Important amendments to the Home Building Act 1989 (NSW) passed by NSW Parliament 

Residential building claims for defective works have continued to grow significantly over the last decade, resulting in an increased focus on legislative reform in the NSW construction industry, most notably in respect of the Home Building Act 1989 (HBA).

Against the background of a weak residential construction market in 2011, the NSW Government sought to respond to the most pressing concerns of home owners and industry by introducing amendments to the HBA designed to “cut red tape”. The Home Building Amendment Act 2011 (NSW) introduced a package of reforms affecting home warranty insurance and claims, enforcement of statutory warranties and proportionate liability.  However, these amendments only represented an initial step in the reform of the HBA, with more wide-reaching reforms now passed following a comprehensive consultation process during 2012 and 2013.

The Home Building Amendment Bill 2014 (NSW) (the Bill) had its second reading in the NSW Parliament on 6 May 2014, with its stated intention being “to ensure home building laws reflect current practice and reduce any unnecessary red tape for industry while providing consumers with appropriate protection”.  The Bill was passed unamended by the NSW Parliament on 28 May 2014 and, once proclaimed, will significantly amend the HBA. The key aspects of the reforms are noted below.

“Structural Defect” now “Major Defect”

The statutory warranties regime is the basis of the consumer protection framework in the HBA and creates legally enforceable standards for workmanship, enabling consumers to pursue remedies in the event of defective work.

The definition of “structural defect” in section 18E of the HBA has been reworked and replaced with a new concept of “major defect”.

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