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This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
Home Building Contracts Amendment Bill 2002
CONTENTS
1. Short title 1
2. Commencement 2
3. The Act amended 2
4. Long title amended 2
5. Section 3 amended 2
6. Section 9 amended 2
7. Section 14 amended 2
8. Heading to Part 3A amended 3
9. Section 25A amended 3
10. Section 25B amended 4
11. Section 25C amended 4
12. Section 25D amended 6
13. Section 25DA inserted 6
14. Section 25F replaced 7
15. Section 25GA inserted 8
16. Part 3A Division 3A inserted 8
17. Part 3A Division 5 inserted 10
18. Section 32 amended 13
19. Section 33 amended 13
20. Various references to "shall" changed to "must" 13
21. Consequential amendment to the Local Government
(Miscellaneous Provisions) Act 1960 14
page i
127--1
Western Australia
LEGISLATIVE ASSEMBLY
Home Building Contracts Amendment Bill 2002
A Bill for
An Act to amend the Home Building Contracts Act 1991 in relation to
home indemnity insurance and the approval of funds providing
corresponding cover; and to amend the Local Government
(Miscellaneous Provisions) Act 1960 consequentially.
The Parliament of Western Australia enacts as follows:
1. Short title
This Act may be cited as the Home Building Contracts
Amendment Act 2002.
page 1
Home Building Contracts Amendment Bill 2002
s. 2
2. Commencement
This Act comes into operation on the day on which it receives
the Royal Assent.
3. The Act amended
5 The amendments in this Act, other than in section 21, are to the
Home Building Contracts Act 1991*.
[* Reprinted as at 9 November 2001.]
4. Long title amended
The long title is amended by inserting after "insurance" --
10 " and funds providing corresponding cover ".
5. Section 3 amended
Section 3(1) is amended by inserting the following definition in
the appropriate alphabetical position --
"
15 "building licence" means a building licence under
section 374 of the Local Government
(Miscellaneous Provisions) Act 1960;
".
6. Section 9 amended
20 Section 9(1)(a) is amended by deleting "under Part XV of the
Local Government (Miscellaneous Provisions) Act 1960".
7. Section 14 amended
Section 14(1)(b) is amended by inserting after "apart from this
section" --
25 " and Part 3A ".
page 2
Home Building Contracts Amendment Bill 2002
s. 8
8. Heading to Part 3A amended
The heading to Part 3A is amended by inserting after
"insurance" --
" and corresponding cover ".
5 9. Section 25A amended
(1) Section 25A is amended by inserting the following definitions
in the appropriate alphabetical positions --
"
"approved fund" means a fund that is approved under
10 section 25GB;
"building contract" means --
(a) a residential building work contract; or
(b) a cost plus contract between a builder and
another person for the performance by the
15 builder of residential building work but does
not include a contract for the performance by
a builder of residential building work for
another builder who is in turn obliged to
perform the work under another contract;
20 "corresponding cover" --
(a) in relation to residential building work
performed by a builder, means the cover
referred to in section 25DA; and
(b) in relation to residential building work
25 performed by an owner-builder, means the
cover referred to in section 25GA;
"developer" means a person for whom residential
building work is performed under a building
contract in relation to 4 or more dwellings;
30 "rescind", in relation to a contract, means to avoid the
contract as from its beginning;
page 3
Home Building Contracts Amendment Bill 2002
s. 10
"sale contract", in respect of residential building work
performed by a builder or owner-builder, means a
contract to sell or otherwise dispose of --
(a) a dwelling constructed by the builder or the
5 owner-builder; or
(b) the land on which the building is
constructed;
"settlement" means the time at which the obligations
under a sale contract are completed to the extent
10 that the purchaser under the contract is entitled to
be registered as the proprietor of the dwelling or
land.
".
(2) Section 25A is amended in the definition of "owner-builder" by
15 deleting "under" and inserting instead --
" in the circumstances referred to in ".
(3) Section 25A is amended in the definition of "residential
building work contract" by deleting "contract." and inserting
instead --
20 " contract; ".
10. Section 25B amended
Section 25B(2) is amended by deleting "under Part XV of the
Local Government (Miscellaneous Provisions) Act 1960".
11. Section 25C amended
25 (1) Section 25C(1) is repealed and the following subsection is
inserted instead --
"
(1) A builder must not perform residential building work
to which this Division applies unless --
30 (a) a policy of insurance that complies with this
Division is in force in relation to the residential
building work; or
page 4
Home Building Contracts Amendment Bill 2002
s. 11
(b) corresponding cover is provided by an
approved fund in relation to the residential
building work.
Penalty: $10 000.
5 ".
(2) Section 25C(2) is amended by deleting "that policy" and
inserting instead --
"
the policy referred to in subsection (1)(a) or the
10 provision of the cover referred to in subsection (1)(b)
".
(3) After section 25C(2) the following subsections are inserted --
"
(3) Subsections (1) and (2) do not apply to a builder who
15 performs residential building work to which this
Division applies if --
(a) the builder performs the residential building
work during a period specified in an order
made under section 25I for the purposes of this
20 subsection; or
(b) the builder performs the residential building
work --
(i) after the end of a period specified in an
order made under section 25I for the
25 purposes of this subsection; and
(ii) under a building licence issued before or
during that period.
(4) A builder is not entitled to cancel a policy of insurance
that complies with this Division, or corresponding
30 cover provided by an approved fund, in relation to
residential building work solely on the basis that
subsections (1) and (2) do not apply, because of
page 5
Home Building Contracts Amendment Bill 2002
s. 12
subsection (3), to the builder in relation to the
residential building work.
".
[Note: The heading to section 25C will be altered to read "Offence of no insurance or
5 no corresponding cover".]
12. Section 25D amended
Section 25D(1)(a) is amended by inserting after "on behalf of
another person" --
" , other than a developer, ".
10 13. Section 25DA inserted
After section 25D the following section is inserted in
Division 2 --
"
25DA. Corresponding cover by an approved fund --
15 builders
(1) Corresponding cover is provided by an approved fund
in relation to residential building work performed by a
builder if the person for whom the residential building
work is performed, and that person's successors in title,
20 are in the same position that they would be if a policy
of insurance that complies with this Division were in
force in relation to the residential building work.
(2) Any discretion that a person has to approve a claim on
the fund is to be disregarded for the purposes of
25 subsection (1).
".
page 6
Home Building Contracts Amendment Bill 2002
s. 14
14. Section 25F replaced
Section 25F is repealed and the following section is inserted
instead --
"
5 25F. Restriction on sale by owner-builder
(1) An owner-builder must not, within 7 years of the date
of issue of the relevant building licence to the
owner-builder, enter into a sale contract unless --
(a) either --
10 (i) a policy of insurance that complies with
this Division is in force in relation to the
residential building work; or
(ii) corresponding cover is provided by an
approved fund in relation to the
15 residential building work;
and
(b) the purchaser has been given a certificate, in a
form approved by the Minister, that evidences
the taking out of the policy referred to in
20 paragraph (a)(i) or the provision of the cover
referred to in paragraph (a)(ii).
Penalty: $10 000.
(2) Subsection (1) does not apply to an owner-builder if
the owner-builder enters into a sale contract during a
25 period specified in an order made under section 25I for
the purposes of this subsection.
".
page 7
Home Building Contracts Amendment Bill 2002
s. 15
15. Section 25GA inserted
After section 25G the following section is inserted in
Division 3 --
"
5 25GA. Corresponding cover by an approved fund --
owner-builders
(1) Corresponding cover is provided by an approved fund
in relation to residential building work performed by an
owner-builder if the purchaser, and the purchaser's
10 successors in title, are in the same position that they
would be if a policy of insurance that complies with
this Division were in force in relation to the residential
building work.
(2) Any discretion that a person has to approve a claim on
15 the fund is to be disregarded for the purposes of
subsection (1).
".
16. Part 3A Division 3A inserted
Before section 25H the following Division is inserted --
20 "
Division 3A -- Approved funds
25GB. Minister's approval of a fund
(1) The Minister may, by order published in the Gazette,
approve a fund for the purposes of this Part.
25 (2) The Minister is not to approve a fund unless --
(a) the fund is, or is similar to, a mutual fund;
(b) the rules of the fund (however described) are
approved by the Minister;
page 8
Home Building Contracts Amendment Bill 2002
s. 16
(c) each person responsible for the management of
the fund is approved by the Minister in relation
to the fund;
(d) the Minister is satisfied that there is, or will be,
5 adequate insurance or other provision for
excess losses of the fund; and
(e) each insurer providing the insurance referred to
in paragraph (d) is authorised under the
Insurance Act 1973 of the Commonwealth to
10 carry on insurance business, and is approved by
the Minister in relation to the fund.
(3) In deciding whether to approve a fund, the Minister
may take into account --
(a) the independence of the persons involved in, or
15 responsible for, the management, provision for
excess losses and auditing of the fund;
(b) matters that do not necessarily relate to the
particular fund but which relate to the building
or insurance industries generally; and
20 (c) any other relevant matter.
(4) The Minister may impose conditions on the approval
and vary those conditions at any time.
25GC. Minister's consent to changes to an approved fund
The matters set out in section 25GB(2)(a), (b) and (c),
25 as they apply to an approved fund, must not change in
respect of the fund without the Minister's written
consent.
25GD. Revocation of Minister's approval of a fund
The Minister may, by order published in the Gazette,
30 revoke the Minister's approval of a fund if --
(a) a matter, as it applies to an approved fund, has
changed in contravention of section 25GC;
page 9
Home Building Contracts Amendment Bill 2002
s. 17
(b) the Minister is no longer satisfied that there is
adequate insurance or other provision for
excess losses of the fund as referred to in
section 25GB(2)(d); or
5 (c) an insurer referred to in section 25GB(2)(e) --
(i) is not, or is no longer, authorised; or
(ii) is not, or is no longer, approved,
as required by that provision.
".
10 17. Part 3A Division 5 inserted
After section 25H the following Division is inserted in
Part 3A --
"
Division 5 -- Provisions about non-application of
15 sections 25C(1) and (2) and 25F(1)
25I. Minister may make orders specifying periods
(1) For the purposes of section 25C(3) or section 25F(2),
or both, the Minister may, by order published in the
Gazette, specify a period of up to 6 months, which is
20 not to commence before the day on which the order is
published.
(2) The Minister may make no more than 4 orders for the
purposes of section 25C(3) and no more than 4 orders
for the purposes of section 25F(2).
25 25J. Notice requirements -- builders
(1) In this section --
"specified period" means a period specified in an
order made under section 25I for the purposes of
section 25C(3).
page 10
Home Building Contracts Amendment Bill 2002
s. 17
(2) A builder must not, during a specified period, enter into
a building contract or sale contract in respect of
residential building work unless the builder has given
the other party to the contract a notice in the form
5 prescribed by the regulations.
Penalty: $10 000.
(3) A builder must not, after the end of a specified period,
enter into a building contract or sale contract in respect
of residential building work performed by the builder
10 under a building licence issued before or during that
specified period unless the builder has given the other
party to the contract a notice in the form prescribed by
the regulations.
Penalty: $10 000.
15 (4) A failure to provide a notice in accordance with
subsection (2) or (3) does not, of itself, invalidate a
contract.
(5) If --
(a) at a time that is not during a specified period, a
20 builder enters into a building contract or sale
contract in respect of residential building work;
and
(b) a specified period commences before a building
licence for the residential building work is
25 issued,
the builder must give the other party to the contract a
notice in the form prescribed by the regulations as soon
as practicable after the specified period commences.
Penalty: $10 000.
30 (6) If the party to whom a notice must be given under
subsection (5) is not a developer, the party may rescind
the contract.
page 11
Home Building Contracts Amendment Bill 2002
s. 17
(7) To rescind the contract, the party must give notice of
the exercise of the right to rescind to the builder before
the earlier of --
(a) the expiration of one month after the day on
5 which the notice referred to in subsection (5) is
received by the party; or
(b) settlement (in the case of a sale contract) or
practical completion (in all other cases).
25K. Notice requirements -- owner-builders
10 (1) In this section --
"specified period" means a period specified in an
order made under section 25I for the purposes of
section 25F(2).
(2) An owner-builder must not, during a specified period,
15 enter into a sale contract in respect of residential
building work unless the owner-builder has given the
purchaser a notice in the form prescribed by the
regulations.
Penalty: $10 000.
20 (3) A failure to provide a notice in accordance with
subsection (2) does not, of itself, invalidate a contract.
25L. Giving a copy of the notice to a subsequent
purchaser
(1) If a person to whom a notice is given under section 25J
25 is a developer in respect of the residential building
work, the person (the "developer") must, before
entering into a sale contract in respect of the residential
building work, give a copy of the notice to the other
party to the sale contract (the "purchaser") if
30 settlement for the sale contract is, or is likely, to occur
within 6 years of practical completion of the residential
building work.
Penalty: $10 000.
page 12
Home Building Contracts Amendment Bill 2002
s. 18
(2) A failure to provide a notice in accordance with
subsection (1) does not, of itself, invalidate a contract.
".
18. Section 32 amended
5 (1) Section 32(2) is amended as follows:
(a) by inserting after "home indemnity insurance" in both
places where it occurs --
" or corresponding cover ";
(b) in paragraph (b) by inserting after "Part" --
10 "
, either unconditionally or subject to such
conditions as are specified in the regulations
".
(2) After section 32(2) the following subsection is inserted --
15 "
(3) The regulations may provide that a contravention of a
regulation or a provision of a regulation constitutes an
offence and provide for penalties not exceeding a fine
of $5 000.
20 ".
19. Section 33 amended
Section 33 is amended by inserting after "this Act" --
" (other than section 25J(5), (6) and (7)) ".
20. Various references to "shall" changed to "must"
25 Each provision of the Act listed in the Table to this section is
amended by deleting "shall" in each place where it occurs and
inserting instead --
" must ".
page 13
Home Building Contracts Amendment Bill 2002
s. 21
Table
s. 15(3) and (4) s. 31A
s. 18(2) and (3) s. 31B(11)
s. 25C(2) s. 34(1), (2) and (3)
s. 25H(1) and (2) Sch. 1 cl. 5(3)
21. Consequential amendment to the Local Government
(Miscellaneous Provisions) Act 1960
(1) The amendment in this section is to the Local Government
5 (Miscellaneous Provisions) Act 1960*.
[* Reprinted as at 28 July 1999.
For subsequent amendments see 2001 Index to Legislation of
Western Australia, Table 1, p. 221.]
(2) Section 374AAA is amended by deleting paragraph (b) and "or"
10 before it and inserting the following instead --
"
(b) corresponding cover, as defined in section 25A
of that Act, is provided in respect of the work;
or
15 (c) the policy of insurance referred to in
paragraph (a) or the cover referred to in
paragraph (b) is not required in respect of the
work.
".
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