New Home Building Laws in NSW – What you need to know

January 2015 saw changes in NSW law that govern the building of new homes, unlicensed construction work and small construction projects. In an effort to address issues with unscrupulous builders, it seems that some new problems may have been created. Here we discuss these changes and the potential traps for builders and homeowners.

1. The Home Building Amendment Act has introduced a 12 month prison term for builders who repeatedly perform unlicensed construction work. Also facing closer scrutiny are phoenix companies that continually resurface under a different trading name following claims of insolvency.

2. The Act also states that construction work that is worth less than $5,000 can now be done without a licence (however, specialist work such as plumbing and electrical will still be required to be carried out with a licence, regardless of cost). The concern is that this new law could bring about a loophole where unqualified workers perform small construction works with serious consequences. For example, the building of a balcony, removal of asbestos or small structural changes to a building.

3. The law now also states that claims for building faults need to be pursued within 2 years of a building’s completion – reduced from the previous 6 year window. Although major defects are exempt from this law, the definition of what constitutes a major defect can be open to interpretation. The new law states that major defects would include faults that make a building uninhabitable, likely to collapse or make a part of the building unusable. However, if a hairline crack in a wall that appeared in year 2 grew far more serious by year 6, homeowners would no longer be covered for warranty once the crack had progressed in severity after the 2 year warranty was up.

Both builders and homeowners of newer buildings are urged to seek legal advice to see how they are potentially affected by these new laws. Contact the experts at WMD Law Office on 9525 8688 for guidance.