Residential Building Work Quality (Warranties and Disputes) Bill 2012 (Tas)

The Residential Building Work Quality (Warranties and Disputes) Bill 2012 has been passed by the Tasmanian Parliament. The Bill replaces the Housing Indemnity Act 1992 and is intended to work alongside the Building and Construction Industry Security of Payment Act 2009 and Building Act 2000 to provide a framework for building in Tasmania.

The Bill is based on legislation that has introduced alternative dispute resolution processes that have proven to be successful in other states. Its introduction is the culmination of an ongoing consultation process, which has continued with stakeholders throughout this year to a point where most industry bodies are supportive of the proposals contained in the legislation.

In particular, the investigation revealed a number of gaps in consumer protection for building and renovation work under current laws. Consumers and contractors that find themselves in dispute over the quality of workmanship are left to resolve disputes, which often escalate beyond a point where the matters can be resolved without civil litigation. This can be an expensive process, and the cost of rectifying poor workmanship is born by owners if the contractor refuses to return and the cost of pursuing civil redress is prohibitive. 

Another significant issue that contributes to the cost of building is contracting practices. There may be issues with the type of contract, and misunderstanding the nature and terms in the contract. There may also be problems with the conduct of the parties administering a contract.

Queensland, New South Wales and Western Australia have introduced legislation that deals with the contracting issues and also offers alternative dispute resolution processes. These have proven to be effective in resolving the majority of disputes before they reach a civil court or tribunal. Free template contracts will also be developed and available to both contractors and home owners.

According to the explanatory materials provided, the benefits of the proposed legislation are expected to be:

• fairer statutory warranties;
• less confusion about the contracting processes;
• fairer contracts and contract administration; and
• a ‘one stop shop’ alternative dispute resolution service for both contractors and residential home owners.

With the exception of the Housing Industry Association, which does not support the 'one stop shop' approach, the majority of Tasmanian building representative organisations support the introduction of the legislation. 

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