Statutory warranties (ACT)

What are the statutory warranties?

Where a builder carries out residential building work valued at $12,000 or more that builder is deemed by statute to make certain warranties to the owner in relation to that work. Where the original owner transfers title to another the person to whom the title is transferred succeeds to the rights in relation to the statutory warranties.

These statutory warranties compel the builder to guarantee the following:

• That the residential building work is carried out in accordance with the Building Act 2004;
• That the work is carried out in a proper and skillful way and in accordance with the plans approved for the work by the construction occupations registrar;
• That good and proper materials for the work are used in carrying out the work;
• If the work has not been completed, and the contract does not state a date by which, or a period within which, the work is to be completed, that the work will be carried out with reasonable promptness; and
• If the owner of the land where the work is being carried out expressly makes known to the builder, or an employee or agent of the builder the particular purpose for which the work is required, or the result that the owner desires to be achieved by the work, that the work and any material used in carrying out the work is or will be reasonably fit for the purpose or of such a nature and quality that they might reasonably be expected to achieve the result.

How long do the warranties apply?

In the ACT, the Building Regulations 2004 prescribe the period after which statutory warranties will expire. They provide that in relation to a structural element, the statutory warranty will expire 6 years after the completion day for the work. In relation to a non-structural element, the statutory warranty will expire two years after the completion day for the work.

“Completion day” means the day the work is completed or the day the contract in relation to the work ends, whichever is the latter. The work is taken to have been completed no later than the day a certificate of occupancy is issued for the work. However, this is not the only means by which work will be taken to have been completed.

The period in which statutory warranties expire differ between individual states and territories. As a result it is important that every builder is fully informed of their statutory and regulatory obligations before carrying out residential building work in that state or territory.

Warranties not to be excluded

Statutory warranties are implied by law whether or not they are detailed in the contract between the builder and the owner. The operation of these statutory warranties may not be excluded or restricted; any term in a contract seeking to do so will be void.

For more information please call HIA Workplace Services on 1300 650 620

_{DISCLAIMER – the above is intended to provide general information in summary form. The contents do not constitute specific adive and should not be relied upon as such. Formal specific advice should be sought by members with respect to particular matters before taking action.}