NSW consumers will have greater protection from shoddy construction work under tougher new home building laws starting 15 January 2015.
“Last year, the NSW Government announced several significant changes to the home building laws aimed at modernising practices in the industry, increasing confidence in the sector, and strengthen consumer protection, NSW Fair Trading Minister, Matthew Mason-Cox said.
“From this day, builders and traders face up to 12 months in prison if they are repeat offenders of unlicensed contracting work or don’t have the required insurance.
“Licence eligibility has been tightened to stamp out illegal ‘phoenixing’, which is where a company closes down leaving large unpaid debts, only to re-emerge as a new company trading under a different name.
“At its core, these new home building laws are about ensuring NSW consumers are appropriately protected without creating unnecessary red tape and regulation that will stifle industry growth and investment.’’
Mr Mason-Cox said new laws included changes to licensing to modernise industry practices in NSW, in accordance with other jurisdictions
As part of the changes, minor residential work worth under $5,000 can now be carried out without a licence. “This will reduce ‘red tape’ for consumers who want to get minor work done around their properties, and assists builders,’’ Mr Mason-Cox said.
“This change recognises the cost structure for building work and brings NSW into line with Victoria, WA and Tasmania all of which already have a threshold of $5000 or more. “The threshold in NSW, which was $1,000, has not been increased since 2004, despite the increase of cost over time of building work and materials.’’
Specialist work such as plumbing, electrical and air conditioning will still need a licence regardless of the cost of work.
“Importantly, consumers also continue to be protected by guarantees under the Australian Consumer Law (ACL), which is enforced by NSW Fair Trading and the Australian Competition and Consumer Commission,’’ Mr Mason-Cox said.
“Under the ACL, a consumer can request an itemised bill outlining prices, labour hours, cost and use of materials. “The builder must give the consumer the itemised bill, within seven days of the request, or face fines of up to $15,000 for a company and $3000 for an individual.’’
While a contract for works under $5,000 was no longer mandatory, a consumer and builder could still agree to enter into a written contract for the work, if they wanted to, Mr Mason-Cox said.
“If the builder won’t agree to signing a written contract, the consumer is free to find a builder who will, if that is what they wish,’’ he said.
A key change in the new legislation is the recognition, for the first time, of fire safety systems and waterproofing as major elements in a building’s structure.
“This new definition ensures that fire safety systems and waterproofing can be considered a ‘major defect,’ and gives consumers access to the six year warranty period, offering greater protection from poor workmanship in these important areas,” Mr Mason-Cox said.
The warranty periods for defects in buildings continue to be six years (for major defects) and two years for all defects. Mr Mason-Cox said “we believe these new reforms respond to the changing landscape of the NSW residential housing market, as well as bring the home building laws into the 21 century.’’
“For the industry, these measures deliver a reduction in unnecessary red tape, clearer legal definitions, particularly in relation to defects, and ensure fewer disputes between homeowners and builders.’’
Some parts of the Amendment Act will come into effect on 1 March 2015, giving builders and industry time to make the transition to new requirements. These changes will require all contracts for work over $20,000 to include a progress payment schedule in the contract which accurately reflects the work done and materials bought.
For detailed changes on new Home Building Act laws, visit NSW Fair Trading at:
“I encourage consumers to contact NSW Fair Trading on 13 32 20, if they have any further queries,’’ Mr Mason- Cox said.