Effective 1 March 2021, the Building and Construction Industry Security of Payment Regulation 2020 (NSW) Schedule 2 has introduced important consequences for owners and builders on all residential building in NSW where the owner occupies or plans to occupy the home at the end of the project ('homeowner projects'). This change also impacts the ABIC Simple Works H NSW contract. These changes mean administering homeowner projects has changed and NSW architects need to be aware that:
- The limitation in the Home Building Act (NSW) that only stage progress payments were authorised no longer applies to homeowner projects. This means that monthly progress claims and payments are once again permitted in building contracts for homeowner projects. This includes typical projects under an ABIC SW H NSW contract.
- The NSW Security of Payments regime now applies to homeowner projects. This benefits the builder's rights to secure timely payment. If a builder serves an SOP claim and invoice, the homeowner/client needs to be aware of the time frames and procedures in the NSW Security of Payments legislation.
This change to the SOP legislation doesn't directly affect the standard ABIC payment claims and assessment time frames and procedures. However, architects should be aware that an SOP claim is a matter between the builder and the homeowner. It can present a professional risk if architects attempt to handle an SOP payment claim or dispute on behalf of their client. If you or your client receives an SOP claim or invoice, you should recommend that your client seeks legal advice. Refer Acumen note Security of payment - NSW.
The ABIC authors are planning to revise the ABIC Simple Works H NSW contract to reinstate the familiar ABIC-standard monthly progress payments, which will bring it in line with the Major Works H NSW contract.
The 2018 revised editions of the Australian Building Industry Contracts (ABIC) Major Works (MW), Simple Works (SW) commercial and domestic are provided below. Information about the ABIC contracts including which contract to use, FAQs and differences between the SW and MW contract, are available on the ABIC contracts page. For a revised edition of the ABIC Basic Works (commercial) contract refer to ABIC Basic Works BW 2018.
Note: The ABIC MW and SW user guides have been updated for the new Corporations Act / insolvency laws that will affect all contracts and in particular Section Q of the ABIC contracts. For an explanation of the changes refer to Termination rights and insolvency events.
Search for and buy contracts through our Online store.
Update: Changes to the Home Building Act 1989 and regulations (HBA), effective 1 July 2018 affect some of the consumer protection requirements and the home building compensation cover. These obligations fall on the contractor under the legislation and may not necessarily require the architect to complete or administer the contract in any different way. The ABIC authors have made updates to the NSW H contracts so they meet these new requirements. From 21 August 2018, all contracts published and sold will be the updated editions. All contracts signed before 1 July 2018 can continue to be used and administered.
These changes to the Home Building Act (NSW) have been updated in July 2020, including a new consumer building guide issued by NSW Fair Trading. The NSW H contracts remain current, but the updated consumer building guide is included in new contract packs sold and can be downloaded separately from the links below.
Major Works Contract for non-housing in New South Wales
Major Works Contract for housing in New South Wales
ABIC MW 2018 H NSW Reference copy
ABIC MW 2018 H NSW Template forms
ABIC MW 2018 H NSW Information statement
Consumer Building Guide (July 2020 update)
Simple Works Contract for non-housing in New South Wales
Simple Works Contract for housing in New South Wales
ABIC SW 2018 H NSW Reference copy
ABIC SW 2018 H NSW Template forms
ABIC SW 2018 H NSW Information statement
Consumer Building Guide (July 2020 update)
A table of changes has been prepared detailing ‘2015 changes to NSW Home Building Act and the consequential amendments to ABIC 2008 SW H NSW and ABIC 2018 SW H NSW’ and is applicable to the revised ABIC 2018 SW H NSW contract. Download the table here.
Information for housing (domestic)
Under the Home Building Act 1989 and regulations (HBA), projects for residential building work with a contract price of more than $20,000 must use a HBA-compliant form of contract like the SW H NSW or MW H NSW. Both contracts adopt stage payments prescribed by the HBA, instead of the ABIC standard monthly progress payments.
Under the HBA, residential building work is the construction of a dwelling, or alterations or additions to a dwelling, or repairing, renovation, decoration or protective treatment of a dwelling. A dwelling is any building intended to be used as a dwelling, such as a detached or semi-detached house, terrace or townhouse, duplex, villa-home, strata or company title home unit or residential flat.
The SW H NSW and MW H NSW contracts provide a mechanism for the owner to pay the contractor a deposit. The deposit amount is a pre-payment of the contract price, capped to limits specified in the HBA. See the User Guide for more information on the deposit limits and how the mechanism for payment works under the ABIC 2018 contracts.
ABIC 2008 MW and SW versions withdrawn from sale and use
Effective September 2019: The ABIC 2008 versions of MW and SW are no longer published and have been withdrawn from sale and use. They have been replaced with the 2018 revisions of MW and SW, which were released in April 2018. The ABIC co-authors no longer give copyright permission for anyone to use the 2008 versions (and 2011 versions in Queensland) of the ABIC MW and SW contracts, subcontracts, User Guides, the associated ABIC supporting documentation, nor the related Acumen guidance (the ABIC 2008 Materials). The ABIC co-authors do not give anyone permission to use, adapt, modify, reproduce nor communicate the ABIC 2008 Materials, unless permission is given under an express licence. Any such use is a breach of copyright and at a user’s own risk. The Institute no longer provides customer support or guidance about the ABIC 2008 Materials and we encourage all users to purchase and use the 2018 contracts and related supporting documents.
Disclaimer
This content is provided by the Australian Institute of Architects for reference purposes and as general guidance. It does not take into account specific circumstances and should not be relied on in that way. It is not legal, financial, insurance, or other advice and you should seek independent verification or advice before relying on this content in circumstances where loss or damage may result. The Institute endeavours to publish content that is accurate at the time it is published, but does not accept responsibility for content that may or has become inaccurate over time. Using this website and content is subject to the Acumen User Licence.