Anybody buying a newly completed home or builders doing the
construction should be aware of changes to laws governing building
that came into force in January. The laws were brought in by the
NSW government to try and fix problems regarding shonky builders,
but there are complaints that in fixing one problem the new laws
The Home Building Amendment Act introduces a 12 month
prison term for builders who repeatedly perform unlicensed
construction work. They also crack down on so-called phoenix
companies that repeatedly go broke and resurface under a new
trading name. Construction work worth less than $5,000 can now be
done without a licence, but specialist work like plumbing and
electrical jobs will still need a licence no matter the cost.
Critics warn that this could open a loophole for unqualified
workers to tear down asbestos or lead ridden buildings or erect
potentially dangerous constructions like balconies or on
But one of the changes that has raised most concern is that
under the new laws homeowners have the time reduced from six to two
years during which they can pursue claims for shoddy work and
building faults. The exception is if the fault is deemed a
"major defect", but builders and owners could be left
arguing over the definition of what makes a defect
"major". The new law states "major defects"
would include flaws that make a building uninhabitable, likely to
collapse, or part of the building is unable to be used for its
purpose. But the warranty for major defects including waterproofing
and safety systems lasts only six years. Again definitions could be
Critics point out that what might be a hairline crack in year
two could grow into something far more serious by year six. Owners
Corporation Network executive officer Karen Skinner warns the
legislation leaves apartment owners on their own in the face of any
problems that emerge in a newly constructed building.
Homeowners who have concerns about their buildings, especially
those living in apartments, would be wise to seek legal advice to
see where they stand under the new laws. It can take many years to
rally owner corporations to take action which would put them
outside the new two year limit. It would be best to act quickly
before the time limit expires or the building problem worsens.
Builders would also be wise to get legal advice on how changes
to the law might impact on them. Jail and hefty penalties are
University of NSW research found two thirds of new apartment
blocks had construction defects.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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