Definition of a developer
A developer is any individual, partnership or corporation owning:
- 4 or more dwellings in a building or residential development, either existing or proposed, or
- all residential units in a retirement village or accommodation for people with disabilities, either existing or proposed.
Where residential work is conducted on behalf of another party, such as in a joint venture, both parties are considered developers.
For more information, see the definition of 'developer' in Section 3A of the Home Building Act 1989.
Engaging licensed building businesses
Developers must engage licensed building businesses for home building work.
Before engaging a building business, be sure to verify their licence and eligibility for HBC insurance using the Verify NSW website.
Selling a property as a developer
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Sales before construction begins
The building business you engage must arrange HBC insurance for home building work before the work starts.
Purchasers should be made aware of their rights when buying 'off the plan' or buying land that is not registered. The Building Commission NSW has more details.
If you are selling homes 'off the plan' before construction begins, you do not need to include the certificate of insurance with the contract of sale. However, the contract of sale must inform the purchaser that:
- there is no requirement to provide proof of HBC insurance until the work starts
- you will provide the certificate of insurance to the buyer within 14 days of your builder taking out the insurance
- they have right to cancel the contract of sale before settlement if the certificate of insurance is not provided within the 14-day period.
Buyers may cancel the contract of sale before settlement if proof of HBC insurance is not provided within this timeframe.
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Sales post-construction
If you are selling homes on which the building work has commenced or you are selling homes within 6 years of the completion of work, you must provide each buyer with:
- the certificate of HBC insurance (which must be attached to the contract of sale), and
- the approved HBC insurance brochure (currently the Consumer Building Guide from Building Commission NSW)
If you do not comply with these requirements, you are breaking the law and can be fined.
Refer to Section 96A of the Home Building Act 1989 and Clause 61 of the Home Building Regulation 2014 for detailed requirements.
Developers and contractors may seek an exemption in certain circumstances.
More information for developers
Updated 19 December 2024