Rectification Orders in NSW A Toothless Tiger

By October 18, 2012 Uncategorized No Comments

If you live in NSW and have a building dispute with your builder, you will face difficulties in enforcing a rectification order obtained from the Office of Fair Trading (Fair Trading).

Under the Home Building Act, a rectification order gives rise to very limited rights and obligations. A non-compliant licensee may be subject to disciplinary action from Fair Trading, which is described by the recent Reform of the Home Building Act 1989 Issues Paper (the Paper) as a lengthy and complex disciplinary process. In response to the Paper, various industry bodies including the Master Builders Association, Housing Industry Association and Owners Corporation Network support the implementation of penalty notices for non-compliance of rectification orders, which would put NSW in line with the other states.

In contrast, rectification orders issued in the ACT and Queensland (known as directions to rectify) have penalties attached for non-compliance. In the ACT, if a person intentionally does not comply with a rectification order, the penalty is up to $22,000 for an individual and $110,000 for a corporation. Similarly in Queensland, a licensee who fails to rectify building work as required, is subject to a penalty of up to $27,500.

Furthermore, both the ACT and Queensland provide for someone else to carry out the rectification work in the event the entity ordered to do the work fails to comply with the order.

Currently, in NSW there is no provision for retaining another licensee to complete the rectification work if the licensee does not comply with the rectification order.
Curiously in Victoria, rectification notices are only available against plumbers for defective plumbing work and penalties are attached for non-compliance.
Thus, rectification orders in NSW are not effective, much like a toothless tiger. NSW should ‘strengthen’ its rectification orders and hopefully one of the outcomes of the Paper is such strengthening.

Posted by Chris Kerin / Chanele Mao

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