The NSW Government has taken even further steps to implement the next phase of significant legislative change in the building and construction industry by the introduction of a new Building Bill 2022 (Bill). The Bill was part of the previous NSW Government’s Construct NSW transformation strategy which focuses on building “trustworthy buildings” which are “fit for purpose, sustainable and measurably less risky” and to restore consumer confidence in the construction industry.
The Bill is intended to replace the Home Building Act 1989 (NSW) and aims to create new obligations and broaden liability for builders, developers and other people involved in the building process with the intention of creating an “end-to-end accountability” for all building work in NSW – this means both residential and commercial building work. By doing this, it seeks to consolidate and regulate several key elements of the building and construction industry, including:
- what building work is intended to be regulated and who should be licensed to perform it;
- the approval process for building work;
- fire safety requirements for building work; and
- key consumer protections that have been preserved for residential building work.
A key feature of the Bill is that it proposes to provide a single statutory duty of care framework for building work in NSW that is owed to both current and future owners. It is hoped this change will provide a more straightforward assessment of the duty by having a single test, as well as providing clear links to the standards of work required by licence holders and those doing building work.
The Bill also proposes to:
- expand the definition of ‘developer’ to those who carry out, facilitate or cause building work to be carried out, the effect of which is that entities that never owned the property but facilitated the works in some way, will owe the same warranties as a developer; and
- replace the term ‘major defect’ with ‘serious defect’ (as defined in the RAB Act) for proceedings concerning a breach of the statutory warranties for residential developments.
The effect of the Bill, if passed, means that more entities and individuals will be liable to consumers in the industry for building work performed. It will also have the potential to increase the frequency of and broaden the type of claims available to owners, for example, for defective works or for breach of the statutory duty of care.
The Bill was closed for public consultation in November 2022 and is currently under review by the NSW Government.
If you would like a further explanation of the Bill, please contact a member of the Construction team.