The NSW Government has today restored the rights of home owners to their statutory and home warranty insurance entitlements under an amendment to the Home Building Act 1989.

A Court of Appeal decision in May held 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.

“The Government has moved swiftly to remedy what is, in our view, an unfair and onerous burden, particularly on subsequent landowners,” Ms Judge said.

“The amendment will restore the operation and intent of the Act to ensure home owners can rely on both statutory warranties and insurance.

“Successive title holders will now be entitled to the same legal protections as the person who had originally contracted the home builder.”

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.

“The decision also effectively obliged claimants, including subsequent purchasers, to provide evidence to establish a direct connection with the original contracting party, in order to prove the entitlement,” Ms Judge said.

The amendment:

• makes it clear that statutory warranties under the Act 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) 
• ensures that insurance policies issued under the Act also extend to a ‘non-contracting owner’.

“To protect current homeowners, the amendments will apply retroactively, to all contracts made and insurance policies issued since 1 May 1997 (when the schemes were introduced),” Ms Judge said.

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