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When is cladding a major defect?

May 21, 2020

As a licensed contractor performing residential building work certain promises, or ‘warranties,’ are made about those works. Claims for breaches of these warranties can be made several years after the works are completed.

A claim that works are defective can be made by the home owner (including a subsequent owner of the premises) 6 years after completion where the defect is a ‘major defect’ and within 2 years for a defect that is not a major defect. Information about the statutory warranties under the Home Building Act can be found here.

What is a ‘major defect’ is defined by the Home Building Regulation. In short, it includes defects in structural components of a building (footings, foundations, walls, floors, beams and the like) as a result of defective design, defective or faulty workmanship and/ or materials, that cause the building, or part of it, to be not fit for its intended purpose. The definition was amended in April 2018 to also include external cladding where it may be combustible.

HIA advocated for the definition, which included external cladding, to be amended shortly after it was introduced in 2018. It was vague and applied to all classes of buildings even though the Building Code of Australia (BCA) permits the use of combustible cladding on certain buildings, such as a timber cottage. 

The Regulation has recently been amended, clarifying that external cladding is only a major defect where the building is more than 2 storeys in height and the cladding fails to comply with the performance requirements of the National Construction Code for fire resistance and fire safety.

For the full definition of a ‘major defect’ under the statutory warranties, see here