Handling Building Defects

The Australian community has been battling the crisis of dealing with defective building rectifications showing a staggering figure of more than 85% of newly constructed buildings with defects with varying levels of severity.

Every Owners corporation has a duty and obligation to repair and maintain the common property, including fulfilling its responsibilities to rectify all inherent building defects.

As a rule of thumb, it would be advisable that the Owners Corporation should seek legal advice before taking any action against a builder, an insurer or a unit owner.

A building defect is a fault or imperfection arising from the design and or construction of a building. In a broad sense, defects can be measured against objective criteria such as the Australia Building Codes, the Australian Standards and the reasonability test.

In general, building defects can be associated with:

Identify defects using expert detailing as to why the workmanship or materials are defective.
Issue preliminary notice to the builder of the development to rectify defects identified.
If the builder fails to rectify defects and if Owners Corporation determines to pursue the builder for defects, it must pass a special resolution under the Owners corporations Act 2006 before filing the claim in VCAT or Court
Raise a levy to fund the action and/or make an insurance claim; or

The Acts of Parliament that apply to a building defect claims in Victoria,

which are the Domestic Building Contracts Act 1995 and
Building Act 1993

Statutory Warranties & Prompt Action by the Owners corporation

It’s important to know that the statutory warranties are the time periods with strict expiry dates that govern products, services (or even standards) to which they are deemed suitable for the purpose.

For building defects, statutory warranties set the periods that allow Owners corporations or individual owners to bring an action against the builder or developer who would be liable for defective work.

According to professional legal experts, following simplified time frames is applicable, even though statutory warranties begin with the ambiguous concept called ‘Practical Date of Completion’.

Minor Building Defects	2 Years
Major Building Defects (Standard)	6 Years
Major Building Defects (Under certain contractual conditions)	7 Years
Major Building Defects (Defect not apparent and negligence claims)	10 Years

Defect Management Planning is essential.

Commission to have a building defect report as early as the first anniversary of the Owners Corporation by the original owner, the developer. This report will then be tabled at the AGM for consideration.
If not, the appointed committee at the following AGM, the issue of building defects by first making for such item in the budget for any precision building reports.

Obtaining Building Defect Reports

Comprehensive precision reporting for core building systems includes: