A number of significant amendments were enacted on 1 February 2012 which fundamentally alter the operation of the Home Building Act 1989 (NSW). (“HBA”).  One amendment reduces the regulatory burden on builders performing low value jobs.

Reduction of burden on low value jobs

Previously, works over the value of $1,000 required builders to provide a contract which complied with the requirements of s.7 of the HBA which included providing a consumer checklist and consumer information booklet to every customer, stating statutory warranties and providing information prescribed under the Home Building Regulations.

The amendments limit the application of s.7 of the HBA to contracts over $5,000 in value.

A new s.7AAA of the HBA reduces the compliance burden for contracts for works worth over $1,000 but less than $5,000.  The contract is now required to only include:

1. the name of the parties (including the name of the contractor license holder);
2. the contractor license number of the builder;
3. a description of the works to which the contract relates;
4. any plans or specifications for the work; and
5. the contract price, if it is known.

A breach of s.7AAA still carries the same penalty as a breach of s.7 of the HBA, being a fine of up to $8,800 (at the time of writing) for a corporation and $4,400 for an individual.

Importantly, s.10 of the HBA, which renders  contracts unenforceable by a builder if they do not comply with s.7 of the HBA, will not apply to low value contracts such that a low value contract which breaches s.7AAA will still be enforceable.