Building Defects

The strata industry has a long history of dealing with defective building works and there are some usual suspects, such as water penetration and concrete cancer. However, in recent years, some new types of building defect have risen to prominence. In our experience, the following have become particularly problematic:

 

In a Nutshell

Owner-builder work is presumed to have been completed within 18 months after an owner-builder permit is issued, or earlier if an occupation certificate is issued within that period. 

 

Changes and counterbalancing measures for residential building defects claims

 

Joint venture arrangements
The case of Ace Woollahra Pty Ltd v The Owners – Strata Plan 61424 & Anor [2010] NSWCA 101 provided that where a builder contracted with a non-land owning joint venturer the statutory warranties against the builder were displaced and left real questions on the ability to rely on the home warranty insurance.

Managing costs is an important aspect of building defect claims. The Supreme Court recently considered this.

 

New tool to help owners recover costs in defects claims

Owners corporations often enter into construction contracts with builders, architects, project managers, contract administrators and other contractors, dealing with a wide range of issues, such as adding to or altering the structures erected on the property, repairs and upgrade works.

Owners corporations enter into many agreements not realising the interim relief payment requirements that they may be subject to under the Building and Construction Industry Security of Payments Act 1999 (“the Act”) which do not need to be disclosed in the contract.

Owners Strata Plan 70579 v Midwest Constructions Pty Limited & Ors [2011] NSWSC 429

Obtaining adequate compensation for owners corporations in building defect matters is a specialised task.

 

In The Owners Strata Plan 70579 v Midwest Constructions Pty Limited & Ors the Supreme Court considered an owners corporation’s request to vary a referee’s report to make further allowance for superintendence fees, storage costs, protection of goods costs, a contingency allowance, an increased contract period and scaffolding.

 

Dear Commissioner,

 

  1. INTRODUCTION

I refer to your letter dated 18 July 2014 inviting comment on the draft Home Building Regulation 2014 and thank you for the opportunity to provide a response.

 

In a Nutshell

On 8 October 2014, the High Court in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36 (the Brookfield case) found that a builder did not owe a duty of care to an owners corporation in a serviced apartment complex (not residential building works) where sophisticated parties had negotiated rectification clauses. 

 

In a Nutshell

The anticipated 1 December 2014 commencement date for the Home Building Amendment Act 2014 has been delayed allowing owners corporations some breathing space.