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Residential Focus: A new era for building industry regulation in NSW – what's next for claims?

17 April 2024

14 min read

#Property, Planning & Development

Published by:

Vishwa Shah, Faith Zalm

Residential Focus: A new era for building industry regulation in NSW – what's next for claims?

In a new era for building industry regulation in NSW, the Building Commission NSW (Commission) has been established as the regulator of the building and construction industry.

The Commission will take over building and construction-related regulatory and compliance work from NSW Fair Trading and will act as a standalone specialist regulator. Its key functions will be:

  • inspections and compliance for build quality of residential buildings
  • overseeing licensing of tradespeople, design practitioners and certifiers
  • handling complaints regarding buildings and licensed tradespeople
  • reviewing policy to reform building laws in NSW.

The Commission is backed by a $24 million allocation in the NSW Budget and is headed by NSW Building Commissioner, David Chandler. The establishment of the Commission marks a sizeable increase in the resources and powers available to the Commissioner, with 400 additional inspectors being transferred from Fair Trading NSW to assist with compliance.

Other reforms and initiatives recently implemented by the NSW Government include:

  • sweeping reforms to the current construction-related legislation in the Building Legislation Amendment Act, passed in Parliament on 21 November 2023. One major change in the new swathe of reforms was a further expansion of the Commissioner’s powers, including granting the power to inspect building sites and deal with building defects even during the construction phase. Other companion legislation remains at the review of consultation phase. Read more here
  • increasing the Building Bond Scheme from two per cent to three per cent, giving owners of residential apartments greater security against defects. Read more here
  • the introduction of “Decennial Liability Insurance”, a new policy which provides owners with defects insurance coverage for a period of no less than 10 years from completion of the building. Read more here.

The aim of these reforms and the introduction of the Commission is to boost the public’s confidence in construction in NSW (particularly for off-the-plan residential purchases).

The Commission’s willingness to engage with owners, builders and developers on defects is a particular hallmark of the new era and positions harnessing the Commission’s compliance powers as an alternative to litigation (where litigation is not already on foot and where statutory warranty periods have not expired). 

Previously, these were processes which occurred in stages, for example, approaching the regulator with a complaint was a necessary precondition to commencing proceedings (and more often than not resulted in no action, by virtue of the existence of contractual disputes) or in the case of Project Intervene, concurrently (although perhaps not comfortably) with proceedings. 

It remains to be seen how comfortable owners will be in seeking the assistance of the Commission in the face of an expiring warranty period (with the potential to obtain an enforceable judgment expiring) or where defect claims are reactive, made as cross claims to money claims by builders or where claims include claims against other professionals which may be outside the Commission’s purview. 

Undoubtedly, the Commission’s remit will have an overwhelmingly positive effect on build quality and conduct in the industry.

Authors: Christine Jones & Brandon Thai

In the media

Couple hand building hemp house in Victoria in pursuit of tranquillity and cheaper power bills
Neil and Carol Preston are hand building their dream home from "hempcrete", an eco-friendly alternative to bricks and mortar. The Prestons were drawn to hemp after learning about its versatility as a construction material, with reports that it was hypoallergenic, fire resistant, sound insulating, and had a negative carbon footprint. Hempcrete's benefits have led to widespread adoption throughout the world, but in Australia proponents estimate it has only been used in about 300 residential dwellings (14 April 2024).  Read more here.

Sales of new homes weak for the start of 2024
The Housing Industry Association (HIA) New Home Sales report is a monthly survey of the largest volume home builders in the five largest states and is a leading indicator of future detached home construction. In response to the survey, HIA Senior Economist, Tom Devitt states that “the prospect of a pick-up in home building activity in 2024 is not likely given the low volume of new homes sales in the first three months of 2024” (16 April 2024).  Read more here.

New home commencements in 2023 were the lowest since 2012
The ABS this week released its building activity data for the December Quarter 2023. This data provides estimates of the value of building work and number of dwellings commenced, completed and under construction across Australia and its states and territories. HIA Chief Economist, Tim Reardon comments on how “there were only 163,836 new homes that commenced construction in 2023, the lowest volume of starts in over a decade, and far from the 240,000 required each year to meet the Australian government’s target of 1.2 million new homes over the next five years” (12 April 2024).  Read more here.

Apartment construction in NSW collapses under tax burden
HIA Chief Economist, Tim Reardon explores how “the number of units commencing construction in NSW has fallen by 50 per cent” because of “the introduction of additional taxes in 2017” (12 April 2024).  Read more here.

Cut to apprentice incentives is a cut to housing
HIA Managing Director, Jocelyn Martin discusses how “at a time when builders are facing so much adversity, it is imperative that the Australian Government maintain incentives for tradespeople employing and retaining apprentices” (8 April 2024).  Read more here.

Major planning changes coming into effect to deliver the homes NSW needs
The NSW Government’s Transport Oriented Development planning reforms are estimated to deliver over 170,000 more well-located, well-designed and well-built homes throughout the Sydney, the Illawarra, Hunter and Central Coast begin this month. In December last year the government announced the Transport Oriented Development State Environmental Planning Policy (TOD SEPP) which identified 31 stations across 13 local government areas around which new housing is to be located within 400m. Working with the Department of Planning Housing and Infrastructure (DPHI), 12 of the 13 local government areas have engaged with the DPHI to develop housing plans that deliver greater or equal housing numbers than would be required by the original TOD SEPP (12 April 2024).  Read more here.

First land release to create new jobs and homes in Bradfield City Centre
A landmark opportunity to partner with the NSW Government to deliver new homes and jobs at Bradfield City Centre has today been announced by Minister for Planning and Public Spaces, Paul Scully. This is a true mixed-use site that includes provision for 1,000 new homes, as well as commercial childcare, hotel, retail, medical spaces and public domain. Set across 4.8-hectares, there are over 200,000 square metres of gross floor area development potential. The Expression of Interest (EOI) builds on extensive engagement and feedback from industry about the exciting opportunity to partner with the NSW Government on the flagship precinct development in Sydney’s newest city (11 April 2024).  Read more here.

$62.5 million to accelerate infrastructure in growing areas
The NSW Government is set to turbocharge housing-related infrastructure in key growth areas across the state with a $62.5 million funding boost. The State Voluntary Planning Agreement (SVPA) program, established in 2010 under the then NSW Labor Government, uses developer contributions to deliver state and regional infrastructure in growing areas. The latest round of the program will support projects in 12 local government areas across the Lower Hunter, Illawarra, North West and South West Growth Areas, Wollondilly and the Central Coast (4 April 2024).  Read more here.

In practice and courts

Submission to the National Adaption Plan – Issues Paper
The HIA made a recent submission to the Senate Select Committee on Australia’s Disaster Resilience that focused on Australia’s preparedness, response and recovery workforce models, as well as alternative models to disaster recovery. HIA’s submissions on the Issues Paper has drawn from many aspects to that Inquiry as our comments and recommendations on this topic have many central and connected themes. In their submission we have put forward number of recommendations that should be considered in the further evolution of a National Adaption Plan as it relates to housing and residential buildings (11 April 2024). Read more here.

Housing Energy Efficiency Calculator
The Australian Building Codes Board (ABCB) has developed a calculator to assist practitioners in using the Deemed-to-Satisfy (DTS) elemental provisions for energy efficiency in Section 13 of the Housing Provisions. The overall goal of the Housing energy efficiency calculator is to help Australians build homes which are more comfortable and use less energy (2 April 2024). Read more and access the tool here.

Changes to the regulation of industrial chemicals
The NSW Government has made changes to the Protection of the Environment Operations Act 1997 (POEO Act) to strengthen the regulation of industrial chemicals and align NSW with new national standards for industrial chemical environmental risk management. The changes have been made under the Environmental Legislation Amendment (Hazardous Chemicals) Act 2024 and commenced on 25 March 2024 (15 April 2024). Read more here.


New report highlights role of construction industry in net zero push
The Australian Constructors Association (ACA) has released a crucial report emphasising the pivotal role of decarbonising the construction industry in realising Australia’s net zero ambition. Jon Davies, CEO of the ACA, highlighted that construction is a ‘hard to abate’ sector and while electrification is the preferred decarbonisation pathway, technology constraints mean this will not be available in the short to medium term. Read more here.

Deloitte and Autodesk to unveil new industry report
Next week, Deloitte and Autodesk are set to unveil the latest insights from the 2024 State of Digital Adoption in Construction Report (10 April 2024). Read more here.

Lifecycle of the NCC
The ABCB has published an infographic showing the lifecycle of the National Construction Code (NCC), which is updated every 3 years. Read more here.

Building Approvals, Australia – ABS Latest Release
This report provides the number of dwelling units and value of buildings approved. The February 2024 period estimated that total dwellings approved fell 1.9%, to 12,520 (4 April 2024). Read more here.

Building Activity, Australia – ABS Latest Release
This report provides estimates of value of building work and number of dwellings commenced, completed, under construction and in the pipeline. Data shows that total dwelling commencements rose 1.3% to 38,397 dwellings. Read more here.


The Owners – Strata Plan No. 85494 v PBS Building (NSW) Pty Ltd [2024] NSWSC 381
CIVIL PROCEDURE – pleadings – amendment – Plaintiff sought to add further defects to existing cause of action – whether Second Defendant would be irremediably prejudiced if amendments allowed – whether Second Defendant has established viable and realistic cross-claims in respect of defects – whether order should be made for amendments to take effect from date of commencement of proceedings.
Design and Building Practitioners Act 2020 (NSW), s 37; Environmental Planning and Assessment Act 1979 (NSW), ss 6.20, 9.32; Home Building Act 1989 (NSW), s 18C.

Construction & Design Australia Pty Ltd v Robinson (No 2) [2024] NSWSC 376
BUILDING AND CONSTRUCTION – contract – cost plus contract for construction of residence – alleged breach of contract – whether builder entitled to claim payment of outstanding invoices – whether builder entitled to claim damages for loss of profits.
BUILDING AND CONSTRUCTION – Australian Consumer Law – whether misleading or deceptive conduct – whether builder represented that cost of building would be around and not substantially more than $550,000 or $750,000 – whether owners relied on any such representation when deciding to enter the contract.
BUILDING AND CONSTRUCTION – contract – damages – whether “alternative transaction” case or “no transaction” case available – where damages claimed “because” of the alleged misleading or deceptive conduct.
BUILDING AND CONSTRUCTION – contract – variation – oral variation – whether owners agreed to substitute blockwork for Rediwall construction – whether builder can rely on oral variation in defence of claim by owner.
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law; Home Building Act 1989 (NSW); Home Building Regulation 1997 (NSW) (repealed); Home Building Regulation 2014 (NSW).

Absolute Tiling Solutions Pty Ltd v Certain Underwriters at Lloyds [2024] NSWSC 364
INSURANCE – professional indemnity insurance – plaintiff was design and construct contractor – claim made relating to external sandstone tiling designed and installed by plaintiff – insured activities included design but not installation – whether the liability resulted from the design or installation of the tiling system.
INSURANCE – professional indemnity policy underwritten by first defendant for three consecutive years – exclusion clause in respect of prior known circumstances – whether failure to disclose prior known circumstances – consequences of failure to disclose prior known circumstances after entry into the first of the three consecutive policies – application of continuous cover provision – application of ss 21 and 28 of the Insurance Contracts Act 1984 (Cth).
INSURANCE – whether plaintiff failed to comply with s 21 of the Insurance Contracts Act 1984 by failure to disclose that plaintiff performed external tiling or cladding works – whether the first defendant would have entered into policy if relevant failure had not occurred.
INSURANCE – construction of contract of insurance – exclusion clauses.
INSURANCE – brokers – claims for negligence and misleading or deceptive conduct – premises for claims not established.
BUILDING AND CONSTRUCTION – scope of rectification works – cost of rectification works.
Civil Liability Act 2002 (NSW), s 5D; Home Building Act 1989 (NSW), ss 18B, 18G; Insurance Contracts Act 1984 (Cth), ss 21, 28, 40.

Barber v Commissioner for Fair Trading [2024] NSWCATOD 42
ADMINISTRATIVE LAW – qualified supervisor certificate in the category of disconnection and reconnection of fixed electrical equipment (appliances) licence – administrative review of decision to refuse licence – scope of work within the Instrument – qualification required.
Administrative Decisions Review Act 1997 (NSW); Civil and Administrative Act 2013 (NSW); Home Building Act 1989 (NSW).

Amirbeaggi v NSW Self Insurance Corporation (No 4) [2024] NSWCATAP 57
COSTS – appeal costs – special circumstances.
Civil and Administrative Tribunal Act 2013 (NSW), ss 50, 60; Home Building Act 1989 (NSW).

Baranowski v Alan Walker t/as Stroud Plumbing and Gas [2024] NSWCATAP 50
APPEAL – whether denial of procedural fairness – whether decision against the weight of evidence – appeal allowed in part.
Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW).

Aboukalam v Commissioner for Fair Trading [2024] NSWCATOD 39
Administrative Law – plumber – refusal to grant tradespersons certificate – fit and proper person.
Civil and Administrative Tribunal Act 2013; Administrative Decisions Review Act 1997; Home Building Act 1989; Home Building Regulation 2014; Corporations Act 2001 (Cth).

The Owners – Strata Plan No 38308 v Gelder [2024] NSWCATAP 61
COSTS – appeals – whether the Tribunal erred in not finding special circumstances and ordering costs after the Respondent, in substance, consented to the relief sought by the Appellant, the Applicant below – failure to consent to the Appellant’s proceedings earlier was not unreasonable – the Tribunal did not err in not finding special circumstances and not awarding costs in favour of the Appellant – whether the order of the Tribunal directing the Appellant to exempt the Respondent from any costs imposition relating to the Tribunal’s proceedings was within power and the jurisdiction of the Tribunal to make.
Civil and Administrative Tribunal Act 2013 (NSW); Strata Schemes Management Act 2015 (NSW).


Statutory Instruments
Electricity Infrastructure Investment Amendment (Consumer Trustee and Infrastructure Planner) Regulation 2024 (2024 No 96) – Published LW 5 April 2024
Environmental Planning and Assessment Amendment (Schools) Regulation 2024 (2024 No 97) – Published LW 5 April 2024
Inclosed Lands Protection Amendment Regulation 2024 (2024 No 118) – Published LW 12 April 2024

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.

Published by:

Vishwa Shah, Faith Zalm

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