Dealing with building defects 

In a strata scheme 

A new unit or townhouse comes with time-limited warranties that the building is fit for purpose and has been built with due care and skill. Under NSW home building laws, these protections apply even if they have not been specifically included in the building contract.

Fixing strata building defects can be costly and time-consuming. As time goes on, it may be harder to distinguish genuine defects from ordinary ‘wear and tear’ or maintenance issues, whether on common property or the individual lot owner’s property.

Avoid the pitfalls and help prevent potentially long or costly legal action. Become informed along with your scheme to identify and act on potential defects early to meet the warranty timeframes.

Tips to protect your building from defects 

To help identify potential defects, have them fixed quickly and keep your building in good condition, your scheme can follow these tips and recommended actions.

Request a ‘maintenance schedule'

Some developers and builders provide information for the owners corporation on what is needed to manage and maintain the building. Such documents include items like guarantees and manuals for equipment, plumbing, lights, swimming pools and lifts (check with your strata managing agent or secretary if they have a copy).

Consider maintenance activities  

Your owners corporation must have a ‘10-year sinking fund plan’ detailing how they will repair and maintain common property. It is good practice to review it yearly at the annual general meeting (AGM).

Stay in communication with the developer and builder

Raise concerns about problems or potential defects as soon as you become aware of them.

Prioritise potential defects

The owners corporation must reach a timely agreement on how to deal with potential defects. It should discuss and decide on the matter at the first AGM. Defects should then be discussed in regular strata meetings.

Agree within your owners corporation on an expert to do a defects inspection

Decide on a suitable expert at your regular strata meetings. The inspection of your building should be conducted between 12 and 18 months after the building is complete (from when the relevant occupation certificate is issued) with the aim of identifying any building issues. There are a number of industry associations who can help you choose an inspector.

Be aware of warranty time periods for major and all other defects

Read more about this in the section below. 

Understand the dispute resolution process

Like all home owners, strata residents are protected by the NSW Home Building Act 1989 and guarantees under the Australian Consumer Law. For concerns about defects in your building, contact the builder or developer. If the issue cannot be resolved, a lot owner or an owners corporation representative can contact NSW Fair Trading for assistance on 13 32 20.

Know who is responsible for particular repairs

Your owners corporation is responsible for common property defects. Lot owners are generally responsible for internal fittings and fixtures. For help understanding the differences, visit our Common property and the lot web page.

Understand warranties 

Discussing, identifying and fixing potential defects early within the established warranty timeframes will help your scheme protect its assets.

Key time periods

The key warranty periods and dates are:

• A 2-year statutory warranty covering all defects (for all building contracts entered into after 1 February 2012) and 6-year warranty for ‘major’ defects from the date the building work was completed.
• When your strata building is 'complete'. 
  • For new strata buildings, the work is ‘complete' on the date the occupation certificate is issued (the occupation certificate that allows occupation and use of the whole building). Your warranty periods start when this certificate is issued.
  • In a development with many buildings, separate buildings used independently may have different completion dates. To check when the relevant occupation certificate was issued for your particular building, you can contact your local council.
• When claims must be first raised.
  • The developer or builder must be notified of a potential defect as soon as you become aware of it. For common property defects, this is the owners corporation’s responsibility.
  • To secure your rights under the warranties you must commence legal proceedings within the relevant warranty period (2 years or 6 years).
  • If the defect only becomes apparent in the last 6 months of the warranty period, the law provides a further 6 months (from the end of the warranty period) to commence legal proceedings. A defect becomes apparent when the home owner becomes aware, or ought to have become aware, of the issue.

What is a defect?

A defect must result from defective design, defective or faulty workmanship, defective materials or a failure to comply with the structural performance requirements of the National Construction Code.

What is a major defect?

A two-step test decides if a problem is a ‘major defect’ asking:

1. Is the defect a major element of the building? (a fire safety system, waterproofing, or something key to the building’s stability or structure; eg. foundations, footings, walls, roofs, beams or columns.
2. Will the defect cause or be likely to cause part or all of the building becoming uninhabitable or unable to be used for its intended purpose? Or, will the defect cause or be likely to cause the collapse or destruction of the building, or part of it?

To be considered a major defect, it must meet the criteria of the first step, then the second step. An example may be that waterproofing has not been properly installed on a building rooftop, and water has entered the building leading to walls, windows and floor beams being ruined. This passes the first step as it is considered to be a major element as it relates to waterproofing. It should also pass the second step as it could cause, or be likely to cause, the destruction of the building or part of it. It is therefore likely to be considered a ‘major defect’ and covered under the 6-year warranty.