Understanding the Changes in the 2023 NSW Building Legislation Amendment

Introduction

On 21 November 2023, the NSW government passed the Building Legislation Amendment Bill 2023. The bill has targeted reform in respect to a variety of different aspects of the building legislation, in particular the Home Building Act 1989. The key objectives of the bill were; 

  • to enable building defects in homes to be investigated before a complaint is made, including new powers to enter sites, order rectification, stop work and act against license holders, 
  • to introduce duties on persons in the building products supply chain to ensure building products are safe and appropriate for their intended use, 
  • to amend legislation relating to strata schemes to enable the percentage of a contract price required to be provided by A Strata Developer As security to be prescribed by the regulations and to make provision relating to decennial insurance,
  • to provide for immediate suspensions of registrations of building certifiers and practitioners in certain circumstances after a show cause notice has been issued,
  • to facilitate information sharing with government sector agencies under the building and development certifiers act 2018 and the Home Building Act 1989.

Who is impacted?

All people involved in the building industry in NSW are affected by the new reforms, particularly developers, contractors and sub-contractors who are now subject to broader responsibilities, obligations, and penalties regarding building product safety pursuant to the new chain of responsibility provision in the Building Products (Safety) Act 2017 (NSW). 

What Acts have been amended?

  • Building and Development Certifiers Act 2018 (NSW)
  • Building Products (Safety) Act 2017 (NSW)
  • Design and Building Practitioners Act 2020 (NSW)
  • Home Building Act 1989 (NSW)
  • Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW)
  • Strata Schemes Management Act 2015 (NSW)
  • Strata Scheme Management Regulation 2016 (NSW)

Key Outcomes 

Changes to the Home Building Act 1989 have targeted the investigation of defects in residential building work by way of rectification and ‘stop work’ orders. 

Investigating Residential Building Works 

The new section 49A provides that a secretary may authorise an inspector to investigate residential building work. This reform also provides that when making an investigation in relation to a common property in a strata scheme the inspector may enter and inspect the common or association property. Further, it states that reasonable assistance must be given by the owners corporation to enable an inspection of any common property to be carried out. 

Rectification Orders

The new section 49B relating to rectification orders outlines that if a person is satisfied that building done by a contractor or on a contractors behalf is defective or is being carried out in a way that could result in a defect may make a written order requiring the contractor to take specified steps in order to ensure a defect is rectified. The new section 49E provides that failure to comply with such an order is an offence carrying a maximum penalty of $330,000 for corporations and $110,000 for other entities. 

‘Stop Work’ Orders 

The new section 129 relating to ‘stop work’ orders, provides if a person believes building work on their property is or is likely to be carried out in a way that would result in; 

  • significant loss to the occupiers/potential occupiers of the building, or 
  • in significant damage to the property, or 
  • there is a change in the principal for the residential building work, or 
  • preventing the valid issue of an occupation certificate or building compliance declaration,

may, in writing, order a developer to ensure the building work stops on the relevant property. This section provides that failure to comply with such an order is an offence carrying a maximum penalty of $330,000 for corporations and $110,000 for other entities.

Appeals to the Tribunal

If you or your business are affected by a rectification or ‘stop work’ order you may appeal to the tribunal against the relevant order within 30 days after notice of the given is given.

Conclusion 

If you work in the construction industry and are confused about how these legislative changes impact you or your projects, reach out to the team at Maguire & Maguire today. Our experienced team can walk you through your rights and responsibilities, and help ensure your projects are compliant.