The scope of defects that will be covered as part of ten-year insurance offerings for owners of new apartment buildings is set to be clarified in New South Wales under new laws which have been introduced into Parliament in that state.

And regulators will be given more powers to cancel licenses, block unsuitable licensees in the conveyancing sector, hold private certifiers to account and cancel specific licenses in the home building sector.

The NSW Government has introduced the Fair Trading and Building Legislation Amendment Bill 2026 into the state’s Parliament.

The Act seeks to amend 22 separate Acts which concern the state’s Better Regulation and Fair Trading and Building portfolios.

This includes sectors such as building, property, motor vehicle dealerships/repairers, consumer goods & services and areas where licenses are needed (hairdressers, pawnbrokers etc.).

It aims to close loopholes and to give property and building regulators more power to protect consumers.

A key part of the changes involves amendments which aim to facilitate development of 10-year decennial liability insurance (DLI).

Introduced by the former Liberal/National Coalition with bi-partisan support in 2022, DLI is insurance which is intended to be offered to owners of apartments in new or newly constructed buildings.

It is intended to deliver financial protection for owners to cover rectification costs for serious defects which are identified as a result of non-compliant building work over the first ten years after an occupancy certificate has been issued.

It is intended focus only on defects which are serious in nature and could jeopardise the building’s structural integrity or occupant safety. This includes defects relating to the building’s structure, fire safety, cladding/façade, waterproofing or services (mechanical/electrical/plumbing etc.).

Upon its introduction, it was intended that DLI would be brought to market as an alternative to the more restrictive protection which is currently afforded to apartment owners in NSW through the state’s developer bond scheme.

However, no such product has yet been approved or brought to market.

To help facilitate the development of viable DLI offerings, the new bill aims to clarify the type and scope of defects that DLI is intended to cover.

Specifically, it inserts a definition of a ‘relevant defect’ for the purpose of decennial insurance into the state’s Strata Schemes Management Act 2015.

The new definition reflects the intended purpose of DLI which is to provide coverage where noncompliance-related defects result in damage, risk of death or serious injury.

Other amendments contained in the bill include:

  • Giving NSW Fair Trading and Building Commission NSW clear powers to refuse applications or cancel licenses obtained through misrepresentation, error or invalid qualifications.
  • Strengthening NSW Fair Trading’s ability to block unsuitable or irresponsible applicants in the conveyancing sector, while closing loopholes that prevented the regulator from stopping professionals with a history of misconduct from entering the industry.
  • Give the Building Commission NSW stronger powers to hold private certifiers accountable for misconduct even if they leave the industry, preventing them from avoiding sanctions by surrendering or letting their registrations expire; and
  • Provide the Building Commission NSW with new powers to cancel specific authorities on home building related licenses, such as joinery, or painting, rather than having to cancel the entire licence.

The new legislation comes as New South Wales has undertaken a significant program of reform to improve the quality and safety of the state’s buildings over recent years particularly in the apartment sector.

This follows serious structural failures which occurred in Sydney’s Opal Tower in 2018 and Mascot Tower in 2019.

The changes also come as New South Wales has been tasked with delivering 377,000 new homes in well-located areas over the five years from 1 July 2024 until 30 June 2029 under the National Housing Accord.

NSW Minister for Better Regulation and Fair Trading and Minister for Building Anoulack Chanthivong welcomed the new legislation.

“Consumers deserve to have the utmost confidence in the professionals handling some the biggest financial decisions of their lives,” Chatviong said.

“These reforms tighten the rules for property and building professionals, by ensuring they can be held accountable for their actions before they enter the industry and after they leave.

“As we work towards our targets under the National Housing Accord, we want to make sure we are raising the standard across the construction and development sector.”

“By providing our regulators with stronger powers, we are also ensuring those with a track record of misconduct cannot simply rebrand and re-enter the industry.

“The changes to legislation for Decennial Liability Insurance will also bring NSW one step closer to operationalising a scheme set to provide homeowners with nation-leading defect insurance.”

 

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