Building Legislation Amendment Act 2023 : Key Changes Explained

7 September 2025 in Building and Construction Law | 7 min read | skip to FAQs

The NSW Government is in the process of overhauling the construction industry through new building law reforms. The Building Legislation Amendment Act was passed on 21 November 2o23. It is part of the ‘Construct NSW’ transformation strategy to better regulate the construction industry and re-establish consumer confidence in both residential and commercial sectors.

Which Existing Acts did the Building Legislation Amendment Act Amend?

The Building Legislation Amendment Act amended

1. The Home Building Act 1989 (NSW) HBA
2. The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) RAB
3. The Building Products (Safety) Act 2017 (NSW) Safety
4. The Strata Schemes Management Act 2016 (NSW) and the Strata Scheme Management Regulation 2016 (NSW)
5. The Design and Building Practitioners Act 2020 (NSW)
6. The Building and Development Certifiers Act 2018 (NSW)

Building Products Safety Act Amendment 2023 (NSW)

Part 2A of the Building Legislation Amendment Act covers the chain of responsibility for building products. It is aimed at ensuring greater accountability for building product safety throughout the supply chain. This is achieved by

Widening of the Chain of Responsibility in the Supply Chain by including more occupations:

Section 8B widens the chain of responsibility to include any person who designs or deals with a building product, a person who prepares a building design that would use or recommend the use of a building product, a person who uses the product in a building or any person otherwise specified as being part of the chain of responsibility. As a result of this, a wide range of occupations now form part of the chain of responsibility, including manufacturers, architects, developers, engineers, suppliers, importers, and tradespeople. This applies to construction of all building classes.

Increased Duties to those in the Supply Chain:

Section 8E imposes a duty to ensure products comply with relevant standards, such those in the National Construction Code.                  Section 8F creates a duty to provide extensive information to others in the supply chain. This includes intended use, conditions and circumstances that impact its suitability, instructions on how to ensure the product is used compliantly and product maintenance information.                                                                                                                                                                                                                              Section 8H imposes a duty to notify the Building Commissioner of a product’s non-compliance or safety risk within seven days. Furthermore, it must be in a form approved by the Secretary that can and will be made publicly available online.

Increased Responsibility when Products are Recalled:

All supply chain members to cease supplying or using the relevant product, Section 81. For suppliers, manufacturers or importers, there are further duties to repair or modify, replace or refund the relevant product. Moreover, building designers must amend their designs to remove the product and specify the compliant replacement.

Greater Powers to Building Commissioner

1. Issue product warnings, Section 15;
2. Issue supply and usage bans and recalls, Sections 15B, 15D, 15F
3. Issue show cause notices with a threat of trading prohibitions, Section 41B;
4. Apply to the Supreme Court for orders to prohibit supply of building products, 41C;
5. Issue building product directions, Section 46B
6. Seize products, Section 53B;
7. Issue safety notices and directions, even when building products comply with the National Construction Code, Section 85

Amendments to the Home Building Act

An important part of the Building Legislation Amendment Act 2023 No. 44 (NSW) is the establishment of the NSW Building Commission. The Commission is responsible for the regulation of laws applying to a wide range of businesses and individuals associated with the construction industry. This includes home builders, developers, financiers, residential building tradespeople, design and building practitioners and certifiers. For further information on the Building Commission, please see our dedicated article.

How the Commission relates to Home Building

The ability of the Building Commission to investigate and enforce building regulations covers both class 1 and class 2 buildings. Class 1 buildings refer to houses, which are typically standalone single dwellings of a domestic or residential nature. They can also be horizontally attached to other Class 1 buildings such as in a row of terraces, townhouses or duplexes. Class 2 buildings are usually multi-storey, multi-unit apartment buildings where people live above or below each other. They may also be a single storey attached dwelling where there is a common space below, such as a carpark.

Class 1 buildings were not previously subjected to the same scrutiny during construction, or the ability of an inspector/regulator to enforce building codes during the build as Class 2 buildings have been. The Building Legislation Amendment Act has changed this.

What are the Changes in Home Building?

The Amendment Act in tandem with the Home Building Act 1989 (NSW) grants the NSW Building Commission the power to investigate residential building work, Section 49A. This involves entering any residential home under construction or where construction work is being undertaken to:

1. Examine, inspect and observe anything within the site;
2. Select and remove samples;
3. Request and copy records for inspection;
4. Take photographs or videos;
5. Seize items where there are grounds to believe it is connected to an offence or defect.

Post inspection of the site, the Building Commission has the power to:

1. Issue stop work or prohibition orders, Section 129
2. Issue rectification orders to a contractor requiring them to take steps to ensure a defect is rectified, Section 49B(1)
3. Issue significant penalties for non compliance.

Why have these Changes been Made?

Whilst these powers are wide ranging and extensive, they aim to both increase the overall quality of residential building projects and the standard to which builders operate.

Importantly, the aim of the Building Commission is to proactively identify defects and illegal construction problems during the building of residential works, and have them rectified prior to completion. This change aims to reduce the rate of residential building litigation and the associated expensive rectification processes required due to home building faults not being identified until the home is completed and occupied.

Decennial Liability Insurance

The Building Legislation Amendment Act also introduced Decennial Liability Insurance (DLI), also known as inherent defect insurance. DLI is an insurance product available to property developers which insures developers against serious defects in building elements for up to 10 years and on a strict liability basis. This is not mandatory for the next five years, working in parallel to previous building insurance such as the strata bond scheme. The NSW government envisages that it will become mandatory at the five year mark.

What is a Serious Defect?

The Building Legislation Amendment Act borrows the definition of a serious defect from the Residential Apartment Buildings (Compliance and Enforcement Powers Act) 2020 definition. That is, a serious defect is a defect in a building element that is attributable to a failure to comply with the performance requirements of the Building Code of Australia, defective design, defective workmanship or defective materials and is likely to cause the collapse, destruction or inability to inhabit the building or any part of the building.

What is Strict Liability?

Strict liability basis means that the element of “fault” on behalf of the builder or developer is no longer required to be established for owners to be compensated, or defective works rectified. The elimination of the fault element in claims for serious defects under a DLI policy means the process for homeowners seeking rectification of major defects in their property is streamlined, promoting swift, out of Court resolutions to construction disputes.

Why Exclude Fault for Compensation and Rectification?

While it may seem counterintuitive to insure developers against seriously defective works for 10 years, the implementation of this scheme is actually a positive shift toward the protection of building occupiers (often homeowners) who are unable to utilise their buildings. The introduction of DLI means claimants are no longer required to bear the financial burden of pursuing developers for defective works, as there is no element of fault to be proven under the new legislative framework.

New South Wales is the first state in Australia to implement a decennial liability scheme, with the goal of improving consumer confidence in the residential and commercial construction sectors as well as ensuring resolution efficiency for occupants of buildings.

Design and Building Practitioners Act 2020 (NSW)

Section 64 of  Building Legislation Amendment Act 2023 (NSW) amends the Design and Building Practitioners Act 2020 (NSW) by increasing the grounds for disciplinary action against registered construction practitioners to further protect consumers and promote confidence within this sector.

Following the amendment of the Design and Building Practitioners Act, the Secretary (governing body) may pursue disciplinary action against a registered practitioner if the practitioner has:

1. Used or supplied a building product in contravention of a building product use ban, building product supply ban or building product recall within the meaning of the Building Products (Safety) Act 2017, or
2. Contravened another requirement of the Building Products (Safety) Act 2017, whether or not the holder is prosecuted or convicted for the contravention.

A closer examination of these amendments suggests that the NSW Government has implemented these amendments to ensure that the suppliers of products are conforming to updated standards across NSW.

In assessing the amendments to the Design and Building Practitioners Act, in conjunction with the other amendments discussed above, it is clear that the NSW Government is implementing a broader approach to law reform across the building industry with the intention to protect residential and commercial consumers of building and construction projects, and restore their confidence in the industry.

Key Takeaways

The Building Legislation Amendment Act 2023 is part of the NSW government’s plan to reform the building industry. It amends several existing Acts, importantly, the Home Building and Building Products (Safety) Acts and introduces decennial liability insurance. The amendments grant the newly formed Building Commission with a wide range of regulatory and rectification powers in relation to home building. The aim is to identify and rectify problems in class 1 buildings during the construction process. The regulations regarding building product safety have been extended to enforce greater accountability and responsibility across the supply chain. The chain now encompasses developers, designers, manufacturers, architects, importers, suppliers, contractors and subcontractors, all of whom have increased legal obligations.

How can BSM Sydney Lawyers assist you?

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