Home Building Act provides obligations on Builders to undertake residential building work in accordance with the Statutory Warranties. A breach of the Warranties gives rights to the party who has the benefit of those Warranties to claim damages and losses resulting from a breach of the warranty

12/02/2024

Watson & Watson are highly experienced Lawyers having acted on behalf of Home Owners, Builders and Developers for many years in relation to building issues that arise on a regular basis during the construction process including claims relating to defective or incomplete works including claims for losses resulting from breaches of Statutory Warranties under the Home Building Act.

Statutory Warranties are implied in every Contract to do residential building work.  The Statutory Warranties are provided for in Section 18B(1)(a)-(f) of the Home Building Act which allows for a claim to be made in certain circumstances by the person that has the benefit of the statutory warranties against the person or entity that is required to provide those Statutory warranties.  These Statutory Warranties include warranties that:

(a)      the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract;

(b)      all material supplied will be good and suitable for the purpose for which they are        used;

(c)      the work will be done in accordance with, and will comply with the Home Building Act;

(d)      the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time;

(e)      that if the work consists of the construction of a dwelling, the making of alterations or additions to the dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling; and

(f)       that the work and any material used in doing the work will be reasonably fit for the specified purpose or result.

The Statutory Warranties are not only provided by the Principal Contractor or Builder which is provided for in Section 18B(1) but also similar Statutory Warranties are implied in Sub-Contracts between the Principal Contractor and a Sub-Contractor for work or any part of the work for the Principal Contractor relating to residential building work.

Section 18C of the Home Building Act provides that a person who is an immediate successor in title to the Owner Builder, a holder of a Contractor’s Licence, a former holder or a Developer who has done residential building work on land, is entitled to the benefit of the Statutory Warranties as if the Owner Builder, holder, former holder or Developer were required to hold a Contractor Licence and had done the work under a Contract with the successor in title.  A common successor in title who has rights in relation to any breach of the Statutory Warranty is a purchaser of the property from the original Owner, who had residential building work undertaken at the dwelling.

The Home Building Act provides more particular limitation periods in which a person or entity who has the benefit of the Statutory Warranties to commence proceedings against the person or entity that is responsible in accordance with the provisions of the Home Building Act. 

We refer to our article 12 April 2021 in relation to changes as to the limitation period in relation to “major defects”.  Critically

Section 18E(1) of the Home Building Act provides:

(a)      A breach of a statutory warranty must be commenced (in the appropriate Tribunal or Court) before the end of the warranty period for the breach. 

(b)      A warranty period is 6 years for a breach that results in a major defect in residential building work or 2 years in any other case. 

(c)      The warranty period starts on completion of work to which it relates but this does not prevent proceedings from being commenced before completion of the work.

(d)      If the work is not completed the warranty period starts on:

i.         the date the Contract is terminated; or

ii.        if the Contract is not terminated the date on which the work under the Contract ceased;

iii.       if the Contract is not terminated and work under the Contract was not commenced the date of the Contract.

(e)      If the breach of warranty becomes apparent within the last 6 months of the warranty period proceedings may be commenced within a further 6 months after the end of the warranty period.

(f)       A breach warranty “becomes apparent” when the person entitled to the benefit of warranty first becomes aware (or ought reasonably have become aware) of the breach.

At Watson & Watson our highly experienced Building and Construction Lawyers have been acting for Homeowners, Builders and Contractors for in excess of 30 years and can assist you in relation any matters pertaining to building and construction issues including contractural issues and obligations in relation to the Statutory Warranties.  Careful consideration and action in a timely manner is important in relation to any potential claim you may have.  Please contact Richard Watson, Accredited Specialist Commercial Litigation specialising in Building and Construction or his Personal Assistant Shereen Da Gloria to discuss your matter and seek appropriate and timely advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.