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New provisions in the Home Building Act for home builders

Construction Law News | March 2012

As we foreshadowed in our last issue, from 1 February 2012 the following amendments affected the building of homes and residential premises:

Statutory Warranty Periods

Builders, owner-builders, tradespeople and developers must warrant that their work has been conducted in a proper and workmanlike manner. From 1 February 2012 the warranty period will be reduced from 7 years to 6 years for structural defects and 2 years for non-structural defects with an extension of 6 months where a homeowner or buyer becomes aware of a defect in the last 6 months of that time period.

Threshold for mandatory home warranty insurance

The threshold for mandatory home warranty insurance for residential building work will be increased from $12,000.00 to $20,000.00.

Additional home warranty insurance benefits for owners

From 1 February 2012, a homeowner will only be required to pay the first $250 of any claim under the home warranty insurance rather than the $500 previously required from the homeowner.

Ten year limit

Where a home warranty policy has been issued prior to 1 July 2010, a claim must be brought within ten years of the relevant work being completed.

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