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Residential Focus

23 September 2020

#Property & Real Estate

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Residential Focus

What is residential building work?

We are often asked to advise on whether an activity is residential building work for the purpose of the definition in the Home Building Act 1989 (NSW) (Act).

To answer the question involves working through various steps in the definition of both ‘residential building work’ and ‘dwelling’ in the Act. Relevantly, the definition of a dwelling consists of a core definition and a set of inclusions and exclusions.

The inclusions operate to extend the otherwise limited concept of a dwelling to include other structures or improvements if they are constructed for use in conjunction with a dwelling. A recent decision, concerning a failed retaining wall, provides assistance as to the interpretation of this proviso: 

“For the construction of the wall to be ‘involved’, within the plain and ordinary meaning of that term, in the construction of a dwelling, it is sufficient that it is implicated in the construction of a dwelling. Put another way, the question is whether the construction of the side retaining wall would have been done without (or ‘but for’) the construction of a dwelling (or the other possibilities set out in the clause). It does not matter, for this purpose, that the (legal) construction of the dwelling was to follow, in sequence, the (illegal) construction of the wall. There is no temporal requirement in the clause and there is no suggestion that the work has to be lawful.”  

It may seem trifling, but answering yes to the residential building work question will mean that the contractor requires an appropriate licence and insurance as well as meeting contract documentation requirements, depending on the value of the work. It is also the trigger for the application of statutory warranties under the Act. Should the contractor not meet these requirements, it carries both a regulatory risk, sounding at minimum in fines and a risk of non-payment, as owners can rely on the Act to avoid contractual payment obligations. Developers are also exposed to fines, but more significantly, developers run the risk of contracts for sale being voidable at the option of the purchaser before completion.

Author: Christine Jones

In the media

Australian construction companies more dependent on data than ever, study finds
The Australian construction industry is increasingly turning to digital technologies, and as a result data is becoming more important than ever, to the point companies would change software providers in order to gain better control of it (18 September 2020).  More...

Survey finds property investors remain upbeat despite pandemic
A new national survey has found that a number of property investors have remained upbeat during COVID-19, however, the pandemic has made many reconsider not only where they buy, but also where they live (17 September 2020).  More...

HomeBuilder lifts new home construction market everywhere except Victoria
Releasing its New Home Sales report based on a survey of the nation’s largest home builders, Housing Industry Association said the volumes of new homes sold across Australia’s five largest states increased by 3.6 percent in August on a seasonally adjusted basis to reach almost 6,000 (17 September 2020).  More...

The time has come for regulations that drive net zero homes
It’s time that the National Construction Code and, in NSW, BASIX, be updated to drive the trajectory to net zero energy homes. An opportunity has arisen to make major improvements in the energy efficiency and renewable energy generation of new buildings, following recent consultations and current analysis for the next update of the National Construction Code (NCC) in 2022 (16 September 2020).  More...

HomeBuilder keeps December quarter afloat
New Home Sales data released confirms that HomeBuilder will support building activity and protect jobs in the December 2020 quarter,” commented HIA Chief Economist, Tim Reardon (16 September 2020).  More...

Fire Safety Regulation and Control – moving forward
Is the combustible cladding crisis behind us, or at least under control? Or are there other major fire risks and latent fire hazards waiting to hit the building and construction sector in Australia in the near future (15 September 2020).  More...

Report looks at COVID-19 impacts on apartment market in Q2
Mark Dawson, Director at Urbis, said we expect design and management of apartments will continue to evolve with customer preferences. This could mean more flexible spaces within apartments, but also within buildings to promote healthy and practical lifestyles ready to deal with a changing environment (11 September 2020).  More...

Demand for Residential Land Surges70 per cent
“Housing finance figures released show that lending for the construction of a new home rosein Julyfor the first time since February, to the highest level in two years,” stated HIA’s Chief Economist, Tim Reardon (09 September 2020).  More...

NSW subbies owed millions as developers refuse to pay
NSW construction workers and subcontractors are being ripped off at record rates as greedy builders and developers use the pandemic as an excuse to withhold payments for work already done, warns the CFMEU NSW (18 September 2020).  More...

Flammable cladding delays get apartment owners hot under the collar
The peak body for apartment owners has accused authorities of blame shifting, more than three years after London's Grenfell Tower fire exposed the dangers of flammable cladding. NSW Better Regulation minister Kevin Anderson notes that "Local councils can request that the panel consider specific matters when a council is assessing particular remediation plans put forward by building owners.” (18 September 2020).  More...

Jobs boom for Western Sydney Aerotropolis
A landmark rezoning will see 6,500 hectares of land rezoned to provide for employment, residential and environmental uses in the Western Sydney Aerotropolis, setting the State up for a strong economic recovery and paving the way for land to be developed before the first plane takes off in 2026 (13 September 2020).  More...

Practice and courts

ABCB Consultations

For Public Comment Technical Specification for the WaterMark Certification Scheme WMTS-522:2020,incorporates amendments to allow an addition of similar products of alternate design to obtain certification. Closes 28 October 2020

Definition for building complexity
The defined term for 'Building complexity' has been developed in response to a decision of the Building Ministers’ Forum (BMF) that a definition be prepared regarding the design, construction and certification of complex buildings. Closes 01 November 2020.

New Australian Standards

AS 4773.2:2015 Amd 1:2020
Masonry in small buildings – Construction
Standards Australia.  More...

Standards Australia: Drafts Open for Public Comment
Standards Australia are seeking your feedback on a range of standards concerning the plumbing and drainage trade. On this page you will find a complete list of drafts currently open for public comment from September to October 2020. For more information, please consult the Standards Australia Public Commenting Guide.  More...

GBCA: draft Green Star Homes Standard for consultation
Part of the Green Building Council of Australia’s Future Homes Strategy, the Standard is a key tool to help drive transformation in the residential sector to create a market for healthier, more resilient, energy efficient homes. Consultation on the draft standard will run until 30 October 2020. 

GBCA Reminder: Transitioning to Green Star – Design & As Built v1.3, Green Star – Interiors v1.3 and Green Star – Railway Stations v1.1
As the new section J provisions are now mandatory in most of the country, GBCA will be closing down registrations under Green Star – Design & As Built v1.2, Green Star – Interiors 1.2, and Green Star – Railway Stations v1 at the end of September 2020.  More...

2020 National Housing Research Program commences
Research is underway for the suite of projects funded by AHURI as part of the 2020 National Housing Research Program (NHRP). The research will be undertaken by collaborative teams from AHURI’s eight national university research partners.  More...

Developers must provide advance notice of building completion
Building developers must provide an expected date that they will apply for an occupation certificate. This notice must be provided at least 6 months in advance and no later than 12 months. If building developers do not provide notice, fines may apply and/or a prohibition order may be made that stops or delays an occupation certificate being issued. Reminder: A transitional period applies to developers with residential apartment buildings due for completion within the first six months of the Act starting 1 September 2020. In these cases, notice must be given within two weeks of the new legislation coming into effect.  More...

Key compliance priorities updated
The Resources Regulator has published its July – December 2020 Compliance priorities document which sets out the key compliance priorities for the next six months. Between July and December this year the Regulator aims to complete four compliance priorities targeting respirable dust (revision to the exposure standards), progressive rehabilitation, subsidence management, and non-reporting of incidents.  More...

NSW Revenue: HomeBuilder program
HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.  More...


Delor Vue Apartments CTS 39788 v Allianz Australia Insurance Ltd (No 3) [2020] FCA 1281
In failing, before the entry into the contract of insurance with the respondent, to disclose to SCI or the respondent the known defects concerning soffits and eaves, the applicant breached its duty of disclosure under s 21(1)(b) of the Insurance Contracts Act 1984 (Cth) (the Act). Subject to the declarations in 3, 4 and 5 below, as at 8 May 2017, the respondent was entitled to a remedy under s 28(3) of the Act, in particular the remedy of reducing its liability to nil for the claim made consequent on damage caused to the applicant’s property by Tropical Cyclone Debbie in March 2017. 

The Owners Strata Plan 97121 v RCBS Devco Pty Ltd [2020] NSWSC 1247
REAL PROPERTY – Conveyancing Act 1919 (NSW) s 37A – where real property was sold by the second defendant to the third defendant at an undervalue and proceeds distributed immediately – where transactions were completed soon after the second defendant became aware that the plaintiff was contemplating litigation against it for alleged building defects – whether alienations were made with intent to defraud creditors – HELD – the alienations were made with intent to defraud the plaintiff as a creditor.
Conveyancing Act 1919 (NSW); Corporations Act 2001 (Cth); Home Building Act 1989 (NSW).

Murphy v Zubkrycki & Anor [2020] NSWDC 538
CONTRACTS – building and engineering contracts – residential building work – claim by beneficiary of implied statutory warranties – collapse of side retaining wall – whether builder constructed the wall – whether wall constituted ‘residential building work’ – rectification damages – whether works carried out were necessary and reasonable. Civil Liability Act 2002 (NSW); Conveyancing Act 1919 (NSW), s 177; Home Building Act 1989 (NSW), ss 18B, 18C, 96.

Dixonbuild Pty Ltd v Adams [2020] NSWCATAP 190
PRACTICE AND PROCEDURE – s 63 of the Civil and Administrative Tribunal Act – power to correct error in decision – scope of power – principles to be applied – power to correct name in final order. CONTRACT LAW – residential building work – breach of statutory warranties – s 48MA of the Home Building Act 1989 – work order the preferred outcome – Tribunal declining to make a work order
DAMAGES – breach of contract – single quotation provided – whether award is reasonable and appropriate. Home Building Act, 1989 (NSW).

Hanna v Commissioner for Fair Trading [2020] NSWCATOD 107
he operation of the decision made on 3 September 2020 to cancel Contractor Licence 112482C and disqualify the applicant from holding any authority under the Home Building Act 1989 for 12 months is stayed, without conditions, until determination of the application for review or until further order of the Tribunal.
INTERLOCUTORY ORDER – disciplinary action – cancellation of contractor licence – application for stay – whether condition should be imposed. Administrative Decisions Review Act 1997; rimes Act 1900; Home Building Act 1989.

Florida Kitchens Pty Ltd v Number One Cutting Service Pty Ltd trading as Number One Marble and Granite (No 2) [2020] NSWCA 216
COSTS – application to vary costs order – distinct applications for leave to appeal against security for costs and third party costs order – application granted.

Moustapha v Nelson (No 3) [2020] NSWSC 1263
CIVIL PROCEDURE – subpoenas – to produce documents or things – application for freezing order – bank records concerning proceeds of sale of defendant’s real estate – fishing expedition
CIVIL PROCEDURE – interim preservation – freezing orders – defendant sells real estate during prolonged litigation – defendant a natural person resident in Australia – insufficient risk of dissipation – costs – whether separate from general costs of proceedings – second unsuccessful application – order for payment of fixed sum on account. Civil Procedure Act 2005 (NSW), s 98(4); Evidence Act 1995 (NSW), s 75; Home Building Act 1989 (NSW), ss 10, 92.

Abbas & Anor v M H Affordable Homes Pty Ltd [2020] NSWDC 516
PRACTICE AND PROCEDURE – plaintiffs’ claim for rescission of contract for purchase of property ‘off the plan’ – claim depends upon proof that special condition enlivened – condition is whether a party to the contract was mentally ill under Mental Health Act 2007 (NSW) – allegation that first plaintiff was mentally ill in requisite sense – first plaintiff outside jurisdiction at date the proceeding commenced – second plaintiff unable to prosecute claim in absence of first plaintiff – unlikely prospect first plaintiff will return to jurisdiction within next 2 years – second plaintiff in default of direction to serve evidence – whether proceeding should be dismissed for want of despatch – degree of injustice if order for dismissal made – consideration of prospects of success of action.



Environmental Planning Instruments

State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (COVID-19 Special Provisions) 2020
(2020-565) — published LW 18 September 2020

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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