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NSW- Definition of Defects

May 13, 2020

The Home Building Act provides the definition of ‘defect’ for determining when claims for a breach of warranty can be made. The term “major defect” replaced the old term “structural defect” in 2015.

Under the Act any “major defect” in residential building work is covered by a 6 year warranty, while defects that don't meet the major defect definition are covered by a 2 year warranty from the date when the works were completed.

What is a major defect?

A major defect is either:

  1. A defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code (or any combination of these), and that causes, or is likely to cause:

    (a) the inability to inhabit or use the building (or part of the building) for its intended purpose, or
         (i) the destruction of the building or any part of the building, or
         (ii) a threat of collapse of the building or any part of the building.

    major element of a building means:

    (a) an internal or external load-bearing component of a building that is essential to the stability of the building, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or

    (b) a fire safety system, or

    (c) waterproofing.
  2. The external cladding of a building, where the building is more than 2 storeys in height, that fails to comply with the performance requirements of the National Construction Code for fire resistance and fire safety.

    The Home Building Regulation was amended in April 2018 (and further amended May 2020 to clarify it only applies to a building more than 2 storeys in height) to include this item as a major defect. It applies to works commenced after 20 April 2018, and to works undertaken before 20 April 2018 where the warranty period (6 years) has not expired.
  3. The use of a building product that is regarded as unsafe and has been prohibited for use as a building product under the Building Products (Safety) Act 2017.

For more information and assistance contact HIA Workplace Services on 1300 650 620