Home Building Tips for Builders in NSW
Commercial Building Work and the Law

Many licensed builders tend switch between doing residential and commercial building work as part of running their business.

A common question asked is: When doing ‘Commercial Building Work’, what laws are different when compared to Residential Building Work?

What is Residential Building Work?

We first need to understand what ‘residential building work’ is before we can determine what is considered to be ‘commercial building work’.

Under the Home Building Act 1989 (NSW), “residential building work” means:

“Any work, or work involving the co-ordinating or supervising of that work where that work is:

• the construction of a dwelling; or
• the making of alterations or additions to a dwelling; or
• the repairing, renovation, decoration or protective treatment of a dwelling.”

Under that same Act, a “dwelling” is “a building or portion of a building that is designed, constructed or adapted for use as a dwelling (such as a detached or semi-detached house, transportable house, terrace or town house, duplex, villa-home, strata or company title home unit or residential flat).  It includes any swimming pool or spa constructed for use in conjunction with a dwelling.”

There are also a number of ‘inclusions’ and exclusions’ to the meaning of a ‘dwelling’ – this information can be accessed from our Online CPD Course Builders Summary of the Home Building Act or by contacting NSW Fair Trading.

What is Commercial Building Work?

Once we have established what is considered to be ‘residential building work’, then the rest is simple – Commercial Building Work is EVERYTHING ELSE.

If the building work you intend to do is not considered ‘residential building work’, then it is considered ‘commercial’ in nature and is not covered under the Home Building Act 1989 (NSW).

What laws are different with Commercial Building Work?

Under the Home Building Act 1989 (NSW), the following THREE main obligations are imposed on licensed builders who are preparing to do residential building work:

1. Licensing – the builder and all contractors must be licensed as issued by NSW Fair Trading
   
   
2. Contract Requirements – there must be in place a written contract that complies with the Act
   
   
3. Home Warranty Insurance – this insurance must be taken out for work that exceeds $12,000

The seven (7) year statutory warranty period also applies.

However, where you are preparing to do Commercial Building Work, the above three legal obligations do NOT apply, in that:

1. Licensing – persons on-site are not required to hold NSW Fair Trading licences
   
   
2. Contract Requirements – there is no requirement to have a compliant written contract in place with the client, although it is recommended that legal arrangements are documented in the form of a contract, particularly for larger projects
   
   
3. Home Warranty Insurance – this is not required, although you should always have in place other business insurances, including construction liability

Although the seven (7) year statutory warranty period does not strictly apply, the commercial building works must still be performed in a proper and workmanlike manner.

All other laws relating to safety, local council requirements and the environment will still apply regardless of whether the work is residential or commercial in nature.

UPCOMING CPD SEMINARS All of our CPD Seminars are 6 hours in length and allow you to claim 12 CPD Points in ONE DAY. Builders now have nine (9) different CPD Seminars to choose from.

To REGISTER for a CPD Seminar, complete the attached Registration Form or visit www.homebuildingonline.com.au

Online CPD Courses

We have 4 NEW Online CPD Courses to choose from – a total of 24 Online CPD Courses that are now available for builders in NSW.

Listed below are our available Online CPD Courses – click on an Online CPD Course to view further information about that Course:

1. Liability of Building Professionals - NEW
   
2. Construction Management Tips - NEW
   
3. Safety Hazards On Site (Part A) - NEW
   
4. Safety Hazards On Site (Part B) - NEW
   
5. Project Management
   
6. Preparing Business Documents
   
7. Financial Management
   
8. Going Green with Building Sustainability
   
9. Builder’s Summary of the Home Building Act
   
10. Security of Payment Laws 
    
11. Do It Yourself Debt Recovery
    
12. Tendering Tips in Home Building 
    
13. Home Building Contracts in NSW 
    
14. Dealing with Sub-Contractors      
    
15. Running a Small Building Business 
    
16. Tax Summary for Small Business
    
17. Tips on Playing the Building Game 
    
18. Basics of the Employment Relationship            
    
19. Basic Contract Law            
    
20. Fair Work Laws – A Summary 
    
21. Handling Home Building Disputes 
    
22. Understanding Workers Compensation 
    
23. Builder’s Guide to OHS 
    
24. Bullying on the Building Site

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