The Minns Labor Government has passed the Fair Trading and Building Legislation Amendment Bill, laying the final piece of legislative groundwork needed to bring Decennial Liability Insurance (DLI) to market and give apartment owners protection against the cost of fixing serious building defects.
The Bill reinforces the Minns Labor Government's commitment to building more high-quality homes for people to buy and rent across NSW - homes that are well-built and backed by strong consumer protections.
Passage of the Bill is a crucial step in getting DLI into the market, which will deliver unprecedented consumer protections for owners in apartment buildings.
DLI is an insurance product that will give NSW homeowners strong, reliable coverage against rectification costs arising from serious defects in apartment buildings, like this seen at Mascot Towers and Opal Towers in 2018 and 2019. For the first time in Australia, apartment owners will be backed by an insurance product that guarantees this depth of protection over 10 years. Importantly, DLI stays with the building so even if a developer or builder goes out of business, apartment owners remain protected.
Building Commission NSW will work with various prospective DLI providers to help align their policies with the new legislative requirements and ensure they are fit for purpose.
The passage of the Bill means insurance providers have the confidence they need to seek review and endorsement for their DLI policies so they can be rolled out across NSW.
The passing of the Bill also modernises property laws, closes loopholes and gives the state's property and building regulators more power to take disciplinary action and protect consumers.
Some of the changes passed as part of the Bill include:
- Strengthening NSW's property and construction licensing schemes by giving NSW Fair Trading and Building Commission NSW clearer powers to refuse applications or cancel licences obtained through misrepresentation, error or invalid qualifications.
- Empowering NSW Fair Trading to ensure unsuitable applicants with a history of misconduct are prevented from entering the conveyancing industry, and that dodgy industry players across the property and conveyancing industries are more swiftly removed.
- Providing Building Commission NSW stronger powers to hold private certifiers accountable for misconduct - stopping certifiers from being able to surrender their registration to prevent disciplinary action being taken against them.
With more than 75,000 homes under construction across NSW, these changes could not come at a more important time to keep homebuyers and homeowners safe.
Minister for Better Regulation and Fair Trading & Minister for Building Anoulack Chanthivong said:
"Too many apartment owners have dealt with the stress and uncertainty that comes with major building defects. The Minns Labor Government is changing that.
"Decennial Liability Insurance will be a nation-first, giving homeowners and buyers the peace of mind that if something goes wrong, they won't be left to deal with it alone.
"These new laws mean we have taken a significant step towards DLI being available in the market to better protect consumers.
"This will help unlock housing around NSW, with a range of developers across the state interested in taking up a DLI policy and providing it for prospective owners of the apartments they are building.
"We've also given more teeth to NSW Fair Trading and Building Commission NSW, empowering them to keep certifiers and conveyancers with a bad track record out of the industries they oversee."
NSW Building Commissioner James Sherrard said:
"Building Commission NSW has been working diligently with multiple insurers and the passage of this legislation allows us to undertake the final assessments required so they can hit the market.
"The laws will also provide us with more powers to keep certifiers accountable for their work even if they deliberately leave the industry to escape any potential regulatory action for misconduct."
NSW Fair Trading Commissioner Natasha Mann said:
"Conveyancers play an important role in the state's property sector and help people manage the largest purchase of their life, a home, by managing contracts for sales and purchases.
"The powers now provided to us will help ensure that NSW Fair Trading can keep people with a history of misconduct out of the industry.
"We also have stronger powers to cancel the licences of real estate agents, tow truck operators, pawnbrokers and commercial agents if their qualifications are invalid or they've made misrepresentations to NSW Fair Trading during the assessment process."
