New home building laws start today in NSW
New South Wales Fair Trading Minister Matthew Mason-Cox claims changes to home building laws will increase protections for consumers.
The new laws, which will be enforced from today, include changes to licensing for builders – both professionals and owner-builders – and changes to the eligibility of building defects for compensation.
Mason-Cox said the changes were intended to modernise industry practices.
"From today, builders and traders face up to 12 months in prison if they are repeat offenders of unlicensed contracting work or don't have the required insurance," he said.
Licensing changes also take aim at illegal phoenix schemes, where an indebted business shuts down and resumes operations under a new name.
"At its core, these new home building laws are about ensuring NSW consumers are appropriately protected without creating unnecessary red tape and regulation that will stifle industry growth and investment," said Mason-Cox.
However, some claim the changes will degrade consumer rights and property research and investment firm Aviate has warned that the new laws mean investors must now be more vigilant when purchasing properties.
One of the major aspects of the Home Building Amendment Act includes a change to the warranty period a builder must provide for new works.
A six-year warranty now only applies for "major" defects, which means there is a threat of collapse or the building is uninhabitable, while there is now no legal distinction between structural and non-structural defects.
All non-major defects will only be covered under the standard two-year warranty, even if they are structural defects.
Aviate Group's Neil Smoli says buyers must now take greater care.
"Investing in property is typically seen as low risk but it's only low risk if you take all the necessary precautions and undertake the proper due diligence prior to investing," said Smoli.
"Limiting the ability of purchasers to take action against builders for defects means the need to work only with builders and developers with a proven track record is vital. The company responsible for delivering a project must take pride in their work and be able to demonstrate that their other projects have been an enduring success."
He urges consumers to research builders before engaging their services.
