The Building (Residential Consumer Rights and Remedies) Regulations 2014 came into force on 1 January 2015. These new consumer protection measures introduce new obligations for contractors completing residential building work. “Building work” means any work involving a residential building, including structures that are not occupied by people, such as fences and retaining walls.
From 1 January 2015 contractors undertaking residential building work costing more than $30,000 (including GST) must:
- Provide a disclosure statement with information about their business. This statement should include information such as, the legal entity (eg sole trader, limited liability company), the key contact person for the project, information on insurance policies held by the Contractor, and any guarantees or warranties provided.
- Provide a project checklist. This checklist should include information such as how the project will be structured and managed, that a written contract will be required, and how disputes will be resolved.
- Have a written contract with the Homeowner. The contract must contain key information such as, the parties, the project, the payment process, remedy of defects, dispute resolution process, variations and an acknowledgement that the homeowner has been provided with the disclosure statement and project checklist. If there is no contract, or the contract is deficient there are default clauses that will apply.
There are some further changes from 1 January 2015 that apply to all residential building work, regardless of the value of the project:
- Once the building work is complete the contractor must give the homeowner a copy of any current insurance policy, a copy of and information for any guarantee or warranty, and a maintenance schedule for the completed work.
- There is a new defect repair period of 12 months from the date the building work is completed. The homeowner must notify the contractor in writing of the defect, and then the contractor must manage the repairs. If the contractor disputes the defect it is the contractor’s responsibility to show the defect is not their fault.
- There are new ways for homeowners to take action when implied warranties, which apply to all residential building work for up to 10 years, have not been met. These implied warranties cover almost all aspects of building work from compliance with the building code to good workmanship.
If you are a homeowner planning to build or renovate or a tradesman involved in residential projects, these changes will affect you. Contact the writer to discuss them further.