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Law Alert – Residential Building Works

1 March 2021 will mark a significant change in the residential building industry for both builders and home owners in NSW.

After 1 March 2021, pursuant to the Building and Construction Industry Security of Payment Regulation 2020 (NSW), a builder performing residential building works will be permitted to utilise the strict and powerful Security Payments Regime that was previously only applicable to commercial building works.

The Security Payments Regime is a complex area of law that requires experienced advice relating to the resolution and disputes on a building site.

From a builder’s perspective – A builder will now be able to issue Payment Claims under the Security Payment Regime and enjoy a statutory right to payments of an amount claimed in a Payment Claim in circumstances where a home owner does not provide a Payment Schedule disputing the amount within the required timeframe.

From a home owner’s perspective- It is imperative that the strict timeframes be observed and valid Payment Schedules be provided in response to payment claims issued by a builder. Failure to do so will result in a statutory right for payment in favour of the builder which may not be defendable.

In addition, the Adjudication process will also now be available to residential building works disputes with strict time constraints applying to the parties.

Liability limited by a scheme approved under Professional Standards Legislation

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