Residential Building Cover Package

The full details of the package are outlined in the following documents:

On 23 November 2011, the Territory Government introduced in the Legislative Assembly the two Bills to amend the Building Act, and tabled a consultation draft of Regulations for Bill 1, and an outline document of possible regulations for Bill 2. Both Bills form a package that provides for consumer protection in the residential building market. In addition to the two Bills, a consumer guide has been developed, which will be published at the beginning of December 2011 on the Building Advisory Services homepage.

Key elements of Bill 1 titled ‘Building Amendment (Registration and other matters) Bill 2011’ include:

a strengthening of the existing financial requirements for registration;
legislative provision for the Regulations to prescribe requirements for progress payments; and,
‘housekeeping’ matters.

Key elements of the consultation draft of amendments to the Building Regulations titled ‘Building Amendment (Financial Assets, Residential Building Contracts and Other Matters) Regulations 2012’ include:

Requirement for $50,000 as the financial assets for registration as a building contractor (must be maintained during the period of registration); and,
Residential building contracts must specify the percentage of work payable on completion of each stage of building work and both the description of the stages, and the percentage for each stage is prescribed, unless parties agree to vary the stages in the approved form.

Key elements of Bill 2 titled ‘Building Amendment (Residential Building Consumer Protection) Bill 2011’ include:

mandatory, last resort, residential building cover (insurance or insurance like cover);
consumer guarantees; and
a dispute resolution process (may be accessed where no residential building cover trigger has occurred)

The residential building cover is a reference to Residential Building Insurance or cover through a fidelity fund scheme and will be required in place of the Home Building Certification Fund cover. The HBCF will be wound up on commencement of this Bill.

The Bills are to commence at separate stages. It is proposed that Bill 1 could commence in the near future, and Bill 2 could commence when residential building cover providers are able to offer the products.

The package is most relevant to both consumers and registered builders who participate in the residential building market. The package was developed after consultation with the wider community and industry from 2009 which was managed by the Building Industry Representative Group (BIRG).

As referred to in the following handout document Handout - Residential Building Cover Package a standards and tolerances guide may be developed to assist in the resolution of disputes about what is considered ‘workmanlike’ building work. Victoria has published such a document, which may be accessed at the Victorian Building Commission website through the following link: Victorian Standards and Tolerances Guide (2007)

Housing Industry Association (HIA) also produce a guide to materials and workmanship for residential building work. The guide is offered for sale through HIA, and accordingly a link may not be provided. For further information about the guide, it is suggested that HIA be contacted directly.

It is proposed that any guide developed for the Northern Territory could be modelled on those or similar documents, in consultation with industry and consumers, and having regard to the Northern Territory environment.

What happens next?

The Bills were passed in the Legislative Assembly on 27 March 2012. The Residential Building Cover package will be commenced on 1 January 2013.

Further Information

If you require further information please call Building Advisory Services Branch on 8999 8961.