Amendments to the Home Building Act 1989 receives Royal Assent

Date: Jan 03, 2009
Document Type: Newsletter

The Home Building Amendment Bill 2008 ("the Bill") received Royal Assent on the 28th November, 2008. The Bill has amended the Home Building Act 1989 ("the Act") to make further provision for the suspension of building licenses, the taking of disciplinary action and the requirements for home warranty insurance.

Under the amendments a home building contractors licence or building consultancy licence can be automatically suspended if the licence holder fails to comply with any of the following:

  • An order of the Consumer Trader and Tenancy Tribunal to pay an amount of money in respect of a building claim; or
  • An order of a court to pay an amount of money in respect of a building claim.

The suspension will take effect twenty-eight days after the date of which the money is due to be paid unless the decision of the Tribunal or court is stayed pending an appeal.

Prior to this amendment if a contractor failed to comply with a money order from the Tribunal or a court the homeowner was obliged to take legal action to enforce the order or have the contractor made insolvent. The amendment seeks to provide an incentive to contractors to comply with an order of the Tribunal or court as well as providing consumers with quicker access to the remedies they are entitled to in respect of a building claim.

The Bill further amends the Home Building Act 1989 to require contracts of insurance for residential work to include a provision that enables a person on whose behalf the work is being done to make an insurance claim if the contractor's licence is suspended because of the contractor's failure to pay the person an amount of money ordered by the Tribunal or a court.

The insurer will only be required to accept liability for such a claim of the contractor has been ordered by the Tribunal or a court to pay the beneficiary an amount of money in respect of a building claim and the contractor has failed to comply with that order. In the event that the contractor subsequently complies with the money order or completes the residential building work the insurer will be entitled to recover from the beneficiary the amount the insurer has paid under the insurance claim.

Disciplinary provisions have also been strengthened with contractors now subject to disciplinary action if they fail to comply with an order of the Tribunal or a Court in respect of a building claim.

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