CHANGES TO HOME BUILDING LAWS AND HOW THEY AFFECT YOU AND YOUR
Changes to home building laws took effect in early 2015, with
the commencement of the Home Building Act 2014.
The changes are in two stages, as follows:
Changes to licensing, owner-builders, home warranty insurance,
defects, statutory warranties and dispute resolution which
commenced from 15 January 2015; and
Changes to contracts which will commence from 1 March 2015 to
allow for the changes to be reflected in standard contract
You need to prepare for the changes and be aware of how the
changes will affect how your business operates. We provide a brief
summary of the major changes below:
Any licence application you make may be revoked or refused if
you have had a history of involvement in failed businesses,
excessive complaints or disciplinary matters. Further, the
threshold for requiring a licence for building and trade work is
increasing from $1,000 to $5,000 for general trade work (including
labour and materials). Specialist work which includes plumbing,
electrical and air conditioning work will retain a nil threshold
and therefore require a licence for such work irrespective of the
If you are an Owner-Builder, you will no longer be able to
purchase Home Building Compensation Insurance (formally Home
Warranty Insurance) unless it is provided by a private insurer.
Further, it will no longer be mandatory for you to obtain statutory
warranty insurance if you intend to sell the property within the
six year warranty period. In addition, you will be required to
declare the identity of all owners of the land to ensure all owners
of the land are unable to obtain another permit for a different
property for five years.
HOME WARRANTY INSURANCE
The Home Warranty Insurance Scheme will now be known as the Home
Building Compensation Fund.
DEFECTS, STATUTORY WARRANTIES AND DISPUTES
The new laws recognise that the most efficient way to resolve a
dispute is for the original builder to fix the work. To support
this, courts and tribunals will need to consider rectification as
the preferred outcome of any dispute. To prevent work being
stalled, a home owner will not be able to unreasonably refuse you
access to their property. The new laws will also see the
introduction of the concept of a 'major defect' to replace
the current definition of 'structural defect'. Major
defects continue to be covered by the 6 year statutory warranty and
all other defects continue to be covered by a 2 year statutory
Changes to contracts will include the following:
A more detailed contract is only required for work over
$20,000. Contracts between $5,000 and $20,000 will still require a
'minor works' contract
Progress payment schedules and termination clauses must be
included in contracts over $20,000
The maximum deposit for work over $20,000 will increase to
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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Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
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