The state 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 at www.yoursay.sa.gov.au/building-industry-review.
