NSW Building Laws Undergo Major Overhaul: What You Need to Know

New South Wales is implementing significant changes to its building legislation, impacting everything from professional indemnity insurance for certifiers to the requirements for building bonds in strata schemes. These updates, stemming from recent regulatory amendments and proposed bills, aim to address market challenges and enhance building standards across the state.

• Professional indemnity insurance exclusions for non-compliant cladding have been extended for another year.
• The deadline for developers to provide building bonds for strata schemes has been pushed back to November 2, 2024.
• Proposed changes aim to restrict payment rights under the Security of Payment Act for unlawful building work.
• The scope of building bonds will be extended to cover parts of buildings serviced by a strata scheme, even if not within its parcel.

The Building, Development and Strata Legislation Amendment Regulation 2024 has extended the period during which professional indemnity policies for building certifiers can exclude coverage for non-compliant cladding. This deferral, now applying to policies commencing on or before June 30, 2025, provides the market with more time to adapt to insurance reforms.

Developers in NSW will have an additional four months to provide building bonds for residential strata schemes. The deadline has been extended from July 1, 2024, to November 2, 2024. This change is intended to support developers facing difficult market conditions and aligns with the government’s focus on increasing housing supply.

The Better Regulation Legislation Amendment (Miscellaneous) Bill 2024 proposes to restrict payment rights under the Building and Construction Industry Security of Payment Act 1999. This restriction would apply if construction contracts do not comply with licensing requirements or involve residential building work without the necessary Home Building Compensation Fund insurance. The bill also seeks to update competencies in the construction, plumbing, and services training package and remove invalid gas fitting qualifications.

Amendments to the Strata Schemes Management Act 2015 are proposed to broaden the scope of building work requiring a building bond. This will now include parts of a building that are not within the strata scheme’s parcel but are serviced, maintained, or repaired by it. This adjustment acknowledges the increasing complexity of mixed-use developments.

• Residential Focus: Recent and proposed changes to NSW building legislation, Holding Redlich.