Building defects and statutory warranties
Six years for a major defect, two for everything else.
General information about the law in New South Wales. It is not legal advice, it does not take account of your circumstances, and no solicitor–client relationship arises from reading it.
The warranties
Section 18B of the Home Building Act 1989 (NSW) implies warranties into every contract to do residential building work: that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, that materials will be good and suitable for the purpose, that the work will be done "in accordance with, and will comply with, this or any other law" (s 18B(1)(c)), and that the work will result in a dwelling reasonably fit for occupation.
The periods
Section 18E(1): proceedings for breach of a statutory warranty must be commenced within six years for a breach that results in a major defect, and within two years in any other case, running from the date the work was completed.
What is a major defect
Defined in s 18E(4): a defect in a major element of a building attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code, that causes or is likely to cause the inability to inhabit or use the building for its intended purpose, the destruction of the building, or a threat of collapse. Waterproofing failures and fire safety defects commonly qualify. Cosmetic and finishing defects do not.
Who can sue
The warranties run with the building. A successor in title has the same rights as the original owner, so a purchaser can enforce against the builder even without a contract. In a strata scheme, the owners corporation enforces in respect of common property.
What preserves the right
- The date of completion of the work is established first, because every period runs from it.
- Expert evidence is obtained early. Scott Schedules require defect-by-defect particulars and costings.
- Written notice of the defects and access to rectify are ordinarily given. Refusing reasonable access can reduce recovery.
- Correspondence does not stop time running. File before the period expires, even if negotiations are on foot.
If this is your situation
The strata page sets out what the work involves and what it costs, and the fee list gives the figure for every step.
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