Welcome to the eleventh edition of Foundations!
Foundations is NSW Fair Trading's e-newsletter for the home building industry.
In this edition we bring you news from the Long Service Corporation, an update about security of payment laws and a case study from the Tribunal showing the importance of keeping on top of contract variations. Get up to speed on solar with our articles on renewable energy installations, and please read our warning about itinerant traders who are currently operating in NSW.
We are interested to find out what you would like to see covered in future editions of Foundations. Contact us at firstname.lastname@example.org with your feedback.
Warning - itinerant traders in NSW
Unlicensed itinerant traders are currently operating in New South Wales, and Fair Trading is working hard to stop them.
Sometimes known as bitumen bandits, these are well funded and well organised groups who travel around Australia seeking work. They offer a range of services such as bitumen laying, roof painting and repairs, pressure cleaning of homes and driveways. There have also been reports of traders offering termite spraying and posing as utilities service providers to gain entry to consumers’ homes. However, all these offers are scams.
These traders may have a professional appearance but they provide little documentation and insist on cash or cash cheque payments. Some have even been known to drive consumers to their bank to withdraw the money for payment. Work, when carried out, is usually poor, over priced and often left incomplete, and these workers will often target vulnerable consumers such as the elderly or those in remote locations. In every case, consumers are conned and it is impossible for them to recover their money.
As part of Fair Trading’s ongoing commitment to stop unlicensed traders, a television campaign was aired on local and regional television in late 2010 specifically drawing attention to these itinerant groups. This campaign urged consumers to contact us if approached by suspicious traders. We are now pleased to report that there has been a notable decline in reports of itinerant activity since that campaign aired.
To help us crack down on these unlicensed traders, anyone who has information regarding these activities is encouraged to contact Fair Trading on 13 32 20 or report them to their local police.
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Installing solar panels
The use of renewable energy is becoming increasingly popular amongst residents of NSW, and many home owners are deciding to have solar panels installed on their properties. Fair Trading is responsible for making sure that these installations are carried out according to the required safety standards.
Traders wanting to get involved in the green energy business must meet licensing and contracting requirements, as well as be familiar with the relevant Australian Standard, before installing or contracting to install solar panels or any other green energy system. In NSW only the holder of a building or electrical class of licence can contract to install solar panels on the roof of a residential property or other premises.
Electrical wiring of all solar panels, whether on residential, commercial or industrial premises and regardless of the cost of the work, must be undertaken by the holder of an electrical contractor licence or a qualified supervisor certificate (QSC). This means a building contractor who enters into a contract to install solar panels must engage an appropriately licensed electrician to carry out all necessary electrical wiring work.
If the solar installation needs to be connected to the electricity distribution network, the work can only be undertaken by an Accredited Service Provider (ASP), a person authorised to work on parts of the electricity network. Visit the Industry & Investment NSW website www.industry.nsw.gov.au
to find a full list of ASPs.
Remember, in order for a solar panel installation to attract State or Federal Government rebates, the installer must be accredited by the Clean Energy Council of Australia. Go to the website www.cleanenergycouncil.org.au for more information, including how to become accredited and the costs involved.
More information for green energy contractors and installers is available from Fair Trading, including the rules about warranties, contracts, insurances and deposits. Go to the Green energy installers
page on the Fair Trading website.
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DC breakers in renewable energy installations
Fair Trading undertakes a number of activities to regulate electrical safety in NSW, and this includes conducting audits of Stand-Alone renewable energy installations. This has recently been extended to include grid connected installations.
Our investigators have been finding instances where the polarised DC circuit breakers have been incorrectly wired. If the circuit breaker is operated (opened), this could lead to sustained electrical arcing and, in a worst case scenario, could cause a fire in the circuit breaker. When Fair Trading investigators come across this situation the owner of the installation is notified, and the installing contractor is instructed to rectify the fault. If the installation is deemed to pose an immediate danger, appropriate action is taken to ensure the installation is isolated.
We are currently working with the renewable energy industry and Electrical Network Operators to determine if this is a systemic problem within the industry. As DC circuits have different characteristics to AC circuits, Electrical Contractors must ensure that polarised DC circuit breakers are installed correctly. Failure to ensure correct polarity may lead to a failure of the system.
Electrical contractors are reminded that Clause 36 of the Electricity (Consumer Safety) Regulation 2006 requires that safety and compliance tests are carried out to ensure that electrical installations comply with the Australian Standard AS/NZS 3000. The Electricity (Consumer Safety) Act 2004 includes substantial penalties for contractors whose work does not comply.
Further technical information can be found in the 'Installer resources' section of the Clean Energy Council Accreditation website.
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Australian Consumer Law
The new Australian Consumer Law (ACL) came into effect on 1 January 2011. The ACL applies nationally and replaces the Commonwealth, State and Territory consumer protection legislation in fair trading acts and the Trade Practices Act 1974.
In NSW the Australian Consumer Law (NSW) has replaced parts of the NSW Fair Trading Act 1987. The key changes in NSW apply to:
- consumer guarantees
- product safety
- acceptable business practices
- unfair contract terms
- sales practices
To keep up-to-date with changes to the law, and find out about events and resources, go to the Consumer Law website and subscribe to receive an email when new information is released.
You can also visit the Consumer law changes in NSW page on the Fair Trading website for more information about the ACL and other national reforms to consumer laws that are underway.
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Cancellation of Long Service Corporation registrations
On 14 March 2011 the Long Service Corporation (the Corporation) issued approximately 20,000 workers in the building and construction industry with notifications of the intention to cancel their registration in the Long Service scheme.
This is in accordance with the Building and Construction Industry Long Service Payments Act 1986, which requires the Corporation to cancel the registration of a worker who has not recorded service in the last four years.
Workers have the right to appeal to the independent Building and Construction Industry Long Service Payments Committee against the cancellation of their registration. An appeal form was included with each notification that was sent out. Appeal forms, with the required supporting documentation, must be received by 5pm on the 2 May 2011. Under the legislation any appeals received after that date cannot be considered.
After 2 May 2011 workers who have not appealed will be cancelled from the register of workers. Following cancellation they will cease to be a registered worker and any recorded service will not count towards any future entitlement.
For more information on the cancellation of worker registrations phone the Corporation’s Helpline on 13 14 41 before the 2nd May 2011. The Helpline is open Monday to Friday between 8:30am and 5pm.
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Changes to the Security of Payments laws
It is sometimes difficult for subcontractors in the industry to get paid in a timely manner. The Building and Construction Industry Security of Payment Act 1999 (the Act) exists to help resolve payment disputes that can occur between contractors and subcontractors. There have been some recent changes to the Act that provide additional security to unpaid subcontractors.
From 28 February 2011, a subcontractor (the claimant) who applies for adjudication under the Act can issue the principal contractor with a Payment Withholding Request for the amount of money in dispute. This means the principal contractor must hold back that amount of money from any payment that is owed to the respondent (i.e. the contractor against whom the claim has been made).
In effect, this ‘freezes’ the amount that is in dispute and prevents the principal contractor from paying it to the respondent until the adjudicator has determined whether money is owed.
If you are a subcontractor who wants to use these new provisions when making a claim against a contractor, you will need to commence adjudication under the Act and fill out a Payment Withholding Request form. You will also be required to complete a statutory declaration stating that you genuinely believe that the money you are claiming is owed to you by the respondent you have named.
Remember, this adjudication process can only be used against those who have a commercial stake in the building and construction industry, so it cannot be used to obtain payment from a private home owner. Speak to your legal adviser, trade union or industry association if you want to know whether you can use the Act in your particular circumstances.
You can find more information on the new provisions and the Act in general by visiting the Security of Payment page on the NSW Procurement website.
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When contract variations go wrong
Under the Home Building Act 1989, a builder is required to perform works in accordance with the plans and specifications set out in the building contract. The following case study from the Consumer, Trader and Tenancy Tribunal (CTTT) serves as a good reminder of this, demonstrating what can happen if a builder fails to obtain the client’s agreement to any variation to the contract.
Home owners entered into a contract with a builder to construct a project home. Before signing the contract, the parties agreed to a number of variations – including $2630 for non-standard veranda balustrades. At the end of construction, overall the owners were happy with their new home, except for the balustrades which they did not like and which were different to what they had chosen.
The parties tried to resolve their dispute through Fair Trading’s Home Building Service. When this was unsuccessful, the owners lodged an application with the CTTT. At the CTTT hearing, the home owners claimed the balustrades did not look as good as they had hoped, and the design meant that cleaning would be more difficult. They asked for a reimbursement of the money paid for the variation.
The builder agreed the balustrades were different to those specified in the contract, and explained the balustrade supplier had changed after the order was placed. He did not realise the balustrades were different until the practical completion report was prepared. As there was no loss of amenity, the builder argued the home owners should not be entitled to a refund.
The CTTT found the builder was in breach of the Home Building Act 1989 [section 18B(a)] by failing to build the balustrades in accordance with the plans and specifications set out in the contract. It was determined that there was no loss of amenity for the home owners, and no evidence that the installed balustrades decreased the value of the property. The CTTT awarded a sum of money to the home owners to compensate them for their disappointment in not receiving the balustrades as stipulated in the contract.
Visit the Home Building Division on the CTTT website for more case studies.
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Renewing your contractor licence
It’s something that every contractor licence holder needs to know – how and when to renew your contractor licence.
The ‘when’ is easy – every contractor licence has an expiry date on it, and you need to make sure you have taken action to renew your licence in advance of that date. Fair Trading will send out your renewal notice several weeks before the expiry date, but it you don’t receive the notice don’t just forget about your renewal. It’s your responsibility to get in touch with us so we can send you out a replacement form.
Now what about how you renew? Although you can still mail the paperwork back to Fair Trading, there are several ways that might be more convenient for you. Firstly, why not renew online? It’s quick and easy, and it’s also cheaper because you receive a discount on any fees that are payable. It should only take about 24 hours for the licence to renew on our licensing system and for the online public register to be updated with your new expiry date. Your new card will then be automatically generated and sent to you in the mail within a couple of weeks.
If you are unable to renew your licence online, another option is to drop in to your local Fair Trading centre and hand over your renewal paperwork in person. This is ideal for those of you who may have left it till the last minute to renew your licence, because this way you know your paperwork has been safely received by Fair Trading. There are Fair Trading centres around the state, and each centre has staff able to process your renewal application. As with online renewals, your card gets mailed out to you a couple of weeks later. For a full list of centres, go to the Fair Trading centres page on our website.
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Introducing the Assistant Commissioner
Fair Trading is pleased to introduce John Tansey as the new Assistant Commissioner of the Home Building Service (HBS). This is a key role in the organisation and carries overall responsibility for ensuring HBS fulfills its main function: achieving compliance and maintaining standards within the residential building industry in NSW.
John comes to us with a wealth of senior executive experience. He spent eight years with the Department of Premier and Cabinet, where he worked closely on Fair Trading matters, particularly on home warranty insurance reforms and the establishment of the Home Building Service. Most recently he held the position of Executive Director at Community Services, where he was responsible for overseeing strategy and reforms in funding and contracting activities.
John will be an invaluable asset and addition to the Fair Trading executive team and we are pleased to welcome him on board.
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New rules about access to buildings
The Disability Discrimination Act makes it unlawful to discriminate on the grounds of disability in providing access to premises that the public can enter or use. Building access issues also crop up under other disability discrimination provisions relating to employment, accommodation and access to services. The Australian Human Rights Commission has made this issue one of its major projects.
As a result, new Commonwealth standards, the Disability (Access to Premises – Buildings) Standards 2010 (Premises Standards) are due to commence on 1st May 2011. Amendments to the Building Code of Australia (BCA) reflecting the construction standards in the Premises Standards will commence the same day.
The Premises Standards clarify how building professionals can meet their responsibilities to ensure buildings are accessible to people with disability, and it is anticipated that this will bring a range of improvements to public building access across Australia. State and Territory Governments are responsible for developing regulatory changes to achieve as much consistency as possible between disability discrimination laws and building laws.
Once in force, the Premises Standards will apply to all new building work, apart from class 1a buildings (single dwelling homes or rows of homes) and class 4 buildings (dwellings associated with non-residential buildings, such as a caretaker building). In addition, some existing buildings will be affected. Builders, property developers, property owners, lessees, project managers, property managers and building certifiers will each have responsibility for ensuring new buildings and building work comply with the new Standards.
Late last year the Australian Human Rights Commission and the Australian Building Codes Board delivered some seminars to raise awareness about the new Standards amongst the building and construction industry. A webcast of this seminar is now available and is an excellent place to start if you need more information on this issue. To access the webcast follow the links on the Australian Human Rights Commission website. Further information is also available on the Building Professionals Board website.
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Changes to NSW tenancy laws
In the last edition of Foundations we mentioned the changes to tenancy legislation in NSW. There are approximately 800,000 rental properties in NSW and an estimated 1.6 million people currently rent properties in NSW, so tenancy laws are relevant to most people at some point in their lives, whether as a tenant or a property investor.
The Residential Tenancies Act 2010 and associated Regulation are now in force, having commenced on 31 January 2011. There are a significant number of changes which may affect tenants or landlords at any stage of their tenancy. For example:
- tenants must be given at least one fee-free way to pay their rent;
- red tape has been cut for landlords dealing with goods left behind by tenants;
- landlords are encouraged to make premises ‘water efficient’;
- if a lease has expired, tenants now have 90 days ‘no grounds’ notice to move out; and
- landlords gain the clear right to show premises to prospective tenants or buyers at least twice a week.
There is a new standard residential tenancy agreement and condition report available through the Fair Trading website, and of course plenty of related information on a range of tenancy topics. So if you are a tenant or a landlord, go to the Tenancy reforms page of the Fair Trading website more information.
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