A recent decision in Wu v Commissioner for Fair Trading [2024] NSWCATOD 161 reinforces key considerations for granting Owner Builder Permits (OBPs) for dual occupancy projects. The case clarifies that the intent behind the OBP scheme is to avoid the development of dual occupancies for commercial purposes, such as generating rental income. In Wu, the applicant sought an OBP to build a dual occupancy dwelling, intending to live in one and rent out or provide accommodation for family in the other. Despite being a licensed builder, the applicant was reluctant to incur the cost of Home Building Compensation Fund (HBCF) insurance.
The Tribunal upheld the rejection of the OBP application, noting that the intent to house family members or generate rental income did not constitute exceptional circumstances. The Tribunal emphasized that no financial hardship was shown and that the development could proceed without the OBP, either by the applicant’s company or another licensed builder. This decision is consistent with the overarching goal of the OBP regime, which restricts such permits to non-commercial, owner-occupied developments. In contrast, an earlier case, Hammoudi, allowed an OBP where the applicant’s need was based on providing accommodation for a family caregiver, with no intention to subdivide or profit commercially from the development.
Looking ahead, the draft Building Bill 2024 introduces more flexibility, giving the Secretary discretion to approve OBP applications where exceptional circumstances are shown. However, the Bill’s provisions on secondary dwellings could signal a narrowing of exceptions for dual occupancies, potentially limiting the scope for owner-builders in this area.