Building Defects: Your Rights and How To Claim

Defects in a new home, renovation or apartment can be expensive, and the law sets strict time limits for doing something about them. In NSW the Home Building Act gives owners statutory warranties that apply even if the contract says otherwise, and later owners usually get the benefit of them too.

Optimum Lawyers is a property law firm in Parramatta Square, led by principal solicitor Wisam Assi. We act on purchases, sales, settlements and transfers in every Australian state and territory.

Statutory warranties in NSW

• Major defects: 6 years from completion of the work.
• Other defects: 2 years from completion.
• The warranties cover work done with due care and skill, in line with the plans and the law, with suitable materials, and fit for purpose.
• They pass to later owners, so buyers of a recently built home may still be able to claim.

The usual steps

1. Record the defects with photos and, for anything significant, an independent building report.
2. Notify the builder in writing and give them access to fix the work.
3. If that fails, lodge a complaint with NSW Fair Trading, which can arrange a site inspection.
4. If the dispute is not resolved, apply to the NSW Civil and Administrative Tribunal or a court, depending on the amount and the facts.

If the builder has gone

For residential work over $20,000, the builder must take out cover under the Home Building Compensation Fund. It may pay if the builder dies, disappears, becomes insolvent or loses their licence. Check the certificate of insurance.

Apartments and strata buildings

The owners corporation usually brings defect claims for common property. For residential strata buildings of four storeys or more, the developer lodges a 2% building bond that can be used to fix defects identified in the final inspection. Claims can also be made against designers and builders under the Design and Building Practitioners Act. See strata lawyers.

Buying a home with defects

Get a building inspection before you exchange, and ask about the age of the work and any warranty or insurance certificates. Defects found later may still be covered if the time limits have not expired.

What clients say

“Wisam has been an invaluable partner throughout both my property buying and selling journeys.”

Katrina Ong, Google review

Questions about building defects

How long do I have to claim for building defects in NSW?

6 years from completion for major defects and 2 years for other defects under the statutory warranties.

Can I claim if I bought the home from the first owner?

Usually yes. The statutory warranties pass to later owners.

What if my builder has gone broke?

For work over $20,000, the Home Building Compensation Fund may cover you. Check the insurance certificate.

Who claims for defects in an apartment building?

The owners corporation usually claims for common property defects.

Related: Strata lawyers | Property dispute lawyers | Contract of sale review