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What's changing?

The government has announced significant reforms to the Building Act through the Building Amendment Bill, expected to be introduced in early 2026. These changes have not passed into law yet, but will aim to strengthen consumer protections and shift liability in the construction sector.

Key Features of the New Legislation (to date):

• Mandatory Home Warranties: This applies to all new residential buildings up to three storeys and renovations costing $100,000 or more. Coverage includes 1-year defects period and 10-year structural warranty.
• Professional Indemnity Insurance: This is required for building design professionals who do not already have professional indemnity insurance to purchase it )e.g., architects, engineers, surveyors etc.). It ensures they can financially stand behind their work.
• Liability Shift: Moves from joint and several liability to proportionate liability, meaning each party is responsible only for their share of detective work.
• Increased Penalties for Licensed Building Practitioners (LBPs): The maximum fines doubled from $10,000 to $20,000. Additionally, suspension periods extended from 12 months to 24 months.

Who does this affect?

• The Building Amendment Bill is expected to be introduced in early 2026.
• Once passed,there will be a one-year implementation period before the new requirements take effect.

What happens if people do not comply?

• Licensed Building Practitioners face fines up to $20,000 and suspension of license for up to 24 months.
• Failure to provide mandatory warranties or insurance may result in refusal of building consent and disciplinary action.

Concerns and potential issues

• Potential exposure for apartment owners as the proposed bill would only apply to residential buildings three storeys and lower.
• Under the existing "joint and several liability" regime, an apartment owner can pursue Council for the full amount owed in the event of a defect, even if Council only partially culpable.
• Risk that the proposed bill removes home owner's rights to pursue Council for full costs and replacing this right with warranties and professional indemnity insurance that risks not fully covering potential damages.
• Potential for abandonment of damages apartments where owners are unable to seek or claim the cost of repair.

If you would like further information or assistance, please do not hesitate to reach out to the expert team here at Queen City Law. We are here to help.

Disclaimer: This article is general commentary only and is not legal advice. Always seek tailored legal advice before making investment or immigration decisions.

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