The Malinauskas Labor Government is seeking community feedback on a series of proposals to improve protections for South Australian home buyers, including tougher regulations for developers.
The proposals have been developed through the most significant review of the state’s building laws in more than 20 years.
Options under consideration through the Building and Construction Industry Review include:
- A regulation scheme for developers;
- A registration or licensing scheme for building inspectors;
- A binding rectification order scheme administered by Consumer and Business Services (CBS), to resolve building disputes about defective work quickly and cost effectively without parties going to court;
- The transfer of domestic building work disputes from the Magistrates Court to SACAT, to allow for faster and cheaper dispute resolution;
- Increased penalties for parties who fail to attend compulsory conciliation conferences for building disputes;
- Limitation or regulation of the use of ‘sunset’ clauses to terminate off-the-plan contracts.
In recent years, there have been concerns with builders deliberately postponing the completion of construction work in order to cancel a contract using a sunset clause and sell the property at a higher price.
This leaves purchasers at a significant disadvantage because they are unable to benefit from the increase in land value since signing the contract and may find themselves priced out of a higher property market.
Consumer and Business Services is also aware of situations where builders have indicated that they intend to use a sunset clause to terminate a contract, if additional funds are not paid by consumers.
The State Government will also be seeking to require building inspectors to be registered or licensed as that is not currently the case in South Australia despite the enormous responsibilities they have to potential home-buyers.
Also on the agenda is a better and more cost-effective dispute resolution process.
The government is consulting on a binding rectification order scheme to be administered by CBS. This would be of benefit both to consumers and to builders and developers as it would mean that disputes about defective work could be resolved without having to undertake costly and time-consuming court proceedings.
Alternatively, jurisdiction for domestic building contract disputes could move to SACAT for more efficient dispute resolution.
The proposals, and others contained within the discussion paper will be open for public consultation until 17 January 2025.
As put by Andrea Michaels
We all saw the nightmare that homebuyers at Felmeri experienced and the Malinauskas Government is determined to protect South Australian home buyers from a repeat of that awful situation.
The Malinauskas Government is undertaking the most significant review of South Australia’s building regulations in 20 years because we want to ensure strong protections are in place for South Australians when they are undertaking the biggest investment they will likely make in their lives.
We’ve worked with industry to come up with solutions that will protect consumers and strengthen our state’s building industry without being cost-prohibitive for builders and tradies.
We know that the vast majority of builders do the right thing and these reforms will keep the sector at the top of its game and ensure that consumers have confidence in the industry.
As put by Erin Thompson, Member for Davenport
Residents in my community were left with half-built homes and shoddy common infrastructure after Felmeri’s collapse, and what’s most disappointing is that the pain was completely avoidable. Make sure to have your say.
As put by Will Frogley, Master Builders Chief Executive
We know that the vast majority of builders do the right thing and deliver high-quality, much needed homes for South Australians. Unfortunately, a handful of dodgy operators have hurt consumer confidence in recent times, and this is undermining our efforts to beat the housing crisis.
We support any changes that give consumers the confidence and protections they need to make what will be one of the biggest investments in their lives.
Master Builders has worked closely with the State Government to propose some of these robust measures, such as licensed building inspectors and efforts to resolve disputes quickly and cheaply.
We must instil greater confidence for people wishing to work in and invest in our sector.
