Residential Focus: What's new for regulation in the NSW Fair Trading and Building Legislation Amendment Bill 2026

Last month, the NSW Fair Trading and Building Legislation Amendment Bill 2026 was introduced to Parliament proposing a range of miscellaneous reforms relating to licensing and the powers of NSW Fair Trading and the Building Commission, amending over 20 existing Acts. Some of which include, the Home Building Act (HBA), Strata Schemes Management Act (SSMA), Design and Building Practitioners Act (DBPA) and the Building and Construction Industry Security of Payment Act (SOP Act).

The Bill remains in parliament for concurrence with no amendments made during its journey through the houses.

The proposals include:

• replacing the concept of a business day with a working day under the SOP Act, but not the definition, to align it with the Interpretation Act
• amendment of the DBPA to remove the restriction on the regulation making power to exempt building practitioners from professional indemnity insurance. The current regulation making power requires a new regulation every 12 months. The amendment removes that, meaning that the exemption for building practitioners may continue indefinitely, until such time as the market matures sufficiently to offer professional indemnity insurance to building practitioners
• broaden the coverage of Decennial Liability Insurance (DLI), under the SSMA, to respond to a relevant defect, as opposed to a serious defect, taking DLI away from following the nomenclature of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act and closer to the HBA major defect definition. This places DLI closer towards the type of cover which was available under home warranty insurance and its predecessors, in terms of standing behind statutory warranties, albeit only for high rise, multi-unit developments
• remove extraneous references to loose-fill asbestos from the Building Products (Safety) Act, as the public register referred to is no longer being maintained
• increase the powers of NSW Fair Trading and the Building Commission to deal with licences, including additional powers to cancel, suspend or vary licences. In particular, the Building Commission would be empowered to specifically cancel, suspend or vary a licence for holders who are discovered to be unqualified
• establish the Building Administration Fund (replacing the Home Building Administration Fund), a new (broader) fund intended to pay for the costs of resolving building disputes, administering building legislation and generally engage with the industry
• broaden the powers of the Building Commission to obtain information for the purposes of investigating offences and enforcing building legislation
• improve efficiency in two lot strata schemes by reducing the amount of formality required for one owner to issue notices to the other.

Significantly, the proposed amendments to the Bill, suggested after the second reading speech, have not been adopted. Among the proposed amendments to the Bill were proposals to amend the SSMA to:

• replace the prescribed amount of the building bond (capable of variation by amendment to the Regulation) with a fixed two % in the Act itself
• provide for variability of the building bond percentage once the number of DLI providers is more than three.

Those proposed changes would have firstly appeased developers and secondly supported the policy preference towards DLI, as presumably the ability to vary the bond percentage would be exercised to increase the percentage, once the DLI market achieves maturity.

Perhaps that change is best left until the market reflects on the change from serious defects to relevant defects.

That leaves at large the question of whether the building bond increase to three %, a change which has been repeatedly delayed since 1 February 2024, will be deferred once again.