Property Building Defects – Who’s Responsible For What?


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Last year’s Christmas Eve unfortunately wasn’t a time of giddy anticipation for the residents of Sydney’s Opal Tower. After hearing loud bangs, cracks started to show in their walls, ultimately leading to a complete evacuation of the building amidst fears that it would collapse.

Since then, a government report has found that the reason for the damage was poor building works, and while these can be repaired, every strata owner in the country probably asked themselves: Who pays for those repairs? And what happens if there is a building defect in my strata property? Today, we will look at what is considered a building defect and who is responsible in which situation.

What are building defects and what subtypes exist?

An issue with a building only counts as a building defect if it is a result of defective design, faulty workmanship, substandard materials or non-compliance with the structural performance requirements of the National Construction Code.

Australian law differentiates between two types of defects. Anything that doesn’t make a building uninhabitable or dangerous to live in is considered a minor defect. This includes things like hairline cracks, stained walls, or loose tiles.

Major defects are those that pose a significant risk to the habitability of your building, such as the structural issues at Opal Tower, fire safety risks or a problem with waterproofing.

Who is responsible for what defects?

Usually, for a period of time, the builder who carried out the defective work is liable to correct the defects at no extra cost to the owners corporation. However, there are situations where a builder attempts to shirk responsibility, goes into administration or simply cannot be found again. In these cases, the developer could be held liable  for rectifying the defects. Additionally, developers are required by law to set aside 2% of the project costs as a bond to cover exactly these types of repairs.

When it comes to responsibility and liability for building defects, time is of the essence. There are certain statutory warranties in place to protect owners from having to bear the cost of defective building works immediately after completion. The period in which the developer or builder is responsible for correcting minor defects is two years, while it is six years for major defects.

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What your next steps should be

If you have discovered defective work in your strata building, the first step is to contact your strata committee or strata manager as soon as possible, especially if the defect looks major. Apart from initiating measures like the evacuation at Opal Tower, they will then have to get a report on what exactly causes the issue and, once that is done, request that the builder and/or developer rectify the problem.

If the party responsible refuses to correct the problem, there are multiple steps you can take: first, you can go to NSW Fair Trading, where a Rectification Order can be issued. However, if that is ineffective, you can take legal action through the NSW Civil and Administrative Tribunal.

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