the domestic building legislation for property ... definition of “residential building work” (1)...

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The Domestic Building Legislation for Property Practitioners

June 2017

Tony Cahill Legal Commentator and Author

TABLE OF CONTENTS

About the author ..................................................................................... iii

Introduction ....................................................................................................................... 1

What work is covered by the Act? .................................................................................... 1

Home Warranty Insurance and Vendor Disclosure ........................................................... 8

Changed disclosure obligations as from 15 January 2015 .............................................. 16

A summary of the home warranty provisions ................................................................. 20

Requisitions (and replies) relating to domestic building ................................................. 25

Common law liability to successors in title for building work ....................................... 27

Loose-fill asbestos ........................................................................................................... 29

Reforms to insurance cover under the Act ...................................................................... 32

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ABOUT THE AUTHOR

Tony Cahill was admitted to practice in 1981. After 13 years with a

medium-sized city law firm, Tony commenced practice on his own account

at Chatswood. In July 2002, Tony commenced a ‘sabbatical’ from private

practice to concentrate primarily on legal education and writing.

Tony is a member of the Law Society’s Property Law and Environmental,

Planning and Development Committees. He has been a member of the

Re-Draft Committees for the editions of the Contract for the Sale of Land

since 1992, and the editions of the Contract for the Sale of Business since

2000.

In 1995, Tony completed the Property Agency TAFE course which was

then the most usual educational qualification for holders of licences under

the former Property, Stock and Business Agents Act 1941.

He was a co-author with Russell Cocks and Paul Gibney of the first NSW

edition of 1001 Conveyancing Answers, and is currently the co-author with

Gary Newton of Conveyancing Service New South Wales and Annotated

Conveyancing and Real Property Legislation New South Wales, both

published by LexisNexis Butterworths.

Tony has been a part-time lecturer at the University of Technology,

Sydney, in construction law, property transactions, legal studies, and real

estate law, and at the Sydney and Northern Sydney Institutes of TAFE in

various law subjects.

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– 1 –

The Domestic Building Legislation

Tony Cahill

____________________________________________________________

Introduction

This paper is designed to address some of the key issues of importance to

property practitioners arising out of the operation of the Home Building Act

1989 and the Home Building Regulation 2014. The 2014 Regulation

repealed and substantially recast the Home Building Regulation 2004.

The Home Building Amendment Act 2014 which commenced in the main

on 15 January 2015 (a small number of provisions commenced on 1 March

2015) made the most far-reaching changes to the principal Act in over a

decade. The curse of loose-fill asbestos insulation prompted further

changes in 2016.

In May 2017 reforms to the insurance provisions under the Act were

introduced into Parliament.

What work is covered by the Act?

Prior to 15 January 2015, the key definitions were scattered throughout the

Act and the Regulation – a veritable maze where key provisions were both

expanded and restricted by clauses in the Regulation. One of the benefits of

the 2014 amendments is to (largely) consolidate the definitions into

Schedule 1 of the Act.

Schedule 1 clause 1 is the main definitions provision, with some key (and

more complex) concepts set out in the clauses which follow. Some

important concepts defined in clause 1 include:

insurance under the Home Building Compensation

Fund means insurance under a contract of insurance

required to be entered into by or under Part 6.

owner of land means the only person who, or each person

who jointly or severally, at law or in equity:

(a) is entitled to the land for an estate of freehold in

possession, or

The Domestic Building Legislation – June 2016 Tony Cahill

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(b) is entitled to receive, or receives, or if the land

were let to a tenant would be entitled to receive, the

rents and profits of the land, whether as beneficial

owner, trustee, mortgagee in possession or

otherwise.

owner-builder means a person who does owner-builder

work under an owner-builder permit issued to the person

for that work.

owner-builder permit means an owner-builder permit

issued under Division 3 of Part 3.

specialist work means the following work whether or not

done in connection with a dwelling:

(a) plumbing and drainage work, other than roof

plumbing work,

(b) gasfitting work,

(c) electrical wiring work,

(d) any work declared by the regulations to be

refrigeration work or air-conditioning work.

Note. Work can be specialist work whether or not it is done in connection with a dwelling (so it can include work done in connection with commercial or industrial work).

Clause 2 defines “residential building work” in these terms:

2 Definition of “residential building work”

(1) In this Act, residential building work means any work

involved in, or involved in co-ordinating or supervising

any work involved in:

(a) the construction of a dwelling, or

(b) the making of alterations or additions to a dwelling,

or

(c) the repairing, renovation, decoration or protective

treatment of a dwelling.

(2) Each of the following is included in the definition of

residential building work:


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(a) roof plumbing work done in connection with a

dwelling,

(b) specialist work done in connection with a dwelling,

(c) work concerned in installing in a dwelling any fixture

or fixed apparatus that is designed for the heating or

cooling of water, food or the atmosphere or for air

ventilation or the filtration of water in a swimming

pool or spa (or in adding to, altering or repairing any

such installation).

(3) Each of the following is excluded from the definition of

residential building work:

(a) any work (other than specialist work) the reasonable

market cost of the labour and materials involved in

which does not exceed the amount prescribed by the

regulations,

(b) any work (other than specialist work) involved in the

manufacturing of a moveable dwelling, within the

meaning of the Local Government Act 1993 (other

than a moveable dwelling that is a manufactured home

within the meaning of that Act),

(c) any work involved in the manufacture, assembly or

erection of a moveable dwelling that is a manufactured

home within the meaning of the Local Government

Act 1993, other than:

(i) specialist work, or

(ii) work involving the connecting together on the site

on which the manufactured home is installed of its

major sections and any associated structures

forming part of the manufactured home and

attaching them to footings,

(d) any work (other than specialist work) involved in the

site preparation for, or the assembling or erection on

site of, a moveable dwelling excluded by paragraph

(b), unless the work requires development consent,


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(e) any work referred to in paragraph (d) done in relation

to land on which a council has authorised a moveable

dwelling to be placed by issuing an approval under the

Local Government Act 1993, whether or not a

development consent is also required,

(f) any work that would otherwise be residential building

work but that by or under another Act a person is

prohibited from doing unless the person is the holder

of a contractor licence or another authority under that

other Act, but subject to subclause (4),

(g) internal painting work, but subject to subclause (5),

(h) any work (other than specialist work) done in relation

to the removal and transport of a dwelling, but subject

to subclause (6),

(i) the supervision only of residential building work:

(i) by a person registered as an architect under the

Architects Act 2003, or

(ii) by a person supervising owner-builder work for no

reward or other consideration, or

(iii) by any other person, if all the residential building

work is being done or supervised by the holder of a

contractor licence authorising its holder to contract

to do that work,

(j) demolition work,

(k) any work involved in the installation of any material

that forms an upper layer or wearing surface of a floor

(even if installed as a fixture) and that does not

involve any structural changes to the floor, but not

including work involved in the installation of floor

tiles unless the regulations otherwise provide,

(l) any work that involves the installation or maintenance

of any fixed apparatus such as a lift, an escalator, an

inclinator or a garage door by means of which persons


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or things are raised or lowered or moved in some

direction that is restricted by fixed guides.

(4) Work referred to in subclause (3) (f) is not excluded

from the definition of residential building work if it is

part only of the work to be done under a contract to do

residential building work.

(5) Internal painting work is not excluded from the

definition of residential building work (under subclause

(3) (g)) if it is part only of the work to be done under a

contract to do residential building work.

(6) Work referred to in subclause (3) (h) is not excluded

from the definition of residential building work if it is

part only of the work to be done under a contract to do

residential building work at the new site of the dwelling

(whether or not that work is done under the same contract

as the contract to remove and transport the dwelling).

(7) The regulations may:

(a) declare any work to be included in the definition of

residential building work, or

(b) declare any work to be excluded from the definition

of residential building work.

Clause 3 of Schedule 1 defines a “dwelling”:

3 Definition of “dwelling”

(1) In this Act, dwelling means a building or portion of a

building that is designed, constructed or adapted for use

as a residence (such as a detached or semi-detached

house, transportable house, terrace or town house,

duplex, villa-home, strata or company title home unit or

residential flat).

(2) Each of the following structures or improvements is

included in the definition of dwelling if it is constructed

for use in conjunction with a dwelling:

(a) a swimming pool or spa,


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(b) parts of a building containing more than one dwelling

(whether or not the building is also used for non-

residential purposes), being stairways, passageways,

rooms, and the like, that are used in common by the

occupants of those dwellings, together with any pipes,

wires, cables or ducts that are not for the exclusive

enjoyment of any one dwelling,

(c) parts of a building containing one dwelling only

(where the building is also used for non-residential

purposes), being stairways, passageways and the like

which provide access to that dwelling,

(d) if non-residential parts of a building containing one or

more dwellings give support or access to the

residential part—the major elements of the non-

residential parts giving such support or access,

(e) cupboards, vanity units and the like fixed to a

dwelling,

(f) detached garages and carports,

(g) detached decks, porches, verandahs, pergolas and the

like,

(h) cabanas and non-habitable shelters,

(i) detached workshops, sheds and other outbuildings

(but not jetties, slipways, pontoons or boat ramps and

any structures ancillary to these exceptions),

(j) concrete tennis courts and the like but only if the work

involved is to be done under a contract to do other

work that is residential building work,

(k) driveways, paths and other paving,

(l) retaining walls,

(m) agricultural drainage designed or constructed to

divert water away from the footings of a dwelling or a

retaining wall,

(n) fences and gates,


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(o) ornamental ponds and water features, and other

structural ornamentation, the construction or

installation of which requires development consent but

only if the work involved is to be done under a

contract to do other work that is residential building

work,

(p) any other structure or improvement prescribed by the

regulations.

(3) Each of the following is excluded from the definition of

dwelling:

(a) a boarding house, guest house, hostel or lodging

house,

(b) all residential parts of a hotel or motel,

(c) any residential part of an educational institution,

(d) accommodation (other than self-contained units)

specially designed for the aged, persons with a

disability or children,

(e) any residential part of a health care building that

accommodates staff,

(f) a house or unit designed, constructed or adapted for

commercial use as tourist, holiday or overnight

accommodation,

(g) any part of a non-residential building that is

constructed or adapted for use as a caretaker’s

residence,

(h) a moveable dwelling (with or without a flexible

annexe) within the meaning of the Local Government

Act 1993 that is, or is a vehicle of a kind capable of

being, registered within the meaning of the Road

Transport Act 2013 (such as a caravan or a motor

home),

(i) a residential building for the purposes of which

development consent can be granted only because of


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State Environmental Planning Policy No 15—Rural

Landsharing Communities,

(j) concrete tennis courts and the like, except as expressly

included under subclause (2),

(k) ornamental ponds and water features and other

structural ornamentation, except as expressly included

under subclause (2),

(l) a building or portion of a building that is prescribed by

the regulations as excluded from the definition.

(4) A structure or improvement that is included in the

definition of dwelling if it is constructed for use in

conjunction with a dwelling is to be regarded as a

dwelling whether or not there exists any dwelling of

which it could be taken to form part.

The threshold value for work done requiring insurance is currently $20,000

(as from 1 February 2012). The prescribed amount was formerly $12,000

(since 2002) and prior to that $5,000.

Home Warranty Insurance and Vendor Disclosure

Some, but not all, vendors have disclosure obligations under the Act.

The legislation identifies a number of classes of “players” in the industry,

including:

➢ a holder of a licence;

➢ a holder of an owner-builder permit;

➢ a supplier of a kit home;

➢ a developer;

➢ a “person who does residential building work otherwise than under a

contract”; and

➢ a holder of a building consultancy licence (this category has now been

removed from the statutory scheme).

A “developer” is defined in section 3A as follows:


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3A Application of provisions to developers

(1) For the purposes of this Act, an individual, a partnership or

a corporation on whose behalf residential building work is done

in the circumstances set out in subsection (2) is a developer in

relation to that residential building work.

(1A) Residential building work done on land in the

circumstances set out in subsection (2) is, for the purpose of

determining who is a developer in relation to the work, deemed

to have been done on behalf of the owner of the land (in

addition to any person on whose behalf the work was actually

done). Note. This makes the owner of the land a developer even if the work is actually done on behalf of another person (for example, on behalf of a party to a joint venture agreement with the owner for the development of the land). The other person on whose behalf the work is actually done is also a developer in relation to the work.

(2) The circumstances are:

(a) the residential building work is done in connection

with an existing or proposed dwelling in a building or

residential development where 4 or more of the existing

or proposed dwellings are or will be owned by the

individual, partnership or corporation, or

(b) the residential building work is done in connection

with an existing or proposed retirement village or

accommodation specially designed for the disabled where

all of the residential units are or will be owned by the

individual, partnership or corporation.

(3) A company that owns a building under a company title

scheme is not a developer for the purposes of this Act.

The concept of a “person who does residential building work otherwise

than under a contract” may seem a little strange, given the requirements for

a written contract under, for example, section 7 of the Act. The provision is

most likely to be relevant to ‘do-it-yourself’ builders, who will rarely, if

ever, enter into a contract. The concept also deals with what, at first,

appears to be a gap in the definition of “owner-builder”. The definition of

an owner-builder set out above means that someone is not caught by the

definition of owner-builder unless that person holds a permit.

Finally, the successors in title to the builder, developer, owner-builder, etc.

have rights under the legislation (and occasionally obligations) under the

Act.


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The disclosure obligations on sale as they stood prior to 15 January 2015

were set out in sections 95, 96, and 96A of the Act. Those sections are set

out in full below:

95 Owner-builder insurance

(1) An owner-builder must not enter into a contract for the sale

of land on which owner-builder work is to be or has been done

by or on behalf of the owner-builder unless a contract of

insurance that complies with this Act is in force in relation to

the work or proposed work.

Maximum penalty: 1,000 penalty units in the case of a

corporation and 200 penalty units in any other case.

(2) An owner-builder must not enter into a contract for the sale

of land on which owner-builder work is to be or has been done

by or on behalf of the owner-builder unless a certificate of

insurance evidencing the contract of insurance, in a form

prescribed by the regulations, is attached to the contract.



(2A) A person who is the owner of land, and to whom an

owner-builder permit was issued under Division 3 of Part 3

after the commencement of this subsection and not more than 6

years previously must not enter into a contract for the sale of

the land in relation to which the permit was issued unless the

contract includes a conspicuous note:

(a) that an owner-builder permit was issued under

Division 3 of Part 3 to the person in relation to the land,

and

(b) that the work done under that permit was required to

be insured under this Act.



(3) This section does not apply:

(a) to a sale of the land more than 6 years after the

completion of the work, or

(b) if the reasonable market cost of the labour and

materials involved does not exceed the amount


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prescribed by the regulations for the purposes of this

section, or

(c) if the owner-builder work is of a class prescribed by

the regulations.

(4) Subject to subsection (4A), if an owner-builder contravenes

subsection (1) or (2A) in respect of a contract, the contract is

voidable at the option of the purchaser before the completion of

the contract.

(4A) A contract is not voidable as referred to in subsection (4)

if:

(a) the owner-builder obtained a certificate of insurance

evidencing a contract of insurance that complies with this

Act in relation to the work or proposed work before

entering the contract concerned, and

(b) before completion of the contract, the owner-builder

served on the purchaser (or an Australian legal

practitioner acting on the purchaser’s behalf) a certificate

of insurance, in the form prescribed by the regulations,

evidencing that contract of insurance.

(5) (Repealed)

96 Insurance in relation to residential building work

not carried out under contract

(1) A person must not do residential building work otherwise

than under a contract unless a contract of insurance that

complies with this Act is in force in relation to that work.



(2) A person who does residential building work otherwise than

under a contract must not enter into a contract for the sale of

land on which the residential building work has been done, or

is to be done, unless a certificate of insurance evidencing the

contract of insurance required under this Part for that work, in a

form prescribed by the regulations, is attached to the contract

of sale.



(2A) (Repealed)


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(2B) A person who does residential building work otherwise

than under a contract must, before entering into a contract for

sale of land on which the residential building work has been

done, or is to be done, give the other party to the contract a

brochure, in a form approved by the Director-General,

containing information that explains the operation of the

contract of insurance, and the procedure for the resolution of

disputes under the contract.

Maximum penalty: 40 penalty units in the case of a corporation

and 20 penalty units in any other case.

(3) This section does not apply:

(a) to an owner-builder, or

(b) to a person who does owner-builder work within the

meaning of Division 3 of Part 3 that does not involve:

(i) the construction of a dwelling, or

(ii) the alteration of, or additions to, a dwelling, or

(iii) the construction of an inground swimming

pool, or

(c) to an individual who is exempted by the regulations

from the requirements of section 12, or

(d) to a sale of the land more than 6 years after the

completion of the work, or

(e) the reasonable market cost of the labour and materials

involved does not exceed the amount prescribed by the

regulations for the purposes of this section.

(f) (Repealed)

(3A) Subject to subsection (3B), if a person contravenes

subsection (2) in respect of a contract for the sale of land, the

contract is voidable at the option of the purchaser before the

completion of the contract.

(3B) A contract is not voidable as referred to in subsection

(3A) if:

(a) the person obtained a certificate of insurance


Act in relation to the residential building work before



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(b) before completion of the contract, the person served

on the purchaser (or an Australian legal practitioner

acting on the purchaser’s behalf) a certificate of

insurance, in the form prescribed by the regulations,


(4) (Repealed)

96A Obligations of developers in relation to

insurance

(1) A developer must not enter into a contract for the sale of

land on which residential building work has been done, or is to

be done, on the developer’s behalf unless a certificate of

insurance evidencing the contract of insurance required under

section 92 by the person who did or does the work for the

developer, in a form prescribed by the regulations, is attached

to the contract of sale.



(1A) A developer must, before entering into a contract, give the

other party to the contract a brochure, in a form approved by

the Director-General, containing information that explains the

operation of the contract of insurance, and the procedure for the

resolution of disputes under the contract.

Maximum penalty: 40 penalty units in the case of a corporation

and 20 penalty units in any other case.

(2) Despite anything to the contrary in section 3A, a reference

in this Part to a person who does residential building work:

(a) does not include a reference to a developer, and

(b) includes a reference to a person who does the work on

behalf of a developer.

(3) Subject to subsection (3A), if a person contravenes

subsection (1) in respect of a contract, the contract is voidable

at the option of the purchaser before the completion of the

contract.

(3A) A contract is not voidable as referred to in subsection (3)

if:

(a) the person obtained a certificate of insurance



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Act in relation to the residential building work before


(b) before completion of the contract, the person served

on the purchaser (or an Australian legal practitioner

acting on the purchaser’s behalf) a certificate of

insurance, in the form prescribed by the regulations,


(4) This section does not apply to a sale of the land more than 6

years after the completion of the work.

Given the practical difficulties which occasionally arose in complying with

the requirements set out above, section 97 is also significant:

97 Exemptions from insurance requirements

(1) A person may apply to the Director-General to be exempted

from the operation of a provision of section 95 or 96 in a

particular case.

(1A) A person may apply to the Director-General to be

exempted from the operation of any other provision of this

Part, but only if:

(a) the person is, or is a member of a class of persons

who are, prescribed as entitled to apply for the

exemption, or

(b) circumstances prescribed by the regulations as

entitling the making of an application apply to the person.

(2) The Director-General may, by notice in writing, grant an

exemption under this section, either unconditionally or subject

to conditions, if satisfied that:

(a) there are exceptional circumstances, or

(b) full compliance is impossible or would cause undue

hardship.

(3) An exemption under this section operates to exempt the

person from the operation of the provision concerned, subject

to compliance with any conditions of the exemption.

Finally, practitioners considering (or confronted with) “special conditions”

in contracts for sale attempting to “deal with” a non-compliance with the

above provisions should have regard to sections 103D and 134:


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103D Part may not be excluded

A provision of a contract or another agreement that purports to

restrict or remove the rights of a person under this Part is void.

134 Aiding and abetting etc

A person who:

(a) aids, abets, counsels or procures a person to commit,

or

(b) induces or attempts to induce a person, whether by

threats or promises or otherwise, to commit, or

(c) is in any way, directly or indirectly, knowingly

concerned in, or party to, the commission by a person of,

or

(d) conspires with another to commit,

an offence against this Act or the regulations is guilty of the

same offence and liable to be punished accordingly

One of the difficult issues with the exemptions set out in sections 95(3)(a),

96(3)(d) and 96A(4) is that, prior to 1 February 2012, the Act did not

comprehensively define when work was taken to be complete for the

purposes of the Act. Section 3B (and, since 15 January 2015, section 3C)

attempt to deal with that lacuna:

3B Date of completion of residential building work

(1) The completion of residential building work occurs on the

date that the work is complete within the meaning of the

contract under which the work was done.

(2) If the contract does not provide for when work is complete

(or there is no contract), the completion of residential building

work occurs on practical completion of the work, which is

when the work is completed except for any omissions or

defects that do not prevent the work from being reasonably

capable of being used for its intended purpose.

(3) It is to be presumed (unless an earlier date for practical

completion can be established) that practical completion of


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residential building work occurred on the earliest of whichever

of the following dates can be established for the work:

(a) the date on which the contractor handed over

possession of the work to the owner,

(b) the date on which the contractor last attended the site

to carry out work (other than work to remedy any defect

that does not affect practical completion),

(c) the date of issue of an occupation certificate under the

Environmental Planning and Assessment Act 1979 that

authorises commencement of the use or occupation of the

work,

(d) (in the case of owner-builder work) the date that is 18

months after the issue of the owner-builder permit for the

work.

(4) If residential building work comprises the construction of 2

or more buildings each of which is reasonably capable of being

used and occupied separately, practical completion of the

individual buildings can occur at different times (so that

practical completion of any one building does not require

practical completion of all the buildings).

(5) This section applies for the purposes of determining when

completion of residential building work occurs for the purposes

of any provision of this Act, the regulations or a contract of

home warranty insurance.

Changed disclosure obligations as from 15 January 2015

In September 2013 the Government issued a Position Paper which

canvassed significant amendments to the Home Building Act 1989. Many

of the proposed amendments have been carried through resulting in a

radical change to the obligations of an owner-builder when selling. Section

6.3 of the Position Paper stated:

6.3 Prohibit owner-builders from obtaining home warranty insurance


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The 2012 Issues Paper discussed the current situation where builders

who carry out work for owner-builders are required to provide the

owner-builder with home warranty insurance if the value of that

work exceeds $20,000. In addition, if an owner-builder wishes to

sell the property within six years of the work’s completion

(‘completion’ for an owner-builder is deemed to be 18 months after

the owner-builder permit was issued), they need to obtain a further

home warranty insurance certificate for all the works combined.

These requirements give rise to duplicated insurance coverage. In

addition, requiring owner-builders to obtain home warranty

insurance when selling their property blurs the distinction between

properties where work has been performed by an owner-builder and

properties where work has been performed by a licensed builder and

could act as an inducement for owner-builders to be more

commercially orientated.

Although the Act currently seeks to draw a distinction between

licensed builders and owner-builders by requiring owner-builders

who sell their property to disclose that owner-builder work has been

undertaken, it does not also apply to the subsequent purchaser of the

owner-builder property.

Policy position: Prohibit owner-builders from obtaining home

warranty insurance. To ensure potential purchasers are aware

that owner-builder work has been undertaken on a property,

contracts for sale of owner-built properties will be required to

contain a conspicuous note stating the date the owner-builder

permit was issued and any other necessary information. This

would draw a sharper distinction for prospective purchasers

between work undertaken by an owner-builder and work

undertaken by a licensed, qualified builder. To minimise

compliance costs, the current register of owner-builder permits

maintained by NSW Fair Trading would be made available for

online inspection, free of charge.

Unhappily, the Position Paper also indicated that the current high-rise

insurance exemption will be continued “at this stage”.

Upon commencement the 2014 amending Act made significant changes to

the Act as it affects conveyancing practice (among many other topics):


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Home warranty insurance is renamed as “insurance under the Home

Building Compensation Fund”

A new definition of “completion date” applies to a new building in

a strata scheme (new section 3C)

3C Date of completion of new buildings in strata

schemes

(1) This section applies to residential building work

comprising the construction of a new building in a strata

scheme (within the meaning of the Strata Schemes

Management Act 2015) where the issue of an occupation

certificate is required to authorise commencement of the

use or occupation of the building.

Note. Section 3B provides for the date of completion

of other residential building work.

(2) The completion of residential building work to which

this section applies occurs on:

(a) the date of issue of an occupation certificate that

authorises the occupation and use of the whole of the

building, unless paragraph (b) applies, or

(b) the occurrence of some other event that is prescribed

by the regulations as constituting completion of the work.

(3) If a contract to do residential building work (the

primary contract) comprises the construction of 2 or more

separate buildings, the date of completion of that work is

to be determined as if there were a separate contract for

each separate building (with each contract on the same

terms as the primary contract) so that the work for each

building will have a separate completion date. For the

purposes of this section, a building is separate if it is

reasonably capable of being used and occupied separately

from any other building.

Note. Separate buildings can still have the same

completion date if they are completed at the same

time.


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(4) This section applies for the purpose of determining

when completion of residential building work occurs for

the purposes of any provision of this Act, the regulations

or a contract of insurance under the Home Building

Compensation Fund.

(5) In this section:

building means any structure that, as a new building,

requires the issue of an occupation certificate to authorise

its use and occupation.

occupation certificate means an occupation certificate

under the Environmental Planning and Assessment Act

1979.

Note. A swimming pool, tennis court or detached

garage can be a building for the purposes of this

section if an occupation certificate is required to

authorise its use and occupation. If a structure in a

strata scheme does not require an occupation

certificate, section 3B will apply to it instead of

section 3C.

The distinction between structural and non-structural defects is

replaced with concepts of “major defects” and “major elements of a

building” (s 18E(3) and (4))

Most significantly for property practitioners, the new section 95:

➢ Abolishes statutory cover for owner-builder work (s 95(1))

➢ Requires disclosure by way of a conspicuous note of details of the

owner-builder permit and the absence of owner-builder insurance (s

95(2))

➢ The new section does not apply where the sale occurs more than 7

years and 6 months after date of the permit (s 95(3))

➢ The consumer warning requirement applies not only to the owner-

builder but to successors in title (s 95(4))

A new section 96B(1) provides: “A contract for the sale of land

comprising a house or unit that is excluded from the definition of


– 20 –

dwelling in this Act because it was designed, constructed or

adapted for commercial use as tourist, holiday or overnight

accommodation must contain the warning required by this section if

work has been done on the land in the previous 6 years that would

have been residential building work had the house or unit not been

excluded from the definition of dwelling.”

The 96B warning is a “prominent statement” to the effect that the

property does not have protection under the Act.

The section prohibits entering into the contract unless the statement

is attached; the contract is voidable if no statement in contract.

Savings and transitional provisions affect ss 95, 96B. Schedule 4

clauses 131 and 132 of the Act provide.

131 Insurance obligations of owner-builders

Section 95 (and sections 97 and 101 in their operation in respect of

that section) as in force before being amended by the amending Act

continues to apply to and in respect of the following contracts:

(a) a contract of insurance or a contract for the sale of land

entered into before the commencement of the amendment of

section 95,

(b) a contract for the sale of land entered into after that

commencement if a contract of insurance that complies with

this Act is in force in relation to the work concerned when the

contract is entered into.

132 Contracts for sale of exempt dwellings

Section 96B (Obligations of sellers of excluded dwellings (houses

and units used for commercial purposes)) does not apply to a

contract for the sale of land entered into before the commencement

of that section.

A summary of the home warranty provisions

1 This home warranty insurance scheme has changed frequently. A

statement of basic principles in 2017 would not be identical to one

in 2014, much less 2009.

2 There are several classes of persons who are affected by the Act,

and the provisions relating to insurance and the provision of proof

of insurance are inconsistent between these classes.

3 The major classes of persons affected by the Act are, as mentioned

above:


– 21 –

➢ holders of a contractor licence (a person who does

residential building work under a contract)

➢ suppliers of kit homes;

➢ developers (defined in s 3A of the Act);

➢ owner-builders (defined in Schedule 1);

➢ persons who do residential building work otherwise than

under a contract (not defined in the Act, but presumably a

‘spec builder’ would fall within the scope of the term, as it

seems would a person doing owner-builder work without an

owner-builder permit);

➢ successors in title to any of the above;

➢ (For the sake of completeness, the Act for a time envisaged

the licensing of building consultants who undertake

domestic pre-purchase inspections, but they are a

significantly different class of licence-holder and in any

event have not been the subject of licensing or regulation

since September 2009).

4 (a) A person who does residential building work under a contract

is required to provide a certificate of insurance to the other party

to the contract (not necessarily to attach it to the relevant contract,

which typically will not be a contract for sale) – see s 92.

(b) One area of uncertainty in the operation of section 92 is what

are the obligations where the “other party to the contract” is an

owner-builder. Section 95(6) as it stood prior to 15 January 2015

provided:

To avoid doubt, this section extends to residential building

work that is also owner-builder work.

The subsection was amended (and clarified) with effect from 15

January 2015:

To avoid doubt, this section extends to residential building

work that is also owner-builder work (when the work is done

under a contract between the person who contracts to do the

work and the owner-builder).

5 Prior to September 2009, a supplier of a kit home had

corresponding obligations (see the now repealed section 93).


– 22 –

6 The developer must attach a certificate of insurance to the

contract for sale (section 96A), unless the developer complies

with cl 61 of the Home Building Regulation 2014, or unless the

construction work is the construction of a multi-storey building

where work commenced on or after 31 December 2003 (see cl 56

of the Regulation).

7 An owner-builder is not required to effect home warranty

insurance whenever he or she undertakes residential building

work. Prior to 15 January 2015, the rationale was that what might

be called the “attaching” obligations for an owner-builder were

triggered not by the doing of the work but rather by the entering

into a contract for sale. As from 15 January 2015, the product is

simply not available to owner-builders (see s 95(1) as amended

with effect from 15 January 2015).

8 The owner-builder who did obtain insurance prior to its abolition,

and the person who does residential building work otherwise than

under a contract, must attach a certificate of insurance where he

or she enters into a contract for sale within six years after

completion of the work (ss 95 as it stood prior to the January 2015

amendment and 96).

9 The owner-builder must include a conspicuous note in the contract

which complies with section 95 (the content of the note changed

with effect from 15 January 2015). The developer and the person

who does building work otherwise than under a contract has the

obligation to provide a NSW Fair Trading brochure (ss 96A(1A)

and 96(2B)).

10 (a) A successor in title to either a developer or a person who does

residential building work otherwise than under a contract (or for

that matter the client who contracts with a licensed builder) is not

required to provide (whether by attaching to the contract or

otherwise) any evidence of insurance.

(b) A successor in title to an owner-builder was not required to

provide evidence of insurance (or to make any disclosure in the

contract) when selling prior to 15 January 2015. As from that date

section 95(4) contemplates that a successor in title is caught by the

disclosure obligations set out in the section (although that


– 23 –

obligation may itself be removed by a savings and transitional

provision).

11 As from 15 January 2015, section 96B creates a new class of

vendors with disclosure obligations.

12 The disclosure requirements outlined above are subject to

exemptions. Some of the more important exemptions include (and

these do not necessarily apply to every category or at every point

in the history of the HWI scheme): insurable value below

$20,000; the “hardship” exemption which can be applied for from

NSW Fair Trading; work done more than a specified number of

years (usually six years but note the relevant period in the

amended section 95 is seven years and six months) prior to the

contract for sale (and note sections 3B and 3C of the Act which

defines when work is taken to be complete). Also note that the

right of rescission by a purchaser given by ss 95 (as it formerly

stood), 96, or 96A is lost in some (but not all) circumstances if the

vendor serves an insurance certificate on the purchaser even

though the certificate was not attached to the contract.

12 Page 2 of the standard contract for sale of land lists a number of

documents which are commonly attached to contracts, including

evidence of insurance under the Home Building Act (and in the

2005 and subsequent editions, a brochure or note / warning).

Wherever such documentation exists, it is helpful to the parties for

the document to be attached; however there is no legal

requirement to do so in every case.

It is now clear that, at general law (that is, unless there was a statutory right

provided by the Home Building Act 1989), a failure to comply with the

insurance provisions of the Act goes to quality rather than to title. In

Adderton v Festa Holdings Pty Ltd & Ors [2003] NSWSC 1065, Gzell J

held there was no obligation on an on-seller to arrange insurance cover

where the predecessor in title had not done so. His Honour then continued

(at [21] to [25]):

21 It was argued on behalf of the plaintiff that even if there was an

obligation upon him to obtain alternative insurance, that was not

a proper subject of a requisition on title strictly so called that

could prevent him from requiring the first defendant to complete

until a reasonable time after he had complied with the requisition

(Adolfson v Jengedor Pty Ltd (1995) 6 BPR 14,147).


– 24 –

22 The contract for sale of the dwelling extended the definition of

the term “requisition”. It did not, however, extend to a claim. In

my view, the first defendant was entitled to resist completion of

the contract for sale of the dwelling only if the absence of

insurance of the residential building work was a defect in title to

the property.

23 I doubt that the absence of such insurance goes to the title to the

property. The first defendant contracted to acquire clear title to

land and dwelling. There was no impediment to it acquiring that

title.

24 In Sullivan v Dan (1996) 7 BPR 14,974, Bryson J held that the

lack of compliance with the conditions of a development consent

by a local council was not a defect in title. I regard a lack of

insurance, if required, in like vein.

25 However, this is an issue that it is unnecessary for me to decide in

view of my finding that the plaintiff was not obliged to remedy a

lack of insurance by WDD Constructions Pty Ltd. It is an

important question that ought not to be the subject of mere obiter

dicta.

The decision of Gzell J was confirmed on appeal (Festa Holdings Pty Ltd

& anor v Adderton & ors [2004] NSWCA 228, 13 July 2004). Indeed, the

Court of Appeal expressly addressed the issue about whether a lack of

home warranty insurance constituted a defect in title in the following terms

(per Mason P at [54]–[55], [58]–[60]):

54 The subject matter of the Contract was land described as a

freehold estate under Torrens title. Legal and practical enjoyment

of that land was in no way undermined by the non-existence of a

contract of insurance underpinning whatever rights the Purchaser

might wish to assert against the original builder under the

statutory warranties. Nothing in the evidence suggests that there

was any basis for a claim against the builder at the time when the

Contract was entered into (cf Carpenter v McGrath (1996) 40

NSWLR 39).

55 Not even the quality of the subject property is affected by the

absence of insurance. All that has happened is that the Vendor

(not having the benefit of insurance) did not promise to include

that benefit as part of the Contract subject-matter. For all that one

knows, the value of the absent insurance was taken into account

in the negotiated contract price.

…

58 Nothing in the Contract addressed the question of insurance

under the Act. The Vendor had not bargained for nor obtained

any such insurance from his vendor, Windy Dropdown. He had

not been obliged to do so before he completed the purchase of the

land from Windy Dropdown. Nor was he obliged by statute,

contract or fiduciary obligation to procure such insurance for the


– 25 –

benefit of his purchaser, a procurement that the appellant

conceded was virtually impossible.

59 Gzell J held that s94 prescribed the effect of the original builder’s

failure to insure. Nothing required the Vendor to obtain

alternative insurance cover for his purchaser. Indeed, s94(1C)(a)

was a counter-indicator. In the absence of a contractual

requirement obliging the Vendor to obtain alternative insurance

cover, his answers to requisitions 18B and 29 were appropriate.

The absence of insurance imposed no impediment to the

Purchaser obtaining clear title to the land and dwelling that were

the subject of the Contract. His Honour refrained from deciding

that there was a defect in title, although he favoured the view that

there was not a defect.

60 It will be seen that I agree substantially with the reasoning of the

learned primary judge. Unlike him, I think it necessary to grasp

the defect of title issue. I have concluded that there was no such

defect when the Act and the Contract are analysed. The second

appellant’s argument is essentially circular and flawed in its

statutory analysis. Insurance cover would have been an advantage

to the Purchaser to the extent that any of the statutory warranties

were breached within the seven year timeframe, but this was

insufficient to give it a right to insist that the Vendor obtain such

cover.

Requisitions (and replies) relating to domestic building

The operation of the Act raises significant issues for parties and their

advisers about what (and when) to ask about domestic building work.

Some of the issues for consideration BY THE PURCHASER’s

SOLICITOR:

➢ What information does a purchaser need?

➢ What information would a purchaser like to have?

➢ What questions should a purchaser ask?

➢ When should a purchaser ask the questions?

➢ If the purchaser asks questions before exchange, of what value are the

answers?

➢ If the purchaser asks questions after exchange, of what value are the

answers?

➢ What answers are “satisfactory”?

➢ What rights does the purchaser have arising out of “unsatisfactory”

answers?

Some of the issues for consideration BY THE VENDOR’s SOLICITOR:


– 26 –

➢ What information does a vendor’s solicitor need from the vendor?

➢ When should that information be sought?

➢ Are there any matters which should be disclosed in the contract?

➢ What questions (if asked) might cause problems to the vendor, and how

should those issues be addressed by the vendor’s solicitor?

Issues regarding whether there has been any building work done to which

the Act applies, the identity of the builder, whether or not a permit or

licence issued under the Act, and particulars of insurance, should ideally be

addressed prior to exchange of contracts. From the vendor’s perspective, it

is vital to identify whether the vendor has obligations under ss 95, 96 and

96A, and to prepare the contract in a way that meets those obligations.

From the purchaser’s perspective, there are two issues. The right to rescind

for a lack of insurance will not arise independently of the Act, so the

purchaser’s position should be assessed before the purchaser is

contractually bound. Where a purchaser has a right to render the contract

void, the purchaser needs to be aware of that right. A solicitor who failed to

advise their purchaser clients of a right to rescind under s 95 was held

liable in damages in Livingstone v Mitchell [2007] NSWSC 1477;

BC200711121. In that case, the purchaser’s solicitor inquired about the

applicability of the Act in post-contractual requisitions. The replies

indicated that the property was insured, named an insurer, and quoted a

policy number. Unfortunately, the details related to a home and contents

policy, not a policy under the Act. The case highlights the prudence of

verifying insurance details by obtaining certificates of currency.

Can the purchaser lose rights of rescission given under the Act by estoppel,

waiver or election? Zucker v Straightlace Pty Ltd (1987) 11 NSWLR 87

held that the common law doctrine of election applied to the 1988 version

of the Conveyancing (Sale of Land) Regulation. In consequence, where the

purchase has a right of rescission under the Regulation, the purchaser could

consider his or her position but, during that period, must not do anything

inconsistent with the purchaser reserving his or her position. It seems

unlikely that the doctrine applies to rights under ss 95, 96 or 96A of the

Home Building Act in the light of the reasoning in Tudor Developments Pty

Ltd v Makeig [2007] NSWSC 1116; BC200708585. In that case, Young CJ

in Eq held that estoppel could not validly be pleaded against a defendant

for a plaintiff’s non-compliance with s 96A of the Act. In that case, the fact

that the purchaser knew that insurance had been effected did not preclude


– 27 –

the purchaser from rescinding the contract on the grounds of a failure to

provide a certificate of insurance in the prescribed form. The appeal by the

developer was dismissed by a majority of the Court of Appeal (Basten JA,

Beazley JA agreeing; Handley AJA dissenting): Tudor Developments Pty

Ltd v Makeig [2008] NSWCA 263.

Common law liability to successors in title for building work

The High Court has had cause to consider the liability of a builder in tort to

successors in title to building works.

Bryan v Maloney (1995) 182 CLR 609 is authority for the proposition that

a builder can be liable in tort to a subsequent owner of a dwelling where

the subsequent owner suffers economic loss. Whether that principle

extended to a warehouse and office complex was the subject of the

proceedings in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004]

HCA 16 (High Court of Australia, 1 April 2004). The High Court agreed

with the Queensland Court of Appeal that there was no cause of action in

negligence against the builder. However, the members of the High Court

indicated that the basis for finding for the builder was not as simple as

finding a distinction existed between residential dwellings and commercial

premises. The decision in Woolcock says that any attempt to draw what is

described as a ‘bright line’ between the principle in Bryan and the

circumstances in Woolcock was flawed.

As stated in the joint judgment of Gleeson CJ, Gummow, Hayne and

Heydon JJ (at [17]):

… [I]t may be doubted that the decision in Bryan v Maloney should be

understood as depending upon drawing a bright line between cases

concerning the construction of dwellings and cases concerning the

construction of other buildings. If it were to be understood as

attempting to draw such a line, it would turn out to be far from bright,

straight, clearly defined, or even clearly definable. As has been pointed

out subsequently, some buildings are used for mixed purposes: shop

and dwelling; dwelling and commercial art gallery; general

practitioner’s surgery and residence. Some high-rise apartment blocks

are built in ways not very different from high-rise office towers. The

original owner of a high-rise apartment block may be a large

commercial enterprise. The list of difficulties in distinguishing between

dwellings and other buildings could be extended.


– 28 –

Callinan J provides an even more detailed list of issues raised by Bryan v

Maloney (at [202], omitting footnotes):

(a) ...

…

(ii) Does Bryan v Maloney apply not only to dwelling houses

in the narrow sense but also to other dwellings, for

example, residential apartments in a multi-storey

development, like the building in Opat v National Mutual

Life Association of Australasia Ltd? Does it apply to

‘mixed’ buildings, like a shop and dwelling or a building

comprising a dwelling and commercial art gallery or a

general practitioner’s residence combined with surgery? In

the case of a ‘mixed’ building, if the decision is applicable,

then does it apply to the whole building, or only to the

residential part of it, or does the answer to this question

depend on some such notion as that of ‘dominant use’?

(iii) Does the decision apply to dwellings which are not the

principal residence of the purchaser, for example, an

apartment in or near the city for occasional use, or a

holiday home?

(iv) What if the value of the dwelling is only a small part of the

total value of the house and land, as where a modest

dwelling is bought which stands on a very large piece of

land or on land which is, by reason of its location,

exceptionally valuable? What of a house forming part of a

large rural property stocked with cattle or used for

viticulture? What of a rural property with two houses, one

intended for occupation by a manager? Do the houses in

the last two examples answer the description of Toohey J,

‘a house that is a non-commercial building’?

(b) If the decision is not confined to houses, or to houses and other

dwellings, then to what other buildings does it apply? The joint

judgment left open the position of buildings other than permanent

dwelling houses, while Toohey J, as just mentioned, limited his

decision to 'a house that is a non-commercial building'. In

Western Australia, Malcolm CJ has accepted the existence of a

duty of care to a subsequent occupier on the part of the builder of

a commercial greenhouse.

The decision in Bryan v Maloney was delivered at a time when proximity

was regarded as a significant touchstone in determining liability in

negligence. The “proximity” approach has been subsequently rejected by

the High Court, but no clear principle has emerged as its successor. While

Bryan v Maloney is still good law, the doctrinal basis for the decision is

dubious; at least one of the Justices of the High Court indicated in

Woolcock that were the issue in Bryan before him today, he would be


– 29 –

inclined to overrule it (Callinan J at [211] at following). One of the factors

which influenced His Honour was the existence of statutory schemes of

home warranty insurance (such as the Home Building Act 1989 (NSW))

providing protection to consumers purchasing dwelling houses (although it

should be said that such schemes existed at the time of the decision in

Bryan and arguably gave stronger levels of protection than their

counterparts do today).

The High Court revisited the question of common law liability in

negligence in Brookfield Multiplex Ltd v Owners Corporation Strata Plan

61288 [2014] HCA 36. In that case the building comprised strata-titled

serviced apartments. At first instance, McDougall J held that the builder

did not owe the owners corporation the duty of care alleged. The Court of

Appeal held that Brookfield owed the owners corporation a duty to

exercise reasonable care in the construction of the building to avoid

causing the owners corporation to suffer loss resulting from latent defects

in the common property vested in the corporation, which defects (a) were

structural, or (b) constituted a danger to persons or property in, or in the

vicinity of, the serviced apartments, or (c) made those apartments

uninhabitable.

The questions considered by the High Court were framed in the reasons of

French CJ at [8]:

1. Did Brookfield owe a duty of care to the

Corporation independently of the existence of a duty of care

owed to Chelsea, and, if so, what was its content?

2. Did Brookfield owe a duty of care to Chelsea and

thereby a similar duty of care to the Corporation, and, if so,

what was its content?

The Court answered both questions in the negative. The appeal was upheld.

Loose-fill asbestos

The Home Building and Duties Amendment (Loose-fill Asbestos Insulation

Affected Premises) Act 2015 was assented to, and commenced, on 5

November 2015.

The amendment Act inserts a new Division 1A into Part 8 of the Act.

Sections 119A to 119C are set out below:

119A Definitions


– 30 –

In this Division:

affected residential premises means any residential premises

that are listed on the Register, but does not include any

premises of a class that is excluded from this definition by the

regulations.

loose-fill asbestos insulation means loose-fill amosite or

crocidolite asbestos used as ceiling insulation.

Register means the register required to be maintained under

section 119B.

residential premises means any building that is wholly or

partly used (or is wholly or partly designed, constructed or

adapted for use) as a place of residence.

119B Register

(1) The Secretary is to maintain a register of residential premises

that contain or have contained loose-fill asbestos insulation.

(2) Residential premises are to be listed on the Register if the

Secretary is satisfied that the presence of loose-fill asbestos

insulation at the premises has been verified in accordance with

the regulations.

(3) Other residential premises may be listed on the Register in the

circumstances prescribed by the regulations.

(4) The Register is to include the following particulars in relation

to residential premises that are listed on the Register:

(a) the address and title particulars (such as the Lot and DP

numbers) of the land where the premises are located,

(b) any other particulars that are prescribed by the

regulations.

(5) The names of owners or occupiers of residential premises who

are individuals are not to be included on the Register.

(6) The Register is to be in the form determined by the Secretary

and is to be available for inspection by the public.


– 31 –

(7) The Secretary is to remove the following particulars relating to

affected residential premises from the Register:

(a) all particulars if the Secretary is satisfied that the

premises have been demolished and the land on which

the premises were erected has been remediated,

(b) any particulars that the Secretary is satisfied:

(i) are false, erroneous or misleading, or

(ii) have been erroneously included in the Register,

(c) any other particulars in the circumstances prescribed by

the regulations.

119C Warning signs

(1) The owner of affected residential premises must ensure that a

compliant warning sign is displayed at any place at the

premises that is prescribed by the regulations.

(2) This section does not require the owner of a lot in a strata

scheme to display a compliant warning sign at any part of the

premises that is not comprised in the lot.

(3) If affected residential premises are the subject of a strata

scheme, the owners corporation for the scheme must ensure

that a compliant warning sign is displayed at any place at the

premises that is prescribed by the regulations and consists of

common property.

(4) A person must not remove, or cause or permit to be removed, a

compliant warning sign from affected residential premises.

(5) Despite subsection (4), a compliant warning sign may be

removed from affected residential premises by a person

authorised under section 126 (1) to enter the premises.

(6) The Secretary may, by order published in the Gazette, extend

the application of this section to any premises specified in the

order if the Secretary is satisfied that there are reasonable

grounds to suspect that the premises contain loose-fill asbestos

insulation.


– 32 –

(7) In this section:

affected residential premises includes any premises in relation

to which an order under this section is in force.

compliant warning sign means a sign about loose-fill asbestos

insulation that complies with any requirements (including any

requirements about its display) prescribed by the regulations.

lot, owners corporation and strata scheme have the same

meanings as in the Strata Schemes Management Act 1996.

Maximum penalty: 200 penalty units in the case of a


Additional details are prescribed – see clauses 68A to 68C Home Building

Regulation 2014.

Reforms to insurance cover under the Act

Since 1 July 2010, NSW Government has been sole supplier of coverage

(via the State Insurance Regulatory Authority). The Government has long-

standing concerns about operation of the Home Building Compensation

Fund, and in particular its financial viability. According to the SIRA

website (as at June 2017), the Fund has sustained $95 million in losses

since 2013 and is accruing unfunded liabilities at rate of over $1.7 million

per week.

The Government’s response was to introduce the Home Building

Amendment (Compensation Reform) Bill 2017. As at the date of

preparation of this paper the Bill had passed the Legislative Assembly and

is awaiting consideration by the Legislative Council.

The key features of interest to conveyancing practitioners are:

➢ Reopening the home building insurance market to private insurers.

➢ Allowing coverage to be provided in two as well as one insurance

contract – non-completion coverage and breach of statutory

warranty coverage.

➢ Prohibiting claims more than 10 years after work completed.

➢ Vesting regulatory functions over private insurers via SIRA

including licensing of insurers.

http://www.legislation.nsw.gov.au/xref/inforce/?xref=Type%3Dact%20AND%20Year%3D1996%20AND%20no%3D138&nohits=y


– 33 –

➢ Setting up an indemnity scheme to provide a remedy where a

licensed insurer becomes insolvent.

➢ Allowing development of approved “alternative indemnity

products”.

➢ Enabling regulations to exempt builders doing work on behalf of

the Crown or State owned corporations from insurance

requirements.

➢ Adoption of new terminology:

• Construction period insurance contract: must cover a person for

whom work is done and the person’s successors in title against the

risk of loss arising from non-completion of work, and breaches of

statutory warranty, where the contractor becomes insolvent, dies or

disappears before completing the work

• Warranty period insurance contract: must cover a person for

whom work is done and the person’s successors in title against the

risk of loss arising from a breach of statutory warranty where the

contractor becomes insolvent, dies or disappears.

➢ One policy can cover both classes of risk.

How are the key provisions relevant to vendors and purchasers (sections 95

to 96B) affected?

➢ References to “the Secretary” (Commissioner for Fair Trading) are

changed to “the Authority” (that is, SIRA).

➢ A Note is added cross-referencing Part 6B (which deals with

alternative indemnity products).

➢ The reference in s95 to “insurance under the Home Building

Compensation Fund” changed to “insurance under this Part”.

Query whether these changes go far enough:

➢ Should ss 96 and 96A refer to “one or more” contracts of insurance

being disclosed in contracts for sale?

➢ There is no attempt to clarify the “conspicuous note / prominent

statement” dilemma.

* * * * *

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