Legislative changes 'huge loss' for consumers

July 11, 2014, 9:30 p.m.

New laws to clarify the relationship between builders and home owners have raised concerns among consumer advocates, who say the changes could make it harder to take action over shoddy work.

The changes to the Home Building Act, which regulates builders and contracts for building work, have passed NSW Parliament and will take effect within months.

The changes include a new definition of defective work, a demand for a schedule of progress payments in contracts, and tougher penalties for builders who refuse to rectify shoddy work.

Fair Trading NSW assistant commissioner John Tansey said the reform package was the result of considerable consultation with stakeholders.

"It is trying to particularly look at reducing disputes around issues that arise when they are doing building work, and giving all parties greater clarity about their rights and obligations," he said.

Progress payments, a standard part of most agreements, must now be included in a schedule as part of any building contract.

"Your control over the release of progress payments is one of the main safeguards a consumer has to make sure they are getting what they paid for, and they only hand over money when they have got what they paid for," Mr Tansey said.

"And it's equally important to ensure that consumers know when they will be due to pay builders, because that money is the lifeblood of the builder's project, and their business."

But Michelle Ericoli, a lawyer at the Home Building Advocacy Service, which represents home owners in disputes, had "grave concerns" the reforms reduced options available to people complaining of poor building work.

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Legislative changes 'huge loss' for consumers