Beware Traps In New Home Building Laws
Anybody buying a newly completed home or builders doing the construction should be aware of changes to laws governing building that came into force in January. The laws were brought in by the NSW government to try and fix problems regarding shonky builders, but there are complaints that in fixing one problem the new laws create others.
The Home Building Amendment Act introduces a 12 month prison term for builders who repeatedly perform unlicensed construction work. They also crack down on so-called phoenix companies that repeatedly go broke and resurface under a new trading name. Construction work worth less than $5,000 can now be done without a licence, but specialist work like plumbing and electrical jobs will still need a licence no matter the cost.
Critics warn that this could open a loophole for unqualified workers to tear down asbestos or lead ridden buildings or erect potentially dangerous constructions like balconies or on hillsides.
But one of the changes that has raised most concern is that under the new laws homeowners have the time reduced from six to two years during which they can pursue claims for shoddy work and building faults. The exception is if the fault is deemed a “major defect”, but builders and owners could be left arguing over the definition of what makes a defect “major”. The new law states “major defects” would include flaws that make a building uninhabitable, likely to collapse, or part of the building is unable to be used for its purpose. But the warranty for major defects including waterproofing and safety systems lasts only six years. Again definitions could be argued.
Critics point out that what might be a hairline crack in year two could grow into something far more serious by year six. Owners Corporation Network executive officer Karen Skinner warns the legislation leaves apartment owners on their own in the face of any problems that emerge in a newly constructed building.
Homeowners who have concerns about their buildings, especially those living in apartments, would be wise to seek legal advice to see where they stand under the new laws. It can take many years to rally owner corporations to take action which would put them outside the new two year limit. It would be best to act quickly before the time limit expires or the building problem worsens.
Builders would also be wise to get legal advice on how changes to the law might impact on them. Jail and hefty penalties are involved.
University of NSW research found two thirds of new apartment blocks had construction defects.