General FAQs

    How can I have a say in these reforms?

    The Department of Customer Service would love to hear your insights and feedback on the proposed reforms. There are three ways you can have a say: 

    1. Survey 
      You can respond to the surveys contained on each of the topic area webpages. You can also respond to the all-in-one survey on the consultation homepage, which combines all the questions from each of the topic areas.  

    1. Submission 
      You can click the “submission” tab on the consultation homepageand complete a submission form. This option is designed for anyone who wants to provide detailed feedback, or if you would like to respond to the questions contained in Regulatory Impact Statements. You can also email us directly at hbareview@customerservice.nsw.gov.au, or send us your submission by mail to: 
      Policy and Strategy, Better Regulation Division 
      Locked Bag 2906 
      LISAROW NSW 2252   

    1. Attend an online Q&A session 
      You can participate in our Q&A information sessions online. We will regularly update details for each session on the consultation homepage. 

    Will my feedback make a difference?

    Yes, once the consultation has closed, the Department of Customer Service will review all of the feedback and consider if any changes are necessary. Your feedback will ensure that the reforms are fit-for-purpose and make a meaningful difference in the building and construction industry. 

    We will publish the outcomes of consultation on the consultation home page, outlining the feedback received and explaining the rationale for any key changes from the proposals.  

    The changes I have been asking for are not reflected in these reforms

    The NSW Government has a lot of planned reforms in the pipeline. The building and construction reforms are part of the 2020-25 Construct NSW transformation strategy 

    The reform agenda has been significant over the last few years and continues to be. Reforms are timed to meet market needs and respond to emerging issues, and it is important that significant consultation is undertaken to develop and refine each proposal. We want to make sure that the reforms are effective and fit-for-purpose. However, we are always interested in hearing ongoing feedback from stakeholders. 

    For any topics that fall outside of these reforms, please submit your feedback via our Fair Trading website.   

    Why is the Department of Customer Service proposing to change Building Laws?

    In January 2020, the NSW Government announced its six-pillar Construct NSW transformation strategy to restore public confidence and create a customer-facing building and construction sector by 2025. A central theme of these building reforms is the making of strong and safe buildings and improving customer protections. 

    The government has implemented significant reforms under Construct NSW, focused on creating clear lines of accountability when practitioners deliver substandard work.  

    The Department of Customer Service is consulting on the next stage of reforms, which seek to strengthen consumer protections and enforcement powers, ensure trade practitioners are suitably skilled to carry out their work, and all people are held accountable for the supply of safe building products and building work. 


    How have the proposed reforms been designed?

    The proposed reforms are a product of ongoing research, co-design and consultation over an 18-month period. The Department of Customer Service (the Department) has adopted a co-design approach through targeted engagement with peak industry and consumer representative bodies, NSW Government agencies, local councils and other jurisdictions.  

    As part of this processthe Department has held seven industry roundtables, two focus groups, four written submission processes, one public survey and has regularly engaged with regulation working group and surveyed practitioners onsite. Over 100 organisations across the industry have been represented.  

    This consultation is the next phase of the co-design process. Your thoughts and feedback will help inform our next steps as we continue to shape policy to reform the building and construction industry in NSW. 


    What are the proposed Bills and Regulations in this consultation?

    The Department of Customer Service is undertaking a wide range of reforms for various aspects of the building and construction sector in NSW. This consultation includes the following proposed Bills and Regulations: 

    The Building Bill 2022 is intended to ensure best practice regulation of all building work in NSW to ensure that individuals doing building work are competent and licensedconsumers are adequately protected and building quality is up to standardthus complementing and supporting the broader building framework. 

    The Building Compliance and Enforcement Bill 2022 is intended to modernise and consolidate the regulatory compliance and enforcement powers for the building and construction industry in NSW. 

    The Building and Construction Legislation Amendment Bill 2022and the Building and Construction Legislation Amendment Regulation 2022 will amend existing Acts to strengthen the legislation supporting the building and construction industry in NSW. 

    What are the key features of the Building Bill 2022?

    The Building Bill will replace the Home Building Act 1989 (HB Act) following a review of the HB Act and is driven by stakeholder concerns that the current framework for residential building work has not kept up with industry practices.  

    The purpose of the Building Bill is to create end-to-end accountability for building work in NSW and seeks to consolidate and regulate several key elements of the building and construction industry. These include:  

    • key changes to what building work is intended to be regulated and who should be licensed, including: 

    • expanding licensing requirements to cover trades operating in the commercial building sector 

    • restricting the work an unlicensed person can do under the owner-builder permit system 

    • making it a requirement for all licence holders to supervise the work of unlicensed people in accordance with gazetted practice standards 

    • expanding the definition of ‘developer’ to better cover those who should be responsible for contractual, statutory warranty and insurance obligations, and ensuring a definition that is consistent and fit-for-purpose for commercial developers. 

    • the approval process for building work by: 

    • bringing all certificates that come after development consent through the planning system into the building system 

    • introducing a new regulatory scheme for pre-fabricated and manufactured housing. 

    • consolidating all fire safety requirements for building work, from the design stage, through installation and certification and to maintenance and annual audits, under a single Bill to improve fire safety  

    • key consumer protections including: 

    • clarifying contract processes for residential building work around variations and payment processes. This includes prescribing when payments can be claimed in relation to major work contracts  

    • revising the statutory warranty scheme and the definition of ‘major defect’ for residential building work 

    • enhancing the dispute resolution model for residential building work to provide a more time and cost-effective way to resolve disputes between licence holders and residential customers 

    • extending consumer protection obligations to manufacturers of offsite construction and pre-fabricated buildings. 

    What are the key features of the Building Compliance and Enforcement Bill 2022?

    The Building Compliance and Enforcement Bill 2022 (BCE Bill) intends to improve the building and construction industry's regulatory framework and provide essential supporting compliance and enforcement powers. 

    The powers in the BCE Bill will have flexibility to enable a proactive regulatory approach to be taken as well as applying a holistic approach for building matters. This will allow better allocation of resources and targeting of risk to ensure the best outcome for consumers by focussing on non-compliant and incompetent industry players. 

    The BCE Bill will replace the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act) while retaining the powers given to the NSW Building Commissioner under the RAB Act to deal with non-compliant developers and serious defects in buildings. The powers to order the rectification of building work will be expanded to all classes of building where a serious defect may exist as well as the power to prohibit the issuing of an occupation certificate. 

    The BCE Bill also includes general powers appropriate to a building regulator as well as nuanced powers as required, such as for security of payments of sub-contractors and the obligations of owners corporations to maintain common property. 

    Key features of the BCBill include: 

    • consolidated and strengthened investigation, information gathering, and on-site powers 

    • remedial actions including undertakings, stop work orders, and injunctive powers

    • compliance order and building work rectification order powers

    • disciplinary action process for licence holders

    • demerit points scheme

    • increased penalty offences for serious matters

    • continuation and expansion of the developer notification scheme and complimentary prohibition order powers. 

    What are the key features of the Building and Construction Legislation Amendment Bill 2022 and Regulation?

    The Building and Construction Legislation Amendment Bill 2022 (Amendment Bill) and Building and Construction Legislation Amendment Regulation 2022 (Amendment Regulation) are part of the NSW Government’s reform agenda to restore confidence in the NSW construction sector and improve the effectiveness of compliance and enforcement systems for the building and construction industry in NSW.   

    Key features of the Amendment Bill include: 

    • introducing new duties on persons in the building supply chain and additional Secretary powers around the supply of building products in the Building Product (Safety) Act 2017 

    • making changes to the Strata Schemes Management Act 2015 to ensure inspectors are empowered to identify and rectify defects throughout the inspection process and developers are required to pay the building bond to rectify defects 

    • strengthening the adjudication processes for building work payment claim disputes within the Building and Construction Industry Security of Payment Act 1999 

    • allowing certifier bodies that operate a professional standard scheme to play a role in the accreditation of certifiers under the Building and Certifiers Development Act 2018 

    • making amendments to the Environmental Planning and Assessment Act 1979 to create clearer responsibilities for certifiers that will reduce the need to use powers under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020

    • creating a cost-recovery mechanism for compliance and investigation work related to building work. 

    Key features of the Amendment Regulation include: 

    • supporting changes made in the Amendment Bill for the Strata Schemes Management Act 2015 

    • requiring more projects to retain money in trust in the Building and Construction Industry Security of Payment Act 1999 to provide surety of payment for those carrying out building work. 

    When will the reforms commence?

    The Department of Customer Service proposes to bring the various building reforms into effect in phases to allow relevant stakeholders to be adequately prepared for the changes and to help support the industry prepare for the changes. 

    It is projected that the proposed Bills will be introduced in Parliament in 2023The Regulation will need to be approved by the Minister and presented to the Executive Council for approval by the Governor. This is expected to be in 2023.  

    The commencement date of the Bills and Regulations may be on assent, by proclamation or on publication. Once passed by both Houses of the Parliament, Bill will receive formal approval (or assent). ThAct will commence on this day or be the trigger for the date of commencement (for example, 3 months from this date)Commencement by proclamation will allow the NSW Government to delay the operation of the Act until administrative or legislative arrangements have been made. Commencement on publication will be when the Regulation has been published on the NSW legislation website. 

    Building and Construction Legislation Amendment Bill 2022 and the Building and Construction Legislation Amendment Regulation 2022 (on assent) 

    While the Building and Construction Legislation Amendment Bill 2022 (Amendment Bill) and Building and Construction Legislation Amendment Regulation 2022 (Amendment Regulation) will come into effect on assent of the Amendment Bill, some of the reforms will have extended commencement dates 

    The proposed timeframes for the commencement of different reforms in the Amendment Bill and Regulation are as follows:  

    Timeframe 

    Reform(s) 

    On the day of assent of Amendment Bill 

    • Amendments to penalise people for falsely representing themselves as building inspectors and making the requirements for Authorised Professional Associations and building inspectors more transparent  

    • Amendments enabling inspectors to impose an order to undertake a training or education course 

    • Amendments relating to investigation cost recovery and corporate self-incrimination 

    • Amendment to allow certifier to require rectification of defects 

    • Amendment recognised competency assessments from associations operating with a Professional Standards Scheme for registering certifiers 

    • Amendment to allow rectification of defects for noncompliance with the Plumbing Code of Australia 

    3 months from assent 

    • Amendment to allow dispute resolution for strata building work 

    • Amendments relating to intentional phoenixing activity 

    6 months from assent 

    • Amendments to expand the use of the building bond for defects identified in the final inspection 

    • Amendments to security of payment claims, retention trust requirements, adjudication review and powers of adjudicators 

    12 months from assent 

    • Amendments to impose responsibilities in the building product supply chain, to ensure products are compliant and fit for their intended purpose 

    On proclamation 

    • Amendments relating to continuing professional development obligations


    Building Bill 2022 (on proclamation)  

    The Building Bill 2022 will commence on proclamation. The Department expects to conduct comprehensive consultation throughout 2022 and 2023 to develop the Regulation/s, which would commence at the same time as the Building Bill. Timing for commencement will be considered as Regulation/s are developed to ensure industry and consumers have sufficient time to prepare for the reforms.   

    Some provisions within the Building Bill 2022 will have an extended commencement period, e.g. provisions relating to the new licensing scheme will come into effect over a period of 2 to 5 years, allowing those impacted by the changes to make adequate arrangements while minimising any impact on businesses.  


    Building Compliance and Enforcement Bill 2022 (on proclamation)   

    Building Compliance and Enforcement Bill 2022 will commence on proclamation at the same time the Building Bill 2022.

FAQs on building product safety

    Will I need to have insurance to protect me against building products that may be non-conforming in the future?

    Under the Design and Building Practitioners Act 2020, any person who carries out construction work already has a duty to exercise reasonable care to avoid defects. The duty of care also applies to manufacturers or suppliers of building products used for building work.

    Builders, developers, tradespeople and owner-builders undertaking residential building work, also have obligations under the statutory warranty scheme for the work they conduct and materials they supply during the course of a construction arrangement.

    Although persons in the chain may not be legally required to hold insurance, they all have ongoing obligations and duties in relation to building products they design, use or supply.


    How will the new laws affect me as a homeowner?

    The new laws aim to eliminate the use of unsafe building products by imposing responsibilities on those involved at the earliest stages of a typical building supply chain. This will help provide greater safety and certainty for homeowners and save money by preventing costly rectification works.

    Homeowners can assist by taking the following steps to reduce the likelihood of non-conforming building products being installed in your home.

    • If your project requires designs, including work covered by the Design and Building Practitioners Act 2020, ensure that your designer is insured and provides you and your builder clear information on what products must be used to ensure their designs comply with the National Construction Code.
    • Choose a tradesperson that is licensed and insured and understands they are legally required to use building products that comply with the standards under the National Construction Code.
    • Choose the right building products for the job. If you are purchasing building products make sure you check the information with a licensed tradesperson. If your builder is supplying the product, check with them that the product meets the required standards. Check that plumbing products have the relevant WaterMark certification.


    How do you prove that a product is certified or complies with the National Construction Code?

    There are six different types of substantiation or evidence to verify that a product conforms and/or complies with the National Construction Code:

    • CodeMark or WaterMark Certificate of Conformity
    • Certificate of Accreditation from a State and Territory Accreditation authority
    • certificate from an appropriately qualified person such as a professional engineer 
    • certificate from a product certification body accredited by the Joint Accreditation System of Australia and New Zealand (JAS-ANZ)
    • report issued by a registered testing authority or
    • other documentary evidence such as a certificate through an industry scheme.

    When will these reforms commence?

    If passed by Parliament, it is proposed that these changes will commence in 2024.


    Why are these reforms necessary?

    Non-conforming building products pose a significant risk to health and life safety, as their use threatens the integrity of a building, putting all those who enter and use the building or building site potentially at risk. The use of non-conforming building products within a building can also impose significant costs on owners to rectify damages or undertake remedial actions. 

    Two recent national examples have highlighted this issue: the Melbourne Lacrosse Tower fire in 2014 and the recall of Infinity and Olsent-branded cables in 2015, both of which had the potential to cause loss of life or serious injury. A contributing cause to the rapid vertical spread of fire at the Lacrosse Tower was the combustible external aluminium wall cladding on the side of the building. The Infinity and Olsent-branded cables were found to have poor quality insulation (plastic coating) which degrades at a faster rate and therefore fails to meet electrical safety standards. While fortunately there was no loss of life in the Lacrosse Tower fire, Infinity cables continue to pose risks.


    There are a lot of fraudulent certificates provided for building products especially from overseas. How is the builder meant to know what is real?

    There may be circumstances where fraudulent documentation is provided with a product that makes a false claim that a product’s performance meets specific standards or codes or has been tested and meets specific requirements when it doesn’t. This may include fraudulent certification or test results.

    All people in the chain of responsibility must satisfy themselves as far as reasonably practicable that the product is not a non-conforming building product. If you are concerned that you have received a fraudulent certificate you need to take steps to verify the accuracy of the certificate. If in doubt, find a more reputable supplier as you may be liable for the product’s non-compliance if you have not taken reasonably practicable steps to ensure the product is not a non-conforming product. 

    A person or corporation providing false or misleading information will be guilty of an offence and can incur a penalty of up to $165,000 for a corporation and $55,000 for an individual.

    The NSW Government is developing a Building Trustworthiness Indicator (a blockchain based product that provides a ledger of inputs of a building) that will bring together the products and design certificates of compliance for each building. This tool will show what products were used, who made them, what testing certifications are held and, who installed and certified building work. So, the quality for the certification process can be assessed at the point that that information is uploaded into the tool. It is expected that this will provide more confidence in the accreditation and certification process to that point. Further information on the Building Assurance Solution is available on NSW Building Commissioner website.




    What is a non-conforming building product?

    A non-conforming building product is a building product and material that:

    • does not, or will not, comply with the National Construction Code or relevant regulatory provisions or instruments, or
    • the product has incorrectly been represented by a person in the chain of responsibility about its quality, features, capability, performance or compliance (see the below paragraph under Who will be responsible for ensuring building products are compliant? for information on the chain of responsibility); or
    • the intended use of the product is unsuitable or does not comply with the National Construction Code or relevant regulatory provisions or instruments.

    An example of this is a building product that is labelled or described as being non-combustible but which is actually combustible is a non-conforming building product.

    A building product that is combustible, and described as such, but is used in a situation where a non-combustible product is required under the National Construction Code, is not suitable and is also a non-conforming building product.


    What happens if a manufacturer does not provide the information for a building product?

    It is a duty of all persons in the supply chain to provide information about the building product to other persons in the chain. Failure to do so may incur a penalty of up to $165,000 for a corporation and $55,000 for an individual. If you have not been given information by a person that supplies you with a product you must immediately seek out that information before supplying the product onto another person.


    How will the substitution of products be managed?

    Product substitution occurs when a product is submitted for third party certification testing and after the certification is granted, the manufacturer or supplier alters it and does not retest or recertify the product. Product substitution is also when a seemingly identical (and potentially non-conforming) replacement building product is offered or provided.

    Substituting products that have not been tested or comply to codes or standards may be risky and lead to product failure and reduced performance of the building. It may also lead to high rectification costs, penalties or legal action.

    It is the responsibility of a person that sells, supplies or otherwise transfers the product to another person, or facilitates the sale, supply or transfer of the product to another person to ensure the products are safe and comply with the National Construction Code or any laws or instruments that apply to the product.

    There are also counterfeit building products in the market which are an unauthorised copy of a building product, often created with the intention to deceive. They are sold to suppliers, builders and even consumers as if the product was genuine.

    Persons are not to make incorrect statements, whether intentionally or not, about a products quality, feature, capability, compliance or performance. Providing non-conforming products or false or misleading information will be an offence and can incur a penalty of up to $165,000 for a corporation and $55,000 for an individual.

    For those undertaking building work under the Design and Building Practitioners Act 2020, where a regulated design prescribes the use of a certain product it cannot be substituted by the builder without a variation to the regulated design that has been prepared and declared by a registered design practitioner.

    What happens if I become aware of a non-conforming building product?

    All suspected non-conforming building products or products that cause a safety risk should be reported to Fair Trading within seven days by completing an online form that will be available on the Fair Trading website (if the proposed changes are passed by Parliament, it is expected the form will be available in 2024).

     

    As a builder what information do I need to provide to the owner of the building?

    The builder will be required to provide certain information to the owner in relation to the building products they have used. For example, information related to the maintenance required to ensure the product continues to perform or operates as intended. 

    The information that is required to be given or made available to the owner will be prescribed in the Regulation. Further work and consultation will be required in developing the supporting Regulation which will occur after the Bill passes through Parliament.

    This consultation will ensure that building owners and occupiers have sufficient information to properly maintain the building without imposing an undue burden on builders with respect to the information they must pass on. 


    What will be my new responsibilities if I am a builder?

    Before a product or material is used, the builder, installer or other specialist tradespeople installing or building with products and materials should be satisfied that the product is not a non-conforming product. 

    The builder must ensure that the product or material meets relevant standards for its intended use under the National Construction Code or other relevant standards and will be installed consistent with the limitations specified in the information provided by others in the supply chain.

    There is also a requirement for the person installing a product to provide certain information to the owner on completion of the building work, including that they have used products that comply with the relevant standards and building approval and any information necessary to ensure proper maintenance of the product.


    Can a person rely on the information given by another in the supply chain?

    When provided a document or information from another person in the chain of responsibility, a person must satisfy themselves as far as reasonably practicable that the product is not a non-conforming building product.

    Reasonably practicable means reasonably able to be done by the person in relation to the duty at a particular time, taking into account all relevant matters.

    For example, the person would need to consider and weigh up all information made available about the product. The manufacturer’s instructions or a product statement describing its use and a statement that the product conforms to the National Construction Code (as the product has a CodeMark or WaterMark Certificate of Conformity) would satisfy this requirement.


    What information should be supplied or made available about a product?

    All building products need to have information accompanying them or made easily available to help the next person in the supply chain decide whether the product is suitable for its intended use. This could be information (depending on the product) that demonstrates or outlines:

    • the suitability of the product for its intended use. 
    • how the product legitimately meets the relevant Australian Standards for that use
    • the conditions and circumstances in which the product can be safely used, for example, in internal areas or not above certain heights
    • how the product should be installed, for example, the type of fastener, adhesive or mounting system to ensure National Construction Code compliance
    • how the product must be used to remain compliant with the National Construction Code
    • how the product should be maintained to ensure it performs and operates correctly and as intended.

    It will be illegal to supply a building product with labelling, packaging or promotional material which makes untrue or misleading claims about the building product and how its intended use meets the relevant building standards. If you do this, you may be liable for misleading or false advertising and any defective work that is caused because of the misleading information you have provided.


    How will the new laws be enforced?

    When Fair Trading is made aware of a potential non-conforming building product, they will undertake a preliminary assessment of the risk and extent of use of the product.

    Authorised officers may consider obtaining samples, seizing products, conduct testing or request the manufacturer carry out a product assessment.

    A building product direction may be issued by the Secretary requiring a person to cease using or supplying the product generally or in a specific way or to make the product incapable of being used or operated.

    Fair Trading may conduct an investigation to determine who in the supply chain has contravened their duty. It is possible for more than one person in the supply chain to have the same duty concurrently.

    Fair Trading will assess whether it is necessary to require remedial action, to take disciplinary action or to prosecute for offences.

    Where there is a high degree of seriousness, the Secretary may take further action by issuing a warning statement, building product supply ban or a recall notice.


    What happens when a product is compliant at the time of installation but later becomes non-compliant?

    There may be instances where a product was compliant at the time of installation but becomes a non-conforming building product. This may be due to a product that is recalled or banned due to safety risks or changes made to Australian Standards over time.

    If a building product met relevant requirements at the time it was installed (for example, complied with the Australian Standard that was published at that time) it would not breach the building product safety framework. This does not mean that the builder does not have other obligations under other legislation.

    If a product is recalled or banned, manufacturers and suppliers should consider if any of their products are affected and provide appropriate information and actions to be taken to purchasers and potential purchases. Builders who may be using or installing the banned or recalled product should contact the supplier or manufacturer to confirm if the product is banned or recalled. If it is, the builder should stop using the product and discuss options with the principal contractor, developer or other relevant party.


    Do the reforms apply to all building products?

    The reforms will apply to all products, materials or other things that could be incorporated into, connected to or otherwise installed in a building by the way of building work. It does not include asbestos or asbestos products.

    Building work means construction, alterations or addition to a building or the repairs, renovations, decoration or protective treatment of a building.

    Examples of regulated building products include timber, windows, doors, electrical and plumbing components but would not include items such as gas or electrical appliances such as stoves (these are regulated under separate legislation). 


    How is a person in the supply chain expected to know the ‘intended use’ of a product?

    If a person intends for a building product to be used for a particular purpose, they must be satisfied that the building product is not a non-conforming building product for that particular purpose.

    This could mean that they must satisfy themselves that their product is compliant with each applicable standard called up by the National Construction Code.

    The information that is made available or provided with the product should represent the uses of the product. If the product can be used for a number of purposes, information should be given for the ways that the product can be used in a compliant and conforming way, including uses that would not comply or conform.


    Will a certifier be a part of the supply chain?

    Building certifiers will not form part of the supply chain as they cannot be expected to detect all non-conforming building products. Although a certifier may rely on the information or representations from suppliers, manufacturers or importers about the suitability of building products to ensure they have been used for the intended purpose.

    What will my new responsibilities be if I am an architect or building designer?

    Persons involved in the design or writing any plans or specifications for a building must ensure that any products, materials or systems specified or approved for use in their designs are appropriately approved, fit for purpose, and meet the performance requirements relevant to their use. This may mean seeking out additional information to satisfy yourself that the product satisfied these requirements.




    What happens if there is no existing standard that a particular building product needs to meet?

    Given the rate of building product innovation, it is difficult to maintain a suite of standards against which all products can be tested and/or certified. Where products that have no appropriate standard to be tested against, the product may need to be reviewed by appropriately accredited product certification bodies to determine if the product has met the requirement of regulatory performance through other means.

    Conformity assessment schemes establish an independent process for the assessment of products to enable the issuing of a certificate of conformity. Conformity assessment schemes that are based on internationally recognised standards such as ISO/IEC 17065 and 17025 and such certificates can be relied on by designers and builders provided that the use of the product meets any conditions or limitations set out in the certificate.



    Have you considered that the scheme may have the effect of seeing a decline in the number of new products entering the market?

    The obligation to use building products that comply with the National Construction Code is not a new obligation – design and building practitioners should already be ensuring that the products they are using are compliant and conforming. 

    It will be up to the manufacturers or suppliers of new products to ensure that the products are conforming to the National Construction Code or applicable standards or laws. If manufacturers provide the relevant information and assurance that the products are conforming and suitable for a use then there should be no additional work than what would normally have been required in ensuring the product is suitable for the intended purpose.


    How will I know if a warning has been issued for a building product?

    The powers to publish a building product warning is designed to raise public awareness of a non-conforming building product. If the Secretary believes that a building product is a non-conforming building product or the building product has been used in a building which may pose a safety risk, the Secretary may issue a Building Product Warning. 

    The warning notice will be published on the internet to make the public aware of the risks associated with using a particular building product. Persons in the chain of responsibility will need to aware of published warnings and be cautious or refrain from using or supplying these products.

    A notification system that persons can subscribe to, to alert them of a product warning notice, bans or recalls, will be developed in the future.



    What happens when a building product is recalled?

    A building product recall notice may be issued to remove a non-conforming building product from the market. These powers are intended to protect industry, workers, consumers, building residents and the community. 

    It is expected that the Secretary’s powers to issue a recall will not be used routinely or often and will be limited to certain instances for non-conforming building products or where there is a safety risk arising from the use of a non-conforming building product in a building.

    The Secretary will be required to give notice to the manufacturer (or Australian importer or supplier), if practicable, two days before the supply ban is published on the internet. 

    The Secretary may also call for public submissions before or after imposing the recall to determine if the recall is warranted and the terms (or proposed) terms of the recall.

    A recall will be in place for two years from the date it comes into force unless it is revoked by the Secretary earlier.

    Where a recall is issued, the manufacturer will be required to notify other persons in the chain of responsibility and provide evidence to the Secretary that this action has been carried out. 

    The recall notice may also impose obligations on other persons in the chain of responsibility. For example, builders may be required to notify owners if the product has been used in the construction of their building or an architect or engineer may be required to amend a design or specify an alternative building product instead of the product that has been recalled.

    Heavy penalties can be imposed on persons that use or supply a building product that is the subject of a recall notice. It will be essential for persons in the chain of responsibility to be aware of any building products that are subject to a recall notice and refrain from using or supplying these products.


    What will I need to do if a building product is subject to a supply ban?

    A building product supply ban may be issued by the Secretary to prohibit the supply of a non-conforming building product where there is no safe use for the product or where there is a misrepresentation about its suitable use.

    The Secretary will be required to give notice to the manufacturer (or Australian importer or supplier), if practicable, two days before the supply ban is published on the internet. 

    To ensure fairness, the Secretary may also call for public submissions before or after imposing the supply ban to determine if the ban is warranted and the terms (or proposed terms) of the ban.

    A building product supply ban may require a person in the chain of responsibility that has possession or control of the product to dispose of the product and within a period specified in the ban and notify the Secretary. A ban will be in place for two years from the date it comes into force unless it is revoked by the Secretary earlier.

    Heavy penalties can be imposed on persons that use or supply a building product that is subject of a supply ban. It will be essential for persons in the chain of responsibility to be aware of any building products that are subject to a building supply ban and refrain from using or supplying these products.


    Does the chain of responsibility capture developers, homeowners and/or testing authorities?

    These classes of persons are not captured in the supply chain and therefore do not have any prescribed responsibilities. Although these classes may have influences on the products selected, it will be the responsibility of the designer and builder to ensure the products are compliant and suitable for the use. 

    If you are an owner-builder undertaking residential building work, then you will be captured as part of the supply chain.

    This is still an open discussion and may be changed based on feedback received through public consultation process.


    Who will be responsible for ensuring building products are compliant?

    The proposed new requirements will mean that everyone in the supply chain including the designers, manufacturers, importers and suppliers of a building product, has a responsibility to ensure the building product is safe and compliant for its intended use. Company directors will also be held responsible as part of the supply, where applicable.

    Non-conforming products are often costly to rectify and are often difficult to replace once they have been installed. These costs currently are falling on the builder, the installer, the building owner or the strata title community. 

    By imposing duties on all persons in the building product supply chain the responsibilities are shared across all participants in the supply chain.


    How is a person in the supply chain expected to know the ‘intended use’ of a product?

    If a person intends for a building product to be used for a particular purpose, they must be satisfied that the building product is not a non-conforming building product for that particular purpose.

    This could mean that they must satisfy themselves that their product is compliant with each applicable standard called up by the National Construction Code.

    The information that is made available or provided with the product should represent the uses of the product. If the product can be used for a number of purposes, information should be given for the ways that the product can be used in a compliant and conforming way, including uses that would not comply or conform.


    What can you tell me about proposed building product safety changes?

FAQs on potential effects of proposed reforms

    Summary and Q&A recordings

    These Frequently Asked Questions have been compiled from questions that people have asked us about the reforms, including online and during Fair Trading’s information sessions.

    You can also learn more about the reforms by watching the recordings from the information sessions:

    •    3 November: Changes to Licensing and Supervision

    •    9 November: Compliance and Consumer Protection

    How will you ensure these reforms don't increase the cost of construction and reduce competition, especially if they change the number of licensed people in the industry?

    These reforms have been developed through a co-design process involving targeted feedback and engagement with industry representatives. This process focused on examining the expected effects of the proposed changes, including unintended consequences and impact on costs and competition.

    The Regulatory Impact Statements provide further information on the expected effects of these reforms based on research and feedback received as part of this co-design process. 

    Chapter 5: How do we transition industry into a new scheme? in the Regulatory Impact Statement - Building Bill 2022: Part 3 Building compliant homes outlines the proposed transitional arrangements to provide industry with adequate time to implement these changes. 

    We encourage you to make a submission or complete our survey to share your feedback about the expected effects of the proposed reforms. 

    You can also learn more about our co-design process with industry representatives in the general FAQs under How have the proposed reforms been designed?.


    Why have these changes been introduced now, when the building and construction industry is facing many challenges, such as skilled labour shortages and tightened profit margins?

    The NSW Government’s Construct NSW transformation strategy is working to restore public confidence in the building and construction sector and create a customer-facing sector by 2025. The strategy, and appointment of the NSW Building Commissioner, responded to repeated failures in the design, construction and certification of buildings that had led to substandard building work. 

    These reforms contribute to the NSW Government’s work by ensuring buildings are:

    • fit for purpose
    • sustainable
    • measurably less risky
    • built by the most capable people, and 
    • customers who buy them are confident to own and occupy them.

    The need for these reforms is clear but we also acknowledge the significant pressures currently facing the building and construction industry. We also acknowledge the impact these changes will have on industry and will continue to support businesses and licence holders in ensuring a seamless transition into the new scheme. 

    We are proposing to introduce the various building reforms in phases, allowing sufficient time for industry to prepare for the changes. You can find more information about these timeframes in the general FAQs under When will the reforms commence? and in Chapter 5: How do we transition industry into a new scheme? in the Regulatory Impact Statement - Building Bill 2022: Part 3 Building compliant homes.


    Is mutual recognition being introduced for all occupations and what will it mean for someone who is licensed in NSW?

    Our building reform proposals aim to achieve greater licensing consistency with other Australian jurisdictions. One of the benefits of cross-jurisdictional consistency is an easier mutual recognition process, both for NSW and interstate building licence holders. 

    An interstate licence holder still needs to apply for mutual recognition, regardless of how aligned our licensing scheme is with other jurisdictions, unless existing automatic mutual recognition (AMR) rules apply.  

    The reforms support the introduction of the AMR scheme that is being introduced across Australia (except for Queensland) in two stages commencing 1 November 2022 and 1 July 2023. This will enable persons licensed in NSW to work in another State (except QLD) or Territory if they hold a similar licence.

    Occupations introduced on 1 November 2022 include:

    • Architects
    • Building and development certifiers (excluding registered certifiers for fire safety)
    • Design and building practitioners (excluding design practitioners for fire systems (all classes) and fire safety engineering, and professional engineers for fire safety)
    • Home building licences or certificates (carpenters, decorators, bricklayers, etc) but excluding the activities captured under stage 2 (see below)
    • Surveyors (excluding mining surveyors)
    • Asbestos removers and assessors
    • Demolition work

    Occupations to be introduced on 1 July 2023 include:

    • Home Building:
      • Contractor licence and supervisor certificate for general building work and for the erection of prefabricated metal-framed home additions and structures
      • Water plumbing for fire protection and fire sprinkler systems 
      • Mechanical services and medical gas work, medical gas technician work, medical gas fitting work 
      • Electrical wiring, air-conditioning and refrigeration work
    • Design practitioners for fire systems and fire safety engineering 
    • Professional engineers and registered certifiers for fire safety 
    • Conveyancers

    How do I get the relevant experience to transition to work in different building classes if my licence is restricted to a particular classes?

    While the Bill proposes that experience doing building work should include work done on commercial and residential buildings, it is proposed that builder licences restrict the kind of building a person can do work on to ensure that they are appropriately qualified to do the work. 

    While the details of this approach will be settled in the supporting Regulation, the Bill proposes the following building licences:

    • Builder 1 – High-rise and commercial: this unrestricted level would permit builders to carry out building work for all National Construction Code buildings.
    • Builder 2 – Medium-rise: this restricted level would permit builders to carry out building work for all National Construction Code buildings up to three storeys in height and 2,000 square metres in area.
    • Builder 3 – Low-rise, residential: this restricted level would permit builders to carry out building work in National Construction Code classes 1 and 10 only.

    This graduated licensing system intends to reserve more complex building work for more experienced practitioners. While this should secure better quality buildings, there will be costs borne by builders who are currently working without restrictions that may have  will have new restrictions due to a lack of relevant experience. For example, a person may be leading building work on an eight-storey office building, despite having limited or no experience as a builder. 

    While this example is more extreme, it illustrates that some building businesses will either need to restructure their operations to bring more experienced people on board, or limit the work that they contract for. Limiting the freedom to contract will be a significant burden–but our  focus is on requiring builders of complex buildings to have experience doing that work before they can lead that work without supervision. 

    Graduated licensing will allow those already working in the industry to continue working. If builders do not meet the new requirements for higher graded licences, they can progress in the industry by extending their skills through increased education and experience. Graduated licensing will provide a clear progression path for building and trade work by setting clear expectations for each graduation and a clearer understanding of what work can be carried out under each licence. This will include allowing builders to work on less complex builds and then progress to more complex builds with years of experience - allowing them to make the transition from low to medium to high rise over time as they build experience running increasingly complex builds.

    For more information about the proposed graduated licensing system, you can read Chapter 3: Review of building licensing in Regulatory Impact Statement - Building Bill 2022: Part 1 Who can do the work

    Will these reforms be consistent with building laws in other states?

    The NSW Government recognises the importance of ensuring consistency with other jurisdictions where possible. The Bill and its supporting regulations will significantly improve mobility across building occupations throughout all jurisdictions in Australia through better alignment of licence classes, the minimum competency requirements and the type of work authorised to be carried out by licence holders. 

    One of the intended outcomes of including commercial building work in the Bill is to achieve greater alignment with other jurisdictions, where commercial building work is already regulated. The proposed automatic mutual recognition reforms will also support licence holders who work across multiple jurisdictions by reducing regulatory burden. 

    Regarding supervision, the reforms aim to bring supervision standards in line with the majority of other Australian jurisdictions, which are more explicit in prescribing certain levels of supervision based on:

    • a worker’s experience and the relative risk of a task
    • the ratios that must be maintained between qualified supervisors and unlicensed persons, and  
    • what constitutes different levels of supervision.

    How do the proposals affect existing owner builder permits?

    Owner builders currently have an open-ended permit that lasts until the building work is complete. The proposed new scheme will place a 5-year limit on owner-builder permits. A transitional arrangement will require those who are on the current scheme to re-apply for a new owner-builder permit under the new scheme after a certain number of years. 

    Until the transitional period ends, current owner-builders will remain under the rules of the current scheme. The length of the transitional period has not yet been determined and we are seeking input on what is a reasonable timeframe for the expiry of current permits under the proposed scheme. 

    Where can I find more information about the licensing requirements that will affect me?

    More information about the proposed changes and how they affect different practitioners and vocations can be found in the Regulatory Impact Statements, available for download on the consultation site.

    Specific information about different practitioners and vocations can be found in the Regulatory Impact Statement - Building Bill 2022: Part 1 Who can do the work at:

    • Builders: page 38
    • Corporate licence holders and nominee supervisors: page 44
    • Close associates: page 46 
    • Specialist trades: page 48
    • Engineers: page 51
    • Building designers: page 57
    • Fire safety practitioners: page 61
    • Building inspectors: page 64
    • Owner-builders: page 73.

    If your question is not addressed in the Regulatory Impact Statements, we encourage you to complete our survey or make a submission.


FAQs on compliance and consumer protection

    Will tiny homes and granny flats be included in these reforms?

    Yes these reforms apply to tiny homes and granny flats. 

    It is proposed that moveable dwellings such as caravans will continue to be exempt.

    Will the proposed compliance and enforcement changes duplicate or replace council orders under the Environmental Planning and Assessment Act or the Local Government Act?

    No, the proposed changes will not affect or change the existing orders, powers and frameworks for council under the Environmental Planning and Assessment Act and Local Government Act. The proposals will expand the powers of the State regulator to address serious defects in buildings in NSW.

    Regarding the impact of the reforms on tiny homes, granny flats, prefabricated and manufactured homes: Does this new proposed law give local councils or individuals more say about building granny flats?

    The proposed reforms will regulate prefabricated houses such as granny flats and will bring these types of houses into the same planning system used for traditional onsite construction. However, this consultation does not cover a proposed planning process for prefabricated buildings. We are working across government and with industry on the planning approvals required for prefabricated and manufactured homes and welcome your input in future consultations. The regulation of prefabricated homes in the traditional planning system will provide greater consumer protections and confidence in the construction and outcome of a home.

    If I am doing prefabricated building work, when will the new laws start that mean I must have a licence?

    If the Bill is passed by Parliament next year (in 2023), it is proposed that these changes will commence from 2024 with an additional transitional period in place to allow for people currently doing prefabricated building work to become licensed.


    How common are issues with manufactured homes?

    Research on defect occurrence in prefabricated homes has found that the rate of defect occurrence is lower than for onsite construction. However, the cost of fixing defects is higher due to the cost of remediation*.

    For smaller volumetric components such as bathroom pods, NSW Fair Trading inspectors are reporting a high level of non-compliance and defects in the products that are being installed onsite. 

    NSW Fair Trading data indicates there are limitations in how current laws* regulate this building work. Treating this work consistently with other types of building work will reduce the cost of remediation across the sector.  

    * Callum Stutchbury Parrotte, Hong Xian Li and Linda Tivendale, ‘Defect Occurrence and Management in Prefabricated Commercial Construction in Australia’, (March, 2020).

    * Australian Consumer Law


    Will the installation or erection of a manufactured home require a construction certificate?

    It is proposed as part of the reforms that approvals for a prefabricated building will need to be lodged on the NSW Planning Portal as well as all certificates. Although the approval process is not part of these reforms, the NSW Government is working to ensure that the changes made will be consistent across the planning and construction spaces.

    When does a building product become an offsite manufactured component (OFMC)? Timber, windows, cladding and insulation are all building products but may be delivered to site already put together as a wall. Is that a building product or an OFMC?

    Industry feedback is currently being sought on when a prefabricated products such as timber trusses, windows and cladding should differ from a prefabricated building.

    Will there be Building Code of Australia (BCA) changes to allow for the differences between transportable traditional buildings? If transportable buildings were only required to meet current BCA compliance, they wouldn’t be suitable for transportation.

    While changes to the Building Code of Australia are not within the scope of these reforms, the proposed installation and transportation guide will oversee the requirements of transporting the building. 

    We are seeking feedback on what this installation and transportation guide should look like and what should be included to ensure that the building can withstand transportation.

    Manufactured buildings are not just for housing, they can also be for commercial buildings. Are the controls going to apply to all building classes?

    It is proposed that all work that falls within the definition of building work will be captured by the proposed reforms. Consumer protections, including the NSW Fair Trading dispute resolution process, will be limited to home building work.

    Regarding orders and remedial actions: If a prohibition order is issued, what timeframe will be allowed to rectify the serious defect?

    Prohibition orders restrict the ability of a developer to obtain an occupation certificate or register a strata plan. They may be issued for different reasons, including where a building has a serious defect. In these circumstances the time for resolving the serious defect will be set out in the relevant building work rectification order and will be dependent on the nature and complexity of the required remediation.

    Regarding cash flow and progress payments: Have you considered the impact on cashflow from lowering the trust threshold?

    The costs associated with the proposed changes are detailed on page 62 of the Regulatory Impact Statement – Building and Construction Legislation Amendment Bill and Regulation 2022

    An assessment was done of the financial and administrative costs associated with establishing and maintaining a retention money trust account. These costs are offset by the removal of the annual reporting requirements in December 2020 which were estimated to cost head contractor businesses up to $10,000, depending on the complexity of their accounts. 

    Since the proposed threshold is retained at $10 million, this proposal will only affect construction businesses with construction contracts worth $10 million or more. These construction businesses typically already engage the services of accountants and legal advisors to carry out this role.

    The Department is aware of the impacts COVID-19 has had on construction businesses that will now be required to keep retention money separately for projects worth $10 million and above. However, the impacts have been equally significant for subcontractors. That’s why we think this reform imposes a modest impact for significant gain. 


    Why is $10 million being proposed as the new threshold for holding retention money on trust?

    In 2020, the Government consulted with stakeholders on a proposal to reduce the $20 million threshold to $10 million. An impact analysis of the threshold was undertaken at that time and it was considered a reasonable threshold to moderate any impact of imposing trustee obligations on small businesses. 

    The decision to lower the threshold was deferred at the time given the impact of the COVID-19 pandemic on the building and construction industry. Now that we have a clearer understanding of the impacts of COVID, we are re-evaluating the proposal again because of the net benefit of having more projects captured by the requirements which ensures monies are better protected in the event of insolvencies. 

    Will the spread on a $1 million build over just four stages mean the builder will need to carry an operational overdraft of $250k per job, prior to being able to claim 'base' works?

    The proposal aims to reduce the reliance on the home building compensation scheme for non-completion of work. This proposal is subject to consultation and we welcome your feedback as part of this process. We invite your views on the impact of this proposal or, alternatively, any other way this issue could be managed.