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Commencements of The Home Building Amendment Act 2014

Posted on 12 December 2014

The majority of the provisions in the Amendment Act and the 2014 Regulation will commence on 15 January 2015,  following are the major changes:

The threshold for when a licence is required for building and general trade work is being raised from over $1,000 worth of work to over $5,000 (including labour and materials). Specialist work such as plumbing, electrical and air conditioning will still require a licence regardless of the cost of work.
Increased penalty provisions to allow custodial sentences of imprisonment for up to 12 months as a sentencing option for repeat offenders of unlicensed contracting and not providing required insurance.
Owner-builders will be required to name all other owners of the land to ensure all owners of land are unable to obtain another permit for a different property for five years. It will also not be possible to obtain a permit for a dual occupancy unless special circumstances exist. 
It will no longer be mandatory for owner-builders to obtain statutorily required insurance if they wish to sell a property within the warranty period. Vendors will be required to include a conspicuous note on the contract for sale that there is no insurance on the property.  However, contractors working for an owner-builder will still need to provide home warranty insurance to owner-builders for all work over $20,000.
Stand-alone contracts for internal paintwork no longer require a licence, unless done as part of other home building work. 
Tightening licence eligibility to stamp out the practice of 'phoenixing' where a company intentionally enters insolvency to avoid unpaid debts, then re-emerges as a new company under a different name.
Changing the name of Home Warranty Insurance to the Home Building Compensation Fund. ? Changing the definition of 'completion' for strata buildings to provide that completion occurs on the issue of an occupation certificate that allows the occupation and use of the whole building. 
Licensees will be able to use reasonable reliance on the written advice of an independent professional engaged by the owner as a defence for a breach of the statutory warranties. 
A $47 fee will apply for the renewal or restoration of supervisor and tradesperson certificates.

Provisions relating to contracts will commence on 1 March 2015, following are the major changes:
Increasing the threshold for when the more detailed contract requirements are needed from $5,000 to $20,000. Work under $20,000 will still require a written 'minor works' contract. 
A cap on deposits for work over $20,000 will be increased from five to ten percent. This will mean contractors will only be able to request a maximum of ten percent for a deposit for all projects, regardless of the value. 
Contracts over $20,000 will need to include a progress payment schedule (which only allows authorised payments to be made) and a termination clause. 

Click here to read a letter from the NSW Commissioner for Fair Trading in relation to the commencement of the Home Building Regulation 2014 (the 2014 Regulation) and the Proclamation for the commencement of the Home Building Amendment Act 2014 (the Amendment Act).

Click here to read the Amendment Act to be published on the NSW Government website on Friday 12 December 2014.

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