Introduction:
Protections for apartment buyers in NSW, already ahead of other states in consumer safeguards, have been reinforced by a High Court ruling. The decision limits developers and builders from shifting liability for defects to subcontractors and consultants.

Key Points for Builders and Developers:

• Expanded Duty of Care:
  Under the Design and Building Practitioners Act 2020, developers and builders in NSW are directly responsible for ensuring work is free of defects. They cannot apportion liability to subcontractors, architects, or certifiers when sued by apartment owners.

• Streamlined Claims Process:
  The decision makes it easier and faster for apartment owners to seek compensation, as they no longer need to navigate prolonged litigation involving multiple parties.

• Increased Responsibility:
  Builders and developers must ensure subcontractors perform their duties correctly. They remain liable for defects, even if caused by subcontractors.

• Industry Impact:

  • Developers face increased risks and higher costs for insurance and financing, potentially affecting project viability.
  • Builders must adopt stricter quality controls to mitigate risks.

Notable Quotes:

• Bronwyn Weir, Construction Lawyer:
  “This provides a much more streamlined process for owners to pursue compensation. That’s a big win for owners that won’t exist in the other jurisdictions in the absence of this legislation.”

• Tom Forrest, CEO of Urban Taskforce:
  “In the middle of a housing supply crisis, we cannot afford additional burdens on the cost of a regulatory system which simply transfers responsibility... onto builders and developers.”

Key Statistics:

• NSW legislation follows the high-profile Opal and Mascot Towers failures.
• NSW leads the nation in consumer protections, with other states lagging behind.

Takeaways for Builders:

• Accountability: Builders must ensure all parties involved in a project adhere to high-quality standards to minimise liability.
• Risk Mitigation: Strengthening quality assurance processes and documentation is crucial to reducing exposure to costly disputes.
• Adaptation to Regulation: The ruling may increase upfront costs, but it also incentivises defect-free construction, potentially reducing long-term litigation risks.

This decision underscores the importance of quality in construction, urging builders and developers to refine practices and ensure compliance with the state’s leading consumer protection standards.

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