Information for Developers

Information for Developers

Under the Home Building Act 1989 an individual, partnership or corporation having residential building work done in connection with an existing or proposed dwelling in a building or residential development where four (4) or more of the existing or proposed dwellings are or will be owned by the individual, partnership or corporation is considered to be a ‘Developer’. 
 
A developer of residential building work also includes the owner of the land where the development is carried out and who owns, or will in future own, four (4) or more of the existing or proposed dwellings. The legislation also provides that if another person or organisation who will also own four (4) or more of the units in the development entered into the building contract for the work, then they are also considered to be the developer.
 
The Act provides that a developer must not enter into a contract for the sale of land on which residential building work has been done (within 6 years of completion of the work), or is to be done, on the developer’s behalf unless a Certificate of Insurance is attached to the contract of sale.
 
Certain circumstances, such as new high-rise construction and sale off-the-plan, may be exempt. Information on such exemptions and any rights of a purchaser to cancel a contract before settlement if the Certificate of Insurance is not attached to the contract of sale, may be obtained from www.fairtrading.nsw.gov.au.
 

Important information for Developers

The Act provides that an insurance policy is not required to cover a developer on whose behalf residential building work is being done. While a purchaser of a property from a developer and the purchaser's successors in title are covered by an insurance policy issued by or on behalf of the hbcf a developer (including a related corporation) is specifically excluded from being a beneficiary under the policy.
 
Developers should seek independent professional advice as to other measures available to them to minimise any loss (including non-completion and defective works) as a result of the death, disappearance or insolvency of the builder they engage. 
 

References on this website to builders and building work include and apply to work undertaken by trade contractors and other building contractors such as electricians, plumbers, carpenters, swimming pool builders etc.