Building issue intervention

On this page:

Key information
Our intervention powers
Building work covered by these laws
How Fair Trading can help you to resolve building defects
Need further support?

Key information

• The Building Commissioner works closely with Fair Trading to investigate, monitor and enforce compliance for buildings with serious defects or failures.
• These laws currently apply to class 2, 3 and 9c buildings.
• If you can't resolve a building defect with a builder or developer, you can notify NSW Fair Trading.
• For buildings that are not yet complete and do not have an occupation certificate, a prohibition order can be issued when there is a serious defect in one of the key building elements and the developer has been ordered to fix the defects.
• A building work rectification order can be issued where building work was done or is being carried out in a way that might lead to a serious defect or has already caused one. The intention is for the serious defect to be fixed, whether the building is occupied or not.

Our intervention powers

Building defect resolution checklist

The building regulator (the Building Commissioner or Fair Trading) may intervene using the powers available under the RAB Act when the following conditions apply:

1. The building is a class 2, 3 or 9c
2. The issue relates to a serious defect, which must be in one of the 5 key building elements:
   • fire safety systems
   • waterproofing
   • structural issues such as load bearing, foundations, footings, floors, walls or roof
   • building enclosure such as external cladding and façade
   • key services such as plumbing, electrical and lifts.
3. If there is an Enforceable Order made by a court or tribunal about the serious defects, you should give us the details. We will then carefully consider if and how Fair Trading can help.
4. The owners’ corporation (the strata manager or other authorised representative) or building owner has raised the defect with the builder and/or developer but has not achieved a resolution. In this case you must provide supporting evidence when requested.
5. The builder and/or developer are still in business. If the builder or developer are no longer trading, or the builder is unlicensed, a rectification order to fix the defect cannot be made. However the RAB Act provides some additional powers which may be able to identify a pathway to a solution. In addition, in some circumstances disciplinary action may still be taken against the builder.
6. The building age (from date of occupation certificate) is relevant to what Fair Trading can do for resolution, including under the RAB Act. Some defects are caused by a failure to properly maintain a building.

You must have done the following before we can intervene:

1. You must have tried to get the builder to fix the defect. If the tradespeople or practitioners are still onsite, ask for the defect to be fixed. If the defects are not addressed directly through the builder or developer, notify NSW Fair Trading.
2. You must have reported the issue to NSW Fair Trading using the Fair Trading complaint form. Provide as much information and supporting evidence as possible.

Fair Trading may be able to help if the builder or developer is still in business.

For a class 2 buildings only, we need some extra information about the age of the building.

You must also be an authorised representative of the owners corporation - for example a strata manager or chair of the strata committee.

0-2 years since the construction contract was signed
For a class 2 building, if the building was built under a construction contract dated after 1 January 2018 a building bond must be lodged under the Strata Building Bond and Inspection Scheme. The building bond covers defect rectification. You must lodge a claim under the scheme.

After that, we can then assess disputed or unresolved claims under the RAB Act.

2-6 years since the construction contract was signed
For a Class 2 building, you need to submit a defect warranty claim with the builder. Residential buildings less than 6 years old carry a statutory builders’ warranty.

After that, we can assess disputed or unresolved claims under the RAB Act.

6-10 years since the construction contract was signed
For a class 2 building, where the defect was found and claimed within the statutory warranty period, but the issue remains unresolved, we can assess the matter under the RAB Act.

We can help you if you are unsure where your issue fits. Visit Fair Trading or phone 13 32 20 for more options.

What is a serious defect?

The Residential Apartment Building (Compliance and Enforcement Powers) Act (RAB Act) defines a serious defect. It is a serious defect in the common property of the building in one of the five ‘building elements’:

• waterproofing;
• fire safety systems;
• building enclosures;
• structural elements;
• services including electrical, lift, hydraulics, mechanical.

In relation to a building, a serious defect means:

1. a building element that does not comply with the performance requirements of the Building Code of Australia, the relevant Australian Standards or the relevant approved plans, or;
2. a defect in a building product or building element that is from defective design, defective or faulty workmanship or defective materials and prevents the proper use of a building or might cause the building to be destroyed or collapse;
3. the use of a building product (within the meaning of the Building Products (Safety) Act 2017) in contravention of that Act.

It must be in the common property of the building.

Possible intervention outcomes

NSW Fair Trading's Compliance and Enforcement Policy outlines the potential enforcement actions available. These include:

• inspection of the site where necessary;
• the issue of a building work rectification order under the RAB Act or rectification order under the Home Building Act. There may also be penalty infringement notices issued to the contractor but these do not lead to your defects being fixed;
• if the building is incomplete and there is no occupation certificate, a stop work order or prohibition order may be issued, preventing the occupation of the building until serious defects are fixed;
• accepting enforceable undertakings;
• eventually, prosecution.

Be part of Project Intervene to fix your serious defect
We work with a developer to negotiate an agreement or undertaking to fix serious defects in your class 2 residential apartment building. Your building must have been completed within the past 10 years. The developer covers the cost of this work. Find out more about Project Intervene.

We will assess the issue to determine if a site inspection is necessary. If so, an inspector will examine the serious defects or incomplete work and discuss their findings with the relevant people and issue available regulatory orders.

Fair Trading can carry out audits of buildings (occupied or not), monitor and assess compliance for buildings under construction, or at any time within 10 years after an occupation certificate is issued.

Lodging a complaint about serious defects under the RAB Act does not limit compliance actions under other relevant laws such as the Home Building Act 1989, or the Australian Consumer Law (ACL).

While we will use our best efforts, sometimes we cannot resolve the issue. However, the information you provide helps us prevent future occurrences. It also enables data collection so we can apply a more targeted approach in the future.

Prohibition orders

A prohibition order on a class 2, 3 or 9c building can only be issued if no occupation certificate is in place. This means there is a serious defect in one of the key building elements and the developer has been ordered to fix the defects. The certifier cannot issue an occupation certificate until the defects are fixed.

You can check the RAB Act orders register page to see if an order has been issued on a particular building site.

As a result, purchasers can be confident that, once the prohibition order is lifted and the occupation certificate applied for, there will be reduced risks of serious defects in the building.

A prohibition order prevents an occupation certificate from being issued. A copy of the prohibition order is given to the principal certifier for the building, the Registrar-General, the local council and, if the developer is not the owner of the land, the owner of the land.

The prohibition order is lifted when the serious defect has been satisfactorily rectified by the developer and the lifting of the order is published on the public register on the NSW Fair Trading website.

The objective of the prohibition order is to prevent the occupation certificate being issued until defects are remedied. This is because consumers who purchase a property off-the-plan usually have to settle once the occupation certificate is issued.

While the identification of serious defects can lead to the issue of a prohibition order, it does not mean that the defect is permanent or that the defect cannot be remediated. Instead, it is a list of serious defects at a point in time by authorised officers.

Building work rectification orders

A building work rectification order can be issued where building work is being carried out in a way that might lead to a serious defect. It is intended to get that building work remediated so that a serious defect does not arise or if there is already a serious defect, that it is fixed.

The building work rectification contains a list of defects to be rectified to make sure the building complies with the approved design, performance requirements of the Building Code of Australia, or relevant Australian Standards.

The building work rectification order is issued to the developer as described in the Residential Apartment Building (Compliance and Enforcement Powers) Act. This may include the developer, the builder or the land owner. A copy is sent to the owners corporation and it may make submissions about defects but the order is a matter between the Department and the developer who receives the order.

An overview of what generally happens after a Building Work Rectification Order is issued is set out below. However, as the remediation can vary between buildings, the steps taken for your building may be different. This information is provided as a general guide only.

1. The developer will engage various experts at their own expense (e.g. engineer or designer) to undertake investigative work and prepare the proper declared designs, which must be lodged in the Planning Portal. The designs must be completed by a registered design practitioner. In addition, the developer will prepare a remediation plan.
2. NSW Fair Trading will consider the rectification plan with the developer to ensure that it responds appropriately to the issues listed in the Order.
3. The rectification plan will be shared with the owners’ corporation, and the developer will discuss any specific requirements that are needed to undertake rectification work (e.g. providing access to lots or other areas). Where the remediation is done in accordance with an order, the owners corporation must give access to the developer to carry out the work.
4. The rectification work will commence in accordance with the agreed timeframe.
5. NSW Fair Trading will satisfy itself that the serious defects have been rectified appropriately and then revoke the Order. At this point the Order is also removed from the public register on the NSW Fair Trading website.
6. If the work is not carried out, enforcement action will be taken.

Need further support?

Owners corporations

Owners corporations are asked to nominate either their strata manager and/or representative of the strata committee (e.g. secretary, chairperson) to act as the single contact for information related to the rectification work. This will help ensure that progress and issues can be shared and communicated effectively amongst all parties.

General questions

For questions related to the requirements under the Design and Building Practitioner scheme, contact NSW Fair Trading on 13 32 20.

You can also contact Service NSW to ask a question, report an issue or give feedback.

For questions related to lodging documents on the NSW Planning Portal call 1300 305 695 or email [email protected].