Home building and renovating

Cooling-off period

Under the Home Building Act 1989 (NSW), you may be able to cancel a contract for home building work with limited or no penalty if the amount of the contract is over $20,000 and you give notice to the licensed builder or contractor in writing within:

• five business days of when you sign or receive a copy of the contract, or
• seven days of becoming aware that the contract should have contained a cooling-off period and did not.

12 months

Home building compensation

If the home building work was not completed, you have 12 months to make a Home Building Compensation claim. 

If the home building work was completed, you have:

• six years from the completion of the work for losses arising from major defects
• two years from the completion of the work for losses arising from defects that are not major defects.

If the loss becomes apparent in the last six months of the time limit, you have another six months to make a claim.

No claim can be made more than 10 years after the building work is completed. 

Six years

Major defect

You have six years to start a case in the NSW Civil and Administrative Tribunal (NCAT) or court for breach of the Home Building Act statutory warranties where the breach results in a major defect in residential building work.

Note: The two and six year statutory warranty period starts from completion of the work, or if the work was not completed:

• on the date the contract is terminated
• if the contract is not terminated - the date the work under the contract ceased, or
• - if the contract is not terminated and the work under the contract was not commenced - the date of the contract.

If the breach of warranty becomes apparent within the last six months of the warranty period, you may apply to NCAT or court within a further six months after the end of the warranty period.

If the residential building work involves the construction of a new building in a strata scheme, the date of completion of the work is usually the date of issue of an occupation certificate for the dwelling.

Three years

To make a consumer claim to the Consumer and Commercial Division in the NSW Civil and Administrative Tribunal from:

• when the goods or services were supplied, or
• the goods or services were meant to be supplied, or 
• in some cases, when you found out about a problem with the goods or services.

The application must also be made within a maximum of 10 years of the goods and services being supplied.

Set aside or vary an order of the NSW Civil and Administrative Tribunal (NCAT)

In the Consumer and Commercial Division of NCAT, you have seven days from when an order was made to apply for it to be set aside or varied.

An order may be set aside or varied if: 

• you and the other party agree, or
• the decision was made without you or the other party being present.

In some situations you may be able to get an extension of this time limit, but you should get legal advice.

If an order was made by NCAT you have 28 days to ask for an internal appeal. You may be told about the decision verbally or in writing. The 28 days starts from the later date that you were told of the decision.

If you are unsuccessful with an internal appeal, you have 28 days to appeal the decision to the Supreme Court of NSW, but you can only appeal on a question of law. This means that you need to show that NCAT made a mistake when applying the law.

Renewal of Proceedings

If a work order has been made by NCAT and it was not followed, you can make what is called a renewal application. This must be made within the time limit noted in the orders. If no time limit was specified, then the application should be made within 12 months of when work was meant to be completed. 

Seven days

Reinstatement application

If you missed a hearing date in NCAT's Consumer and Commercial division, you have seven days from the date of dismissal to apply to have proceedings reinstated. You must have a good reason for not attending. 

 In some situations you may be able to get an extension of this time limit, but you should get legal advice.

Building Commission NSW

The Building Commission NSW is the regulator of the building and construction industry in NSW. 

They can investigate complaints about:

• building, renovation or trade work on residential buildings, and

• specialist trade work on residential and non-residential buildings. 

Authority

Covers

Home Building Act 1989 (NSW)

The Home Building Act regulates home building work in NSW and disputes about home building work. It requires builders and most tradespeople to:

• be licensed
• hold relevant insurance
• give you a written contract for most work.

The Home Building Act allows: 

• the Building Commission NSW to investigate building disputes and make rectification orders 
• the State Insurance Regulatory Authority to regulate insurers 
• NCAT to deal with building claims where the amount claimed is less than $500,000.

Australian Consumer Law (ACL) Schedule 2 of the Competition and Consumer Act 2010 (Cth)

The Competition and Consumer Act 2010 (Cth) outlines consumer protection laws and adopts the Australian Consumer Law (ACL) in Schedule 2 of the Act. The ACL provides some protections for consumers who have problems with home building work.

Building and Construction Industry Security of Payment Act 1999 (NSW) and Building and Construction Industry Security of Payment Regulation 2020 (NSW)

Deals with security of payment laws and applies to all construction contracts in NSW. This Act previously did not apply to residential building work under the Home Building Act 1989 (NSW) where an owner intended to live in the property.

Design and Building Practitioners Act 2020 (NSW)

This Act creates a legislated duty of care to avoid economic loss. The duty of care is owed by builders and others to owners of certain classes of building and to land.

Design and Building Practitioners Regulation 2021 (NSW)

The Regulation defines the classes of buildings to which the Design and Building Practitioners Act 2020 (NSW) applies to.

Common term

Definition

Applicant

A person who applies to the NSW Civil and Administrative Tribunal (NCAT).

Building element

A building element is anything that is likely to have significant impact on the safety and quality of a building, including:

• fire safety systems
• waterproofing
• building structure
• building enclosure
• building services.

It does not include superficial elements, such as:

• interior design
• surveying
• painting
• landscaping.

​Construction work

Residential building work, the preparation of regulated designs, the manufacture or supply of a building product used in building work and the supervising, coordinating, project managing or otherwise having substantive control over the carrying out of construction work.

Contract

A legally binding agreement or promise. Generally, a contract may be oral or in writing, or partly oral and partly written. 

Contracts for home building work over $5,000 must be in writing (this amount increased from $1,000 for contracts entered before 1 March 2015). 

If the home building work is over $20,000 contracts must contain more information than those for 'small jobs' (this amount used to be $5,000 for contracts made before 1 March 2015).

Contractor

A person who performs home building work under a contract.

Consumer

A person that obtains certain goods or services from a supplier who provides them as part of a business.

Cooling off period

A specific time period in which you may cancel a contract, usually with no or limited costs to you. There are requirements that you must follow when cancelling the contract. 

Dwelling (home)

A building or part of a building that is designed, constructed or adapted for residential use. It includes any swimming pool or spa constructed for use with the building.

​Economic loss

​The cost of rectifying building effects and the reasonable costs of necessary alternative accommodation for owners of land.

​Federal jurisdiction problem

​When NCAT can't determine certain applications because the Constitution does not allow it. 

For example, if one party is a permanent resident in NSW and the other party is a resident of a different state, NCAT will not be able to determine the matter.

There is no federal jurisdiction problem if one of the parties is:

• a resident of a territory
• a non-permanent resident of a different state
• living overseas
• a corporation
• a government agency.

Home Building Compensation cover

Insurance that covers losses caused by defective or incomplete work in the event of the death, disappearance or insolvency of the contractor. A policy of insurance for Home Building Compensation must be provided for work over $20,000.

​Home building work

​Work involved in, or involved in co-ordinating or supervising:

• the construction of a building
• making alterations or additions to a building
• repair, renovation or protective treatment of a building. 

Lien

The legal right to keep someone's property as security for the payment of a debt. For example, a mechanic may keep a car until they are paid for repairs to the car.

Major defect

Any defect in a major element of a building that arises from defective design, defective or faulty workmanship, defective materials or failure to comply with the structural performance requirements of the National Construction Code (or any combinations of these) that results, or is likely to result in:

• inability to live in or use the building or part of the building
• the destruction of the building or any part of the building, or
• threat of collapse of the building or any part of the building.

Major element of a building

• Any internal or external load-bearing part of the building that is essential to the stability of the building or any part of it, including things such as foundations, floors, walls, roofs, columns and beams.
• Fire safety system or waterproofing.

National Construction Code

A national code of minimum standards for construction work. The Building Code of Australia and the Plumbers Code of Australia are parts of the National Construction Code.

Owner-builder work

Any work connected to the construction of, or alterations, repairs or additions to a home that costs more than $10,000 or would require development consent from a Local Council.

​Principal contractor

​A person who agrees to do building work under a contract or arrangement and for whom work is to be carried out under the contract or arrangement. 

Progress payment

A part payment that is made upon completion of certain stages of home building work.

​Regulated design

​A design that is:

• prepared for a building element (waterproofing, structural element)
• prepared for a performance solution
• of a class in the regulations. 

​Residential apartment building (class 2 building)

​A residential apartment building, also known as a class 2 building, is a building that has two or more sole-occupancy units that are separate dwellings. It can include:

• multi-unit, multi-storey residential apartments
• a house with a granny flat on a second storey
• two single-storey dwellings that are attached and have a common space below.

Residential building work

(also called home building work)

Any work (including co-ordination and supervision) involved in the construction of a dwelling (home), including alterations, additions, repairs, renovation, decoration or protective treatment. The Home Building Act 1989 (NSW) and Regulation includes and excludes certain work from this definition. 

Respondent

A person or business that has had an application made against them in NCAT.

Roof plumbing work

The Home Building Act 1989 (NSW) defines roof plumbing work as work that involves fixing, installation, renovation, alteration, repair and maintenance of guttering, downpipes, roof flashing and roof coverings on any dwelling (home). 

It does not include work on roof coverings where the roof coverings are non-metallic tiles and slates, or glass, or concrete, or timber and timber products, or thatching, or malthoid, bituminous or similar membrane material.

Scott Schedule

A form used in home building disputes to itemise in detail specific problems with home building work, such as defective or incomplete work. You can obtain a blank form from NSW Civil and Administrative Tribunal (NCAT). Often NCAT will direct you and the other party to itemise the defects and the costs of rectifying them by use of a Scott Schedule.

​Security of payment

​Contractors carrying out construction work or providing goods or services under a construction contract are entitled to receive progress payments to support cash flow.  If there is a dispute over a progress payment a contractor may serve a Payment Claim and, if the owner-occupier does not respond to the Claim, may apply for adjudication of the Payment Claim.

Site

The place where residential building work is done.

Specialist work

Under the Home Building Act 1989 (NSW), 'specialist work' means plumbing work (other than some roof plumbing work), gas fitting work, electrical wiring, drainage work, urban irrigation or certain refrigeration, air-conditioning work, electro technology trades, disconnection and reconnection work.

​Statutory duty of care

​The duty owed by people carrying out ‘construction work’ to owners of land to exercise reasonable care to avoid economic loss caused by defects. 

Warranty

A guarantee or legally binding promise. Some warranties are specified in legislation, such as the Home Building Act 1989 (NSW), or the Australian Consumer Law. These warranties are there to protect consumers and cannot be excluded or limited in any way by a business.

Organisation

Fee

NSW Civil and Administrative Tribunal (NCAT)

Fees at NCAT

If you can't afford to pay the fee, you can apply to for an exemption, reduction or waiver. For more information, see Reduced fees and fee waivers on the NSW Civil and Administrative Tribunal website.

Organisation

Form

Building Commission NSW

Home building complaints form

NSW Civil and Administrative Tribunal

Home building application

Local, District or Supreme Court of NSW

Uniform Civil Procedure Rules (UCPR) forms

Organisation

Type

Costs

NSW Civil and Administrative Tribunal (NCAT) 

Legal costs

The NSW Civil and Administrative Tribunal (NCAT) may make costs orders in some circumstances but it depends on the amount of the dispute. If the amount in dispute is:

• less than $10,000 - each party usually pays their own legal costs. Cost orders are only made where NCAT is satisfied that there are special circumstances.
• $10,000 - $30,000 - NCAT can order costs where there are special circumstances or if a party is conducting proceedings in a way that unreasonably disadvantages any other party
• more than $30,000 - NCAT can make costs orders as it thinks fit.

Local, District and Supreme Court of NSW

Legal costs

You can claim some of your lawyer's costs if you are successful in legal proceedings. If you are unsuccessful, the court may make a costs order against you for some or all the other party's costs.