As of 1 March 2015, major changes to the Home Building Act
1989 (NSW) ("the Act") came into force. Generally,
residential building work involves the following:
The construction of a dwelling, or
Making of alterations or additions to a dwelling, or
Repairing, renovation, decoration or protective treatment of a
Summary of the changes
Some of the key changes imposed under the amended legislation
are as follows:
Statutory warranties will be implied into subcontracts.
Under the new legislation a more detailed contract is required
for any building work exceeding $20,000.00. This is an increase to
the previous threshold of $5,000.00.
The cap on deposits that a builder may request for work over
$20,000.00 has been increased from 5% to 10%.
Under the new requirements any residential building work over
$20,000.00 requires a detailed contract that includes a progress
payment schedule and termination clauses contract for residential
For contracts over $20,000 a new consumer checklist must be
For contracts over $20,000 there must be no term that provides
that residential building work under the contract was taken to have
commenced prior to the residential building work being performed on
The wording of the statutory warranty set out in section 18B(a)
of the Act has changed so that a warranty must be provided that
work will be performed with due care and skill and in accordance
with the plans and specifications set out in the contract.
A streamlined version of the mandatory consumer building guide
must now be provided to consumer before entering into a contract.
The purpose of the revised guide is to clearly set out the rights
and responsibilities of both parties to the contract.
Failure to comply
If non-compliant contracts are entered into there is a
Builders will be unable to claim progress payments;
Those contracts or part of those contracts may be unenforceable
under section 10 of the Act; or
Builders may be liable to pay fines arising from offence
Whether you are a builder or endeavouring to embark on your own
home construction or renovations, ensure that you are on top of the
new requirements under the Act.
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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