The New Act affecting NSW building industry

Published:31/05/2018

The New Act affecting NSW building industry

The Building Products Safety Act 2017 (NSW)(the "Act") came into operation 18th December 2017. Designed to prevent the use of unsafe building products in New South Wales, the new legislation affects NSW property owners, owners corporations, councils, builders, developers and insurers.


Understanding the Act


(1) NSW Fair Trading may ban the use of a specified building product in a building if they believe the use of this building product is unsafe. A product is classified as unsafe if any occupants of the building are or will likely be at risk of death or serious injury arising from the use of the building product in the building.

(2) If the Department of Fair Trading considers a building product to be unsafe, the Department may by written notice, published on the internet, prohibit the use of a specified building product in a building. This is referred to in the Act as a 'building product use ban'. A building will be classified as an affected building if a product that is the subject of a 'building use ban' has been used in the building for a use that is prohibited by the 'building product use ban'.

(3) If the Department of Fair Trading is satisfied, on reasonable grounds, that a particular building is or may be an affected building, the Secretary may issue an 'affected building notice'. An 'affected building notice' must include the following:


  • the location of the building;
  • the particulars of the building product use ban;and
  • particulars of the safety risk posed by the use of the building product

(4) Heavy Penalties will apply to any person or corporation who does not comply with the new Act

(5) Builders may contravene the product ban use, if they proceed with the installation of, or undertake building work installing the banned product.

(6) A banned product must be listed on the NSW Fair Trading site, as should all building notices, and a register of undertakings.


Risks for builders or contractors


Builders or contractors may be liable for costs, associated damages, and rectification works (including the removal and replacement of banned products) under the following circumstances:


  • the builder/contractor completed the works after 18th December 2017;
  • the works have included a banned building product, which was listed as a banned product as at the date of completion; and
  • the banned product was used in such a way that it poses a significant and reasonable safety risk

We note that the above list is not exhaustive and as such builders/contractors may be held liable in other circumstances.


What about banned products used in works completed prior to 18th December 2017?


The Act specifies that property owners will be required to rectify their building, if an unsafe building product is utilised even if the building was completed prior to the Act coming into effect. This places no obligations or liabilities on the original builder (provided that the builder was not in contravention of the Act at the time). This will not prevent any actions which may be levelled against builders/contractors, or which builders/contractors may be drawn in to.


Further Information


For up to date current notices for building product use bans, as well as the register of undertakings you can visit:

http://www.fairtrading.nsw.gov.au/ftw/Businesses/Product_safety/Building_products.page


How Coverforce can help?


To get sound risk advice and quality cover for your Building and Construction business, contact your local Coverforce Insurance Broker today.


References


http://kreisson.com.au/new-law-banning-unsafe-building-products-nsw-started-18-december-2017/






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