This article about liability for building defects has been supplied by Ben Seccombe and Jarrod Clarke, Mahoneys.
An issue that arises frequently in strata title buildings is building defects. Despite many laws being passed to help consumers with COVID-19 related issues, the responsibility (and time limits) for rectifying building defects have not changed. Bodies corporate and body corporate managers need to monitor and manage building defects very carefully to ensure rights are preserved, and defective building works are identified and rectified on a timely basis.
What is a Building Defect?
A building defect is building work that is faulty or not satisfactory as defined by the Queensland Building and Construction Commission Act. Broadly, work performed must be in keeping with the standards of the Building Code of Australia.
Building defects can be either major or minor. A major defect can be described as a defect that carries a risk of damage or destruction to the building or fundamentally affects the use of the building. A minor defect is any defect that is not a major defect.
The responsibility for rectifying the defect can fall to various parties depending on factors such as the nature of the defect, the location of the defect and the age of the building.
Warranty
The applicable claim periods to the Queensland Building and Construction Commission (QBCC) are 12 months from becoming aware of the defect and
- 12 months from practical completion for minor defects; and
- 6 years and 6 months from practical completion for major defects.
Within applicable claim periods, the builder is responsible to remedy any defects. Enforcement of statutory warranties is overseen by the QBCC.
Claims before the QBCC are to be distinguished from contractual claims, which are a separate right available to aggrieved owners for breaches the contract the developer entered into with the builder. A QBCC claim should be made in the pursuit of rectification of the defect, a contractual claim is appropriate where rectification is not a suitable remedy or the QBCC claim was unsuccessful and must be made within 6 years of practical completion.
Defects with common property and individual lots are both covered by a statutory warranty and the body corporate has the power to bring an action on behalf of a lot owner.
It is important for a body corporate to distinguish between the developer and the builder in pursuing a claim for rectification of building defects. The developer is not necessarily (and often isn’t) the builder and the developer’s obligations are ordinarily limited to the provision of documents to the body corporate.
After the initial six year period, no statutory warranty applies and previous cases have largely removed the capacity for a body corporate to make a claim outside of the statutory warranty period.
Who is Responsible?
After expiry of the statutory warranty period, responsibility for rectifying building defects largely moves to the body corporate.
Bodies corporate have an obligation to maintain the common property and if the scheme was established under a building format plan, any structural elements of a building. Similarly, committees must act reasonably in their administration of the common property. The obligation to act reasonably would extend to the obligation to rectify and identify defects in a safe and timely manner.
Importantly, if a body corporate fails in their obligation and an individual lot suffers loss or damage as a result of that failure, the body corporate may be responsible for resultant damage or harm.
However, as with ordinary maintenance obligations, a body corporate is not responsible for building defects within lots, unless those defects relate to the structure of a building and the building was created in a building format plan.
Mitigating Risk
To avoid risk associated with building defects, bodies corporate should:
- Identify the practical completion date of the building; and.
- obtain a defect report well in advance of the expiry of any timeframes; and.
- action defects identified in the building defect report as soon as practicable, but well before the expiry of the statutory warranty.
This post appears in Strata News #359.
Have a question about liability for building defects or something to add to the article? Leave a comment below.
Ben Seccombe and Jarrod Clarke
Mahoneys
E: [email protected]
P: 07 3007 3753
Read next:
- QLD Q&A Alarm Bells: Doctoring BC Records to Hide Building Defects
- QLD: Fire engineer – Cladding replacement not sole solution
- Queensland Government to ban combustible cladding
- Guide to Body Corporate Building Defects
This article has been republished with permission from the author and first appeared on the Mahoneys website.
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Hi, our buildings have been identified with building issues on our balconies. We are out of the warranty period against the contractor. Body Corp has been fully aware of this issue for years and rather than follow the scope of works provided to them they opted for a cheaper fix. They exceeded the approved amount and then without approval paid another $60k. The balconies are still leaking into our homes. The windows have been placed incorrectly and are draining into “timber” architraves. The body Corp are now putting a motion in at an upcoming EGM that they are rescinding on any costs involved with the window architrave repairs. Shouldn’t they form a part of Body Corp responsibility due to it being a building defect?
Hi Leisa
Thank you for your question.
We have responded to your content on this article: QLD: Q&A Responsibility to Repair Common Property Defects
Hi Robert
Yes, the home builder’s warranty scheme (HBWS) is limited in who it can apply to and will not apply to larger multi-level bodies corporate. For these larger multi-level bodies corporate there is no HBWS that can be relied on.
However, reliance on the HBWS is a separate right to the remediation of defects identified within the relevant time periods. These larger multi-level bodies corporate still have rights to have defects remedied under the building contract and through the QBCC to give directions to the builder to carry out work.
You mention above:
The applicable claim periods to the Queensland Building and Construction Commission (QBCC) are 12
months from becoming aware of the defect and
12 months from practical completion for minor defects; and
6 years and 6 months from practical completion for major defects.
BUT is it not the case that the Queensland Building and Construction Commission’s, Home Warranty Insurance Scheme does not apply to buildings that are over three stories in height?
What warranty, if any, applies, to high rise residential buildings?