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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Home Building Amendment (Insurance)
Bill 2002
Contents
Page
1 Name of Act 2
2 Commencement 2
3 Amendment of Home Building Act 1989 No 147 2
4 Amendment of Home Building Regulation 1997 2
5 Amendment of Home Building Legislation Amendment
Act 2001 No 51 2
Schedules
1 Amendments to Home Building Act 1989 relating to
insurance 3
2 Amendments to Home Building Regulation 1997 relating to
insurance 8
3 Other miscellaneous amendments 12
I certify that this PUBLIC BILL, which originated in the LEGISLATIVE ASSEMBLY, has
finally passed the LEGISLATIVE COUNCIL and the LEGISLATIVE ASSEMBLY of NEW
SOUTH WALES.
Clerk of the Legislative Assembly.
Legislative Assembly,
Sydney, , 2002
New South Wales
Home Building Amendment (Insurance)
Bill 2002
Act No , 2002
An Act to amend the Home Building Act 1989 and the Home Building
Regulation 1997 to make further provision with respect to insurance for residential
building work, owner-builder work and the supply of kit homes; and for other
purposes.
I have examined this Bill, and find it to correspond in all respects with the Bill as
finally passed by both Houses.
Chairman of Committees of the Legislative Assembly.
Clause 1 Home Building Amendment (Insurance) Bill 2002
The Legislature of New South Wales enacts:
1 Name of Act
This Act is the Home Building Amendment (Insurance) Act 2002.
2 Commencement
This Act commences on a day or days to be appointed by
proclamation.
3 Amendment of Home Building Act 1989 No 147
The Home Building Act 1989 is amended as set out in Schedules 1
and 3.1.
4 Amendment of Home Building Regulation 1997
The Home Building Regulation 1997 is amended as set out in
Schedules 2 and 3.2.
5 Amendment of Home Building Legislation Amendment Act 2001 No 51
The Home Building Legislation Amendment Act 2001 is amended by
omitting from Schedule 6 [20] proposed section 103A (3) and (4) of
the Home Building Act 1989.
Page 2
Home Building Amendment (Insurance) Bill 2002
Amendments to Home Building Act 1989 relating to insurance Schedule 1
Schedule 1 Amendments to Home Building Act 1989
relating to insurance
(Section 3)
[1] Section 90 Definitions
Insert at the end of section 90:
(2) A reference in this Part to the disappearance of a contractor,
supplier or owner-builder includes a reference to the fact that,
after due search and inquiry, the contractor, supplier or
owner-builder cannot be found.
[2] Sections 95 (2A) and (3), 96 (3) (d) and 96A (4)
Omit "7 years" wherever occurring. Insert instead "6 years".
[3] Section 99 Requirements for insurance for residential building work
Omit "insolvency or death of the contractor or because of the fact that,
after due search and inquiry, the contractor cannot be found" from
section 99 (1) (a).
Insert instead "insolvency, death or disappearance of the contractor".
[4] Section 99 (1) (b)
Omit the paragraph. Insert instead:
(b) a person on whose behalf the work is being done and
the person's successors in title against the risk of being
unable, because of the insolvency, death or
disappearance of the contractor:
(i) to recover compensation from the contractor for
a breach of a statutory warranty in respect of the
work, or
(ii) to have the contractor rectify any such breach.
Page 3
Home Building Amendment (Insurance) Bill 2002
Schedule 1 Amendments to Home Building Act 1989 relating to insurance
[5] Section 100 Requirements for insurance for kit homes
Omit "insolvency or death of the supplier or because of the fact that, after
due search and inquiry, the supplier cannot be found" from section 100 (a).
Insert instead "insolvency, death or disappearance of the supplier".
[6] Section 100 (b)
Omit the paragraph. Insert instead:
(b) a person to whom the kit home is supplied and the
person's successors in title against the risk of being
unable, because of the insolvency, death or
disappearance of the supplier, to recover compensation
from the supplier for any of the following events or to
have the supplier rectify any of the following events:
(i) the materials and components used in the kit
home not being good or suitable for the purpose
for which they were used,
(ii) the design of the kit home being faulty.
[7] Section 101
Omit the section. Insert instead:
101 Requirements for insurance by owner-builders and others
A contract of insurance in relation to owner-builder work or
residential building work required by section 95 or 96 must
insure a purchaser of the land on which the work is done and
the purchaser's successors in title against the risk of being
unable, because of the insolvency, death or disappearance of
the owner-builder or contractor concerned:
(a) to recover compensation from the owner-builder or
contractor for a breach of a statutory warranty in respect
of the work, or
(b) to have the owner-builder or contractor rectify any such
breach.
Page 4
Home Building Amendment (Insurance) Bill 2002
Amendments to Home Building Act 1989 relating to insurance Schedule 1
[8] Section 102A
Insert after section 102:
102A Approval of alternative home building indemnity schemes or
arrangements
(1) This Part does not apply to or in respect of any residential
building work or owner-builder work or the supply of a kit
home if the work or supply is, for the time being, covered by a
home building indemnity scheme, or other similar
arrangement, approved by the Minister by notice published in
the Gazette.
(2) The notice is to set out the terms of any such scheme or
arrangement.
(3) The approval by the Minister of a scheme or arrangement
under this section is subject to:
(a) any conditions that may be prescribed by the
regulations, and
(b) any conditions (not inconsistent with the regulations)
that may be imposed by the Minister.
(4) An approval under this section may be varied or revoked by the
Minister at any time by further notice published in the Gazette.
(5) The regulations may make provision for or with respect to any
scheme or arrangement approved by the Minister under this
section.
(6) Without limiting subsection (5), the regulations may make
provision for or with respect to:
(a) the functions of the Guarantee Corporation (within the
meaning of Part 6A) in relation to the administration of
any such scheme or arrangement, and
(b) the payment of contributions into the Building Insurers'
Guarantee Fund in connection with any such scheme or
arrangement administered by the Guarantee
Corporation.
Page 5
Home Building Amendment (Insurance) Bill 2002
Schedule 1 Amendments to Home Building Act 1989 relating to insurance
[9] Section 103B Period of cover
Omit section 103B (2). Insert instead:
(2) A contract of insurance must provide insurance cover for other
loss insured in accordance with this Act for a period of not less
than:
(a) in the case of loss arising from a structural defect within
the meaning of the regulations--6 years after the
completion of the work or the supply of the kit home, or
the end of the contract relating to the work or supply,
whichever is the later, or
(b) in the case of loss arising otherwise than from any such
structural defect--2 years after the completion of the
work or the supply of the kit home, or the end of the
contract relating to the work or supply, whichever is the
later.
[10] Section 103B (2B)
Insert after section 103B (2A):
(2B) Subsection (2) is subject to any variation specified in the
regulations as to the period for which insurance cover must be
provided.
[11] Section 103P Building Insurers' Guarantee Fund
Insert after section 103P (2) (d):
(e) any contributions or other amounts required by the
regulations to be paid into the Fund in connection with
any scheme or arrangement approved by the Minister
under section 102A that is being administered by the
Guarantee Corporation.
[12] Section 103P (3) (b)
Insert "or in connection with any scheme or arrangement approved by the
Minister under section 102A that is being administered by the Guarantee
Corporation" after "Part".
Page 6
Home Building Amendment (Insurance) Bill 2002
Amendments to Home Building Act 1989 relating to insurance Schedule 1
[13] Section 103P (3) (e)
Insert after section 103P (3) (d):
(e) money required by the regulations to be paid from the
Fund in connection with any scheme or arrangement
approved by the Minister under section 102A that is
being administered by the Guarantee Corporation.
[14] Section 103S Functions of Guarantee Corporation
Insert after section 103S (1):
(1A) Without limiting subsection (1) (c), the regulations may make
provision for or with respect to the functions of the Guarantee
Corporation in relation to any home building insurance or
reinsurance arrangements that are entered into by the State.
[15] Schedule 4 Savings and transitional provisions
Insert at the end of clause 2 (1):
Home Building Amendment (Insurance) Act 2002
[16] Schedule 4, Part 10
Insert after clause 67:
Part 10 Provisions consequent on enactment of
Home Building Amendment (Insurance) Act
2002
68 Application of amendments
Subject to the regulations, an amendment to a provision of this
Act that is made by the Home Building Amendment
(Insurance) Act 2002 does not apply to an insurance contract
that is in force at the time the amendment commences.
Page 7
Home Building Amendment (Insurance) Bill 2002
Schedule 2 Amendments to Home Building Regulation 1997 relating to insurance
Schedule 2 Amendments to Home Building
Regulation 1997 relating to insurance
(Section 4)
[1] Clause 39 Definitions
Insert after clause 39 (2):
(3) A reference in this Part to the disappearance of a contractor,
supplier or owner-builder includes a reference to the fact that,
after due search and inquiry, the contractor, supplier or
owner-builder cannot be found.
[2] Clause 43 Losses indemnified
Omit "insolvency or death of the contractor or because, after due search and
inquiry, the contractor cannot be found" from clause 43 (1) (a).
Insert instead "insolvency, death or disappearance of the contractor".
[3] Clause 43 (1) (b)
Omit the paragraph. Insert instead:
(b) loss or damage arising from a breach of a statutory
warranty, being loss or damage in respect of which the
beneficiaries cannot recover compensation from the
contractor or have the contractor rectify because of the
insolvency, death or disappearance of the contractor.
[4] Clause 43 (2) (a)
Omit "insolvency or death of the supplier or because, after due search and
inquiry, the supplier cannot be found".
Insert instead "insolvency, death or disappearance of the supplier".
[5] Clause 43 (2) (b)
Omit the paragraph. Insert instead:
(b) loss or damage resulting from any of the following
events, but only if the beneficiaries cannot, because of
the insolvency, death or disappearance of the supplier,
Page 8
Home Building Amendment (Insurance) Bill 2002
Amendments to Home Building Regulation 1997 relating to insurance Schedule 2
recover compensation from the supplier for the loss or
damage or have the supplier rectify the loss or damage:
(i) the materials and components used in the kit
home not being good or suitable for the purpose
for which they were used,
(ii) the design of the kit home being faulty.
[6] Clause 43 (3)
Insert ", being loss or damage in respect of which a beneficiary cannot
recover compensation from the contractor or supplier concerned, or have the
contractor or supplier rectify, because of the insolvency, death or
disappearance of the contractor or supplier" after "for the following loss or
damage".
[7] Clause 43 (3) (e)
Insert at the end of clause 43 (3) (d):
, or
(e) any legal or other reasonable costs incurred by a
beneficiary in seeking to recover compensation from the
contractor or supplier for the loss or damage or in
taking action to rectify the loss or damage.
[8] Clause 45 Limitations on liability and cover
Insert after clause 45 (i):
(j) the contract may limit liability resulting from non-
completion of building work to an amount that is 20%
of the contract price (including any agreed variation to
the contract price) for the work.
[9] Clause 57AA General requirements for insurance
Omit "$5,000" wherever occurring. Insert instead "$12,000".
Page 9
Home Building Amendment (Insurance) Bill 2002
Schedule 2 Amendments to Home Building Regulation 1997 relating to insurance
[10] Clause 57AC
Insert after clause 57AB:
57AC Meaning of "structural defect"
(1) For the purposes of section 103B (2) of the Act, structural
defect means any defect in a structural element of a building
that is attributable to defective design, defective or faulty
workmanship or defective materials (or any combination of
these) and that:
(a) results in, or is likely to result in, the building or any
part of the building being required by or under any law
to be closed or prohibited from being used, or
(b) prevents, or is likely to prevent, the continued practical
use of the building or any part of the building, or
(c) results in, or is likely to result in:
(i) the destruction of the building or any part of the
building, or
(ii) physical damage to the building or any part of
the building, or
(d) results in, or is likely to result in, a threat of imminent
collapse that may reasonably be considered to cause
destruction of the building or physical damage to the
building or any part of the building.
(2) In subclause (1):
structural element of a building means:
(a) any internal or external load-bearing component of the
building that is essential to the stability of the building
or any part of it, including things such as foundations,
floors, walls, roofs, columns and beams, and
(b) any component (including weatherproofing) that forms
part of the external walls or roof of the building.
Page 10
Home Building Amendment (Insurance) Bill 2002
Amendments to Home Building Regulation 1997 relating to insurance Schedule 2
[11] Clause 57BA
Insert after clause 57B:
57BA Transitional provision--application of certain amendments
The amendments made to clauses 43, 45 and 57AA by the
Home Building Amendment (Insurance) Act 2002 do not apply
to an insurance contract that is in force at the time of
commencement of the amendments.
Page 11
Home Building Amendment (Insurance) Bill 2002
Schedule 3 Other miscellaneous amendments
Schedule 3 Other miscellaneous amendments
(Sections 3 and 4)
3.1 Home Building Act 1989 No 147
[1] Section 48A Definitions
Omit "action for reversal of" from section 48A (2) (a).
Insert instead "appeal against".
[2] Section 48I Application for determination of a building claim
Omit ", in accordance with the regulations, and on payment of the
prescribed fee,".
[3] Section 103M Assignment of rights
Insert after section 103M (3):
(4) A reference in this section to the assignment of a beneficiary's
rights includes a reference to the assignment of any rights that
the beneficiary may have, in respect of the matter covered by
the indemnity, against a developer or any other person.
3.2 Home Building Regulation 1997
[1] Clause 57G Application for determination of building claim
Omit the clause.
[2] Clause 57H Fee for application for determination of building claim
Omit the clause.
Page 12
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