New South Wales Consolidated Acts

HOME BUILDING ACT 1989 - SECT 96

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.

: Maximum penalty--1,000 penalty units in the case of a corporation and 200 penalty units in any other case.

(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 approved by the Authority, is attached to the contract of sale.

: Maximum penalty--1,000 penalty units in the case of a corporation and 200 penalty units in any other case.

(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 Authority, 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.

Note : Part 6B (see section 104B) provides that the requirement to obtain insurance under this section may be met by obtaining coverage through an alternative indemnity product.

(3) This section does not apply--

(a) to a person who does owner-builder work (whether as the holder of an owner-builder permit or for the holder of such a permit), 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) if 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.

(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 evidencing a contract of insurance that complies with this Act in relation to the residential building work before entering the contract concerned, and

(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 approved by the Authority, evidencing that contract of insurance.

(4) A contract of insurance that is in force in compliance with this section in relation to residential building work (the
"original work" ) done by a person extends to any residential building work done by the person by way of rectification of the original work.

Note : Accordingly, this section does not require a separate contract of insurance in relation to the rectification work.