Building Regulations and Insurance – NSW Home Building Act

On the 15th January 2015, some changes were made to the NSW Home Building Act. The most significant changes were regarding warranties provided by home builders. It is important that anyone building a home is aware of the changes as you may otherwise be left open to excessive and unwarranted charges for rectification works.

Read on to learn everything you need to know about the changes. If you need any assistance with major defect inspection, please don’t hesitate to contact me.


The NSW Home Building Act 1989 – Key Changes

The blow changes are applicable to all residential building work. This includes construction, alternation, and addition to a dwelling as well as repairs, renovations, decoration or protective treatments.

You need to be aware of the following:

  • Major defects now have a statutory warranty of 6 years, whilst all other defects have a warranty of 2 years. The warranty period commences as soon as building works are completed.
  • The term ‘structural defect’ is no longer used as standard. Defects caused by defective design, poor quality workmanship/materials or failure to comply with the National Construction Code are now referred to as ‘major defect’.
  • Detailed contracts are now required for all building projects exceeding $5000 – projects below this amount no longer require a contract, but you should still obtain a written agreement.
  • Home Building Cover must be a minimum of $340,000 for any project costing more than $20,000
  • Progress payment schedules are required for projects exceeding $20,000, along with a termination clauses contract.

Useful Resources – Building Contracts

You can download home building contracts from the Department of Fair Trading, the links are provided below.

Home Building Contract for Work Between $5,000 and $20,000

Home Building Contract for Work Over $20,000


What Happens if a Contract Fails to Comply?

Builders who issue non-compliant contracts place themselves at significant risk. They may be:

  • Barred from claiming progress payments
  • Unable to sue for damages if any aspect of the contract is breached by another party to the contract
  • At risk of significant penalties incurred during offence proceedings

It is important that you read through your contract thoroughly to ensure it is compliant with the Act. Builders must hold all relevant licences for the planned building works, and any variations to the contract should be crosschecked against mandatory requirements prior to signing.


Identify Defects Early – Engage an Experienced Building Inspector

Building a new home should be exciting, and when you’re spending good money you don’t expect to receive poor workmanship. Choosing a reputable builder with a proven track record of success is the best way to reduce the risk of encountering major defects down the line, but regardless they may still occur.

As a building consultant with more than 40 years’ experience in the construction industry, I am highly skilled at early stage detection of non-compliant building works and residential building defects. If you are about to embark on a residential construction project, having a qualified building inspector on your team is essential. Early identification of potential issues will give you the best chance of ensuring they are rectified prior to project completion, vastly reducing your chances of potential legal disputes and hassles further down the track.


Contact SBDIR Today

Having proper contracts in place is important for both builders and homeowners. I am happy to offer advice regarding contracts and the changes made to the Home Building Act, and I am also here to carry out building inspections on an as-needed basis.

Please contact me today on 0419 416 040 or submit an enquiry through our website. I look forward to working with you.