Fixing the Defects in NSW Defects Laws

Since I'm blogging about defect claims now ... let's do some updating on things to do with defects and defect claims in NSW.

Well, earlier this year in another surprise decision about rights under Home Owners Warranty Insurance the NSW Court of Appeal decided in the case of Ace Woollahra Pty Ltd v The Owners - Strata Plan No 61424 & Anor [2010] NSWCA 101 that only the person who entered a home building contract and their successors in title were entitled to enforce statutory warranties and obtain an insurance benefit. 

This meant that claimants, including subsequent purchasers, had to provide evidence to establish a direct connection with the original contracting party, in order to prove the entitlement and this is not always possible or easy .... for instance, in the Court of Appeal case, the party who entered into the contract (although a joint venture partner of the landowner in the development) was not deemed the landowner.

But in June 2010 the NSW Government has restored home owners' statutory and home warranty insurance entitlements under an amendment to the Home Building Act 1989.

The Hon Virginia Judge, Minister for Fair Trading said “The Government has moved swiftly to remedy what is, in our view, an unfair and onerous burden, particularly on subsequent landowners,” and that “The amendment will restore the operation and intent of the Act to ensure home owners can rely on both statutory warranties and insurance."

The amendment:

• makes it clear that statutory warranties under the Home Building Act 1989 (NSW) extend to a ‘non-contracting owner’ (a person who owns land on which residential building work is done but who is not a party to the building contract, including any subsequent title holders), and
• ensures that insurance policies issued under the Home Building Act 1989 (NSW) also extend to a ‘non-contracting owner’.

The amendments will also apply retroactively, to all contracts made and insurance policies issued since 1 May 1997 (when the schemes were introduced).

Thank goodness at least this important consumer right has not just vanished without some reaction and a solution.  Well done Department of Fair Trading !!!

Francesco ...