From 15 January 2015, DIY renovators and building professionals in New South Wales will be obliged to abide by new regulations.
The changes come under the Home Building Amendment Act 2014 and Home Building Regulation 2014. Most changes commence on 15 January 2015, with further amendments concerning contract requirements taking effect on 1 March 2015.
Fair Trading NSW said the new laws will “help to modernise industry practices, reduce red tape and support consumer confidence and building activity across NSW”.
The changes affecting licensing, owner-builders, the Home Building Compensation Fund and disputes, defects and statutory warranties come into effect on 15 January. Changes relating to contracts commence in March.
One of the main changes that could impact investors undertaking renovation projects in New South Wales is the raising of the threshold for requiring a licence for building and general work – from work over $1,000 to work over $5,000 (including labour and materials). Specialist work (such as plumbing, electrical and air conditioning) will still need a licence regardless of the cost of the work.
Owner-builders will also be affected since they will now be required to name all other owners of the land on an application for an owner-builder permit. According to Fair Trading NSW, “this will be recorded on the permit to prevent people using this system to carry out commercial unlicensed building work”. In addition “any owners named cannot apply for another owner-builder permit for a different property for five years”.
Owner-builders will also be prohibited from getting a permit for a dual occupancy “except in special circumstances”.
The threshold for requiring an owner-builder permit has also increased and will now apply to work valued over $10,000. All owner-builders must provide evidence of having done basic work health and safety training. For work over $20,000, Fair Trading will require the completion of an owner-builder course.
Consumers will also shortly be able to check their builder’s or tradesperson’s insurance and previous claims on a property through a new public register. Fair Trading will provide an update on how to access the register “by mid-January 2015”.
From 1 March, the threshold for more detailed contract requirements will rise from $5,000 to $20,000. Home building work under $20,000 will still need a written ‘minor works’ contract.
In addition, a cap on deposits for work over $20,000 will be increased from five per cent to 10 per cent. Builders will only be able to request a maximum of 10 per cent for a deposit on all projects – regardless of the value.
Contracts over $20,000 will need a progress payment schedule and a termination clause.
A full summary of the changes can be found at Fair Trading NSW.