Changes required to HIA Contracts in NSW
June 25, 2020
Appointment of a certifier
For any NSW residential building works that requires building approval (construction certificate or complying development certificate), the owner is required to appoint a principal certifying authority- be it council or a private certifier. It is not the builder’s responsibility to appoint this body, nor is it the builder’s choice as to who is appointed.
New contract term - Selection of registered certifier
From 1 July 2020 all NSW contracts for residential building work, or specialist work, where a registered certifier will be required with respect to some or all of the work (including variations) must now include the following terms:
- The builder will notify the owner if a registered certifier is required with respect to particular work done under this contract.
The selection of a registered certifier is the sole responsibility of the owner (subject to section 6.6 (4A) or 6.12 (4A) of the Environmental Planning and Assessment Act 1979).
The builder will not object to the selection by the owner of any particular registered certifier.
HIA is currently updating its contracts to comply with the new requirements.
Along with the Consumer Guide to Building, contractors will now also need to provide a further document that explains the role and responsibilities of a registered certifier at the time of entering the building contract. Fair Trading is yet to publish this guide, however once it is HIA will incorporate it into its suite of contracts.
Updated Consumer Checklist
Due to these changes, the consumer checklist will also need to include an item for the owner to check that the choice of certifier is theirs and that the contractor cannot object to such selection.
HIA is seeking these documents (checklist and guide about the role of certifiers) from NSW Fair Trading and will make them available to members as soon as they are published. HIA will also provide details about how to update existing contracts while HIA suite of contracts are being updated for these changes.
From 1 July it will be an offence for a licensed contractor to ‘unduly influence’ the owner’s choice of a certifier and require contracts to include certain terms about the appointment of a private certifier.
When will a contractor “unduly influence” an owner?
A contractor (which includes a builder) is taken to ‘unduly influence’ the owner (or attempt to) if the contractor:
- requires that for a contract to be entered into, the owner must or must not appoint a specific registered certifier;
- offered to change the contract price if a specified registered certifier would be or would not be appointed;
- refuses to carry out work under the contract if a specified registered certifier is or is not appointed
This does not mean that a contractor can’t suggest the appointment of a certain certifier. It just means that the builder cannot automatically appoint that certifier, without the owner’s consent, or pressure the owner to agree to use, or agree not to use a particular certifier.
If you would like more information on this topic please contact your local Workplace advisor on 1300 650 620.