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The NSW Fair Trading and Building Legislation Amendment Bill 2026 has now passed both houses and received assent (although at the time of publication the majority of the amendments await commencement on a date or dates to be proclaimed).
We provide a quick recap of the major changes, with few amendments having been made by the Legislative Council.
The Bill:
- replaces the concept of a business day with a working day under the Building and Construction Industry Security of Payment Act, but not the definition, to align it with the Interpretation Act
- amends the Design and Building Practitioners Act to remove the restriction on the regulation making power to exempt building practitioners from professional indemnity insurance. The current regulation making power requires a new regulation every 12 months. The amendment removes that, meaning that the exemption for building practitioners may continue indefinitely, until such time as the market matures sufficiently to offer professional indemnity insurance to building practitioners
- broadens the coverage of Decennial Liability Insurance (DLI), under the Strata Schemes Management Act, to respond to a relevant defect, as opposed to a serious defect, taking DLI away from following the nomenclature of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act and closer to the HBA major defect definition. This places DLI closer towards the type of cover which was available under home warranty insurance and its predecessors, in terms of standing behind statutory warranties, albeit only for high rise, multi-unit developments
- increases the powers of NSW Fair Trading and the Building Commission to deal with licences, including additional powers to cancel, suspend or vary licences. In particular, the Building Commission would be empowered to specifically cancel, suspend or vary a licence for holders who are discovered to be unqualified
- establishes the Building Administration Fund (replacing the Home Building Administration Fund), a new (broader) fund intended to pay for the costs of resolving building disputes, administering building legislation and generally engage with the industry
- broadens the powers of the Building Commission to obtain information for the purposes of investigating offences and enforcing building legislation
- improves efficiency in two lot strata schemes by reducing the amount of formality required for one owner to issue notices to the other.
Decennial liability insurance
Although other parts of the Bill will have immediate effect on the date of assent (14 August 2026), the significant changes listed above are to take effect on a date or dates yet to be proclaimed.
For those keenly awaiting decennial liability insurance (DLI), two insurers are believed to have products with the Building Commission for approval, so there are a number of steps yet before DLI is a commercial reality in NSW.
The recent deferral of the building bond increase from two to three per cent to 1 July 2028 might provide guidance as to when DLI is expected to be in place as a market alternative.
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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