of structural defects) will
attract a six year warranty period, while all other defects attract
a two year period.
It is expected that fewer defects will be covered by the six
year warranty period.
Defence to Statutory Warranties (Commences 15 January
The Amending Act includes an additional defence for contractors
who breach the statutory warranty provisions of the Home Building
Act. The additional defence arises where defects arose from the
reasonable reliance by the contractor on instructions given by a
third party professional (acting for the person for whom the work
Duty of Care (Commences 1 March 2015)
Under the current Home Building Act, a contractor owes a duty of
care to the owner of land to carry out all work in a
"workmanlike manner". The Amending Act will amend this
duty of care so that work is now to be completed with "due
care and skill". At this stage, it is uncertain whether this
is a higher or lower standard of care for the contractor.
Duty to Mitigate Loss (Commences 1 March 2015)
The Amending Act will require a party who takes the benefit of
the statutory warranty (generally the owner of the land) to:
mitigate its loss resulting from a breach by the contractor of
the Home Building Act
make "reasonable efforts" to contact the contractor
and notify it of the defect within six months of the defect coming
to the owner's attention
allow the contractor reasonable access to the property to
rectify the defect.
Additional Warnings in Contracts for the Sale of Land
(Commences 15 January 2015)
The Amending Act has removed the applicability of the Home
Building Act for certain property transactions for which consumer
warnings must be inserted into contracts for the sale of land.
These include owner builder contracts and contracts for newly
excluded buildings (eg buildings which were designed, constructed
or adapted for commercial use as tourist, holiday or overnight
Strata Schemes (Commences 15 January 2015)
The Amending Act will govern the date for practical completion
of residential building work in a new building in a strata scheme.
The date for practical completion will be the date that an
occupational certificate is issued which authorises the occupation
and use of the whole building.
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.
K&L Gates has been awarded a 2012 EOWA Employer of Choice
for Women citation acknowledging our commitment to workplace
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).