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Articles and legal news from the Atkinson Vinden Team.

Changes to the Home Building Act

Property Law

Developers and builders should be aware of changes to the Home Building Act by way of the Home Building Amendment Act 2011 which makes wide-ranging changes to the Home Warranty Insurance, Statutory Warranties and Contract requirements.  The changes mean that a land owner who develops land through a joint venture arrangement will now be considered to be a developer and therefore liable under the statutory warranty provisions in the Home Building Act 1989.  This change is effective as of 23 October 2011 and applies to both current and future Contracts.  Developers and builders have also been prohibited from relying on Part 4 of the Civil Liability Act 2002 to apportion their liability to other parties; and this change commenced on 23 October last year as well.  It also applies to both current and future Contracts.

The maximum duration of developers’ and builders’ liability for breaches of statutory warranties has been reduced from 7 years to 6 years post practical completion but this change will apply only to new Contracts entered from 1 February 2012.  All policies issued after 1 February 2012 will have a minimum cover of $340,000.00 regardless of the value of the work.

Therefore developers and builders should take care that their insurance cover is appropriate and of course purchasers can, to some extent, be confident that there will be a party to pursue should there be building issues after the purchase is completed.

If you have any queries, please contact any member of our Property Team.