Defective building work rarely announces itself on handover day. Waterproofing failures and non-compliant work often emerge years later — which is exactly why NSW law gives rights that survive completion.
Residential building work in NSW carries statutory warranties: work must be done with due care and skill, in accordance with plans and specifications, using suitable materials, and result in a dwelling reasonably fit for occupation. These warranties apply automatically — they cannot be contracted out of.
Builders and others who carry out construction work owe a statutory duty of care to owners — including subsequent owners — to exercise reasonable care to avoid economic loss caused by defects. This has significantly widened the path to recovery, particularly for strata schemes.
Warranty periods run from completion of the work: six years for major defects, two years for other defects. Duty of care claims have their own limitation periods. Missing a window can extinguish an otherwise strong claim — owners who suspect defects should get advice early.
Yes. Owners corporations can pursue statutory warranty and duty of care claims for defects in common property, and frequently do.
Claims may still lie against developers, and in some cases insurance or other parties involved in the work. Insolvency narrows the field — it doesn't always end the claim.
Under the Home Building Act 1989, a “major defect” is defined in section 18E(4) and involves a two-part test. First, the defect must occur in a “major element” of the building — this includes internal or external load-bearing components essential to the building's stability (such as foundations, footings, floors, walls, roofs, columns, and beams), fire safety systems, waterproofing, or any other element prescribed by the regulations. Second, the defect must be 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, and it must cause, or be likely to cause, one of the following: the inability to inhabit or use the building (or part of it) for its intended purpose, the destruction of the building (or part of it), or a threat of collapse of the building (or part of it). A defect will also be treated as major if it is of a kind prescribed by the regulations, or if it involves the use of a building product in breach of the Building Products (Safety) Act 2017.
Under the Design and Building Practitioners Act 2020, section 37 introduces a statutory duty of care requiring any person who carries out construction work to exercise reasonable care to avoid economic loss caused by defects in or related to a building for which the work is done. This duty applies broadly to builders, designers, project managers, and other parties involved in construction work, regardless of whether the work was carried out under a contract with the owner or otherwise. The duty is owed to each owner of the land on which the construction work is performed, and to every subsequent owner, giving property owners a direct avenue to pursue compensation even where they had no contractual relationship with the practitioner responsible for the defect.
If you suspect defective work in your home or scheme, we can assess what you can claim and against whom — before time limits close in. Contact our team to discuss your matter.
This publication is intended as general information only and does not constitute legal advice. Please seek independent legal advice before acting on anything contained in it.
Liability limited by a scheme approved under Professional Standards Legislation.
