Building Defects

  • Over the past few months NSW has experienced widespread and heavy rainfall. This has resulted in increased and prevalent claims against owners corporations, however the recent weather events and delays in construction is no defence to a breach of s106 of the Strata Schemes Management Act 2015 (NSW) (SSMA) or a nuisance claim.

Question: What Happens to your Statutory Warranties If You Do Not Settle or Commence Proceedings Within The Relevant Period?


Answer: You have lost that warranty and your claim will be dismissed and if legal proceedings have been subsequently commenced you could be facing a large adverse costs order, as what transpired below.

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,



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.