Staged commencement dates for the Home Building Amendment Act 2014 have been proclaimed.  Our updates in respect of these amendments can be found here and here.

The amendments to commence on 15 January 2015 include:

  • the change of the name of ‘home warranty insurance’ to ‘insurance under the Home Building Compensation Fund’ (IUHBCF);  
  • deeming issue of an occupation certificate as the date for completion of new buildings in a strata scheme;  
  • increasing the maximum penalties for unlicensed contracting by or seeking work by or for unlicensed persons ($55,000 or 12 months imprisonment or both);  
  • the replacement of the distinction between structural and non-structural work defects with ‘major defect’ and other defects;  
  • introduction of the new defence of reasonable reliance on instructions given by a relevant professional acting for the person for whom the work was contracted to be done;  
  • the mandate to a court or tribunal that rectification of defective work by the responsible party is the preferred outcome;  
  • clarification that a contract of IUHBCF extends to residential building work done by the contractor by way of rectification of the original work (and that a separate contract of insurance is not required in respect of rectification work);  
  • the exemption of owner builder work from the requirement for IUHBF;  
  • the introduction of the register of insurance particulars in respect of IUHBCF policies entered into on or after 1 July 2010;  
  • public online access to search a contractor’s history on line, including prosecutions, penalties IUHBF claims, instances of breaches of Tribunal directives or orders, public warnings, formal cautions and licence cancelations or suspensions;  
  • the removal of:  
    • ­concrete tennis courts and the like; and  
    • ornamental ponds and water features and other structural ornamentation from the definition of ‘dwelling’;
  • other amendments

Some of the amendments have been proclaimed with a later commencement date, being 1 March 2015.  These include:

  • the limits upon the type of progress payments that may be provided under the contract;  
  • the mandatory statement concerning termination rights;  
  • the increased maximum deposit for residential building work (now 10% of the contract price, whatever the contract sum);  
  • the new or clarified duties of persons having the benefit of statutory warranties including the:  
    • ­duty to mitigate;  
    • ­duty to give the contractor notice in writing of the alleged breach within six months after the breach becomes apparent;  
    • ­duty not to unreasonably refuse a contractor access to the work the subject of the alleged breach; and  
  • other amendments.

Although no reason for the stage commencement has been communicated, we understand it relates to the need to amend the standard form contracts, including the Department of Fair Trading’s, to respond to and comply with the new laws.

In further developments, the new Home Building Regulation 2014, accomodating the amending Act and introducing further changes was published on 12 December 2014 and can be found here.