My obligations to the owner after completion?
September 09, 2019
Many enquires fielded by Workplace Advisers relate to the builder’s ongoing obligation to a home owner after a job has been completed: for how long do I warrant my work? Am I obliged to go back and fix something that was done 2, 3, or 4 years ago? Is this leak the owner is complaining of my problem?
For all residential building work undertaken, statutory warranties apply to those works. This means that as a contractor you make certain promises to the owner about the works performed under your contract. In a nutshell, the promises are that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract; proper materials will be used; and that the works will result in a dwelling that is reasonably fit for occupation as a dwelling.
How long do the warranties apply?
The owner, or a subsequent owner of the property, may make a claim that you are in breach of a statutory warranty within six years for major defects and within two years for other defects from the date of completion. These warranty periods apply to contracts entered into after 1 February 2012.
For contracts entered into prior to this time, the warranty period is 7 years with no distinct periods for ‘major’ or ‘other’ defects (or previously ‘structural’ and ‘non-structural’).
What to do if a an owner claims under a warranty?
If an owner claims you have breached a statutory warranty you should not ignore the complaint. You should get as much detail about the alleged defect, determine when the works were undertaken (is it within the warranty period) and if so, organise an inspection of the works so you can see first-hand what the problem is. You then need to determine whether the defect complained of relates to your workmanship and /or materials. The use of industry guidance materials like standards and tolerances guides can assist. Fair Trading publishes the Guide to Standards and Tolerances which may be used to determine whether an alleged defect is ‘defective’ or within industry standards.
If you want to challenge the owner’s claim you may need to consider getting expert advice to prove that the work are not defective or not your responsibility.
If you and the owner cannot come to a resolution, Fair Trading’s assistance may be sought through the NSW home building dispute resolution service or the matter may be taken to the NSW Civil and Administrative Tribunal (NCAT). If you are found to be in breach of a statutory warranty you may be required to rectify work or pay monetary compensation.