{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Housing industry insights Economics Data & forecasts Tailored research and analysis Advocacy & policy Advocacy Policy priorities Position statements Submissions News and inspiration Industry news Member alerts Media releases HOUSING Online
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder & manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies & tool insurance Planning & safety solutions Building & planning services How can safety solutions help you? Independent site inspections Solutions for your business Contracts Online HIA Tradepass HIA SafeScan Advertise jobs Trusted support & guidance Contracts & compliance support Professional services Industrial relations Member savings Toyota vehicles The Good Guys Commercial Fuel savings See all
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials & products Concrete, bricks & walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes See all
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Frequently asked questions Study with us Find a course to suit you Qualification courses Learning on demand A job in the industry Get your builder's licence Continuing Professional Development (CPD) Find jobs
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Mates rates Get involved Become an award judge Join a committee Partner with us Our initiatives HIA Building Women GreenSmart Kitchen, bathroom and design hub Get to know us Our members Our people Our partners Support for you Charitable Foundation Mental health program
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Awards program People & Business Awards GreenSmart Australian Housing Awards Awards winners Regional Award winners Australian Housing Award winners 2024 Australian Home of the Year Enter online Industry events Events in the next month Economic outlook National Conference Events calendar
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping & delivery Purchasing T&Cs See all Products Purchase NCC 2022 Building codes & standards Economic reports Hard copy contracts Guides & manuals
About Contact Newsroom
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Change location
{{propApi.text}} {{region}} Change location
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Dealing with subcontractor defective works

When building a new house or undertaking a substantial renovation, it is common to have many trades involved, with the builder subcontracting parts of the work to subcontractors.

What happens if you discover during the build, or after completion that your subcontractor has completed work that is incomplete, defective, or does not meet the specifications that you provided? 

Key facts

  • Statutory warranties that apply to builders in NSW for residential building works also apply to subcontractors.
  • It is recommended that there is a contract between builders and their subcontractors.  However, even if a written contract does not exist, it is implied that works will comply with industry codes and standards and in accordance with any plans and specifications provided.
  • If a subcontractor’s work is defective, incomplete, or otherwise has issues, you should notify the subcontractor and provide the subcontractor with an opportunity to respond. 
  • Evidence of an alleged defect may be required if the subcontractor disputes that their work is defective.
  • A builder may be able to seek an order that the subcontractor rectify the defective works (or pay compensation) via the NSW Civil and Administrative Tribunal (NCAT).


My subcontractor has completed their scope of works.  I have inspected the works and found the work to be sub-standard or defective.  What do I do?

Whilst there is no set procedure, builders should consider following these steps when communicating issues with subcontractor completed works: 

1. Notify the subcontractor of the issue  

You should notify the subcontractor of the issue in writing (in addition to any verbal notifications).  This is to ensure that there is evidence that the subcontractor has been informed of the issue and has a reasonable opportunity to respond and/or conduct rectification works. 

It is a good idea to indicate a time frame within which the subcontractor needs to respond and/or rectify the issue. 

2. Advise the subcontractor of what you might do if they do not rectify the work

If final payment has not been made, you may consider holding that until the issue is resolved (subject to the terms of your contract). 

Ensure you outline in writing your reasons for non-payment especially if the subcontractor’s invoice is a payment claim under Security of Payment laws (a Payment Schedule may need to be prepared).

You may also warn the subcontractor of what you intend to do next should they not respond or return to rectify their works.  This might include seeking quotes from alternative contractors to rectify the works, which you may seek to recover from the subcontractor if additional costs are incurred.

3. Obtain evidence that works are defective or incomplete

If the subcontractor disputes that the work is defective, be prepared to provide evidence that the works are defective or sub-standard.  This may include photographs, reports from independent experts or other contractors.  

It is also important for you to keep a record of all communications with the subcontractors in relation to the incomplete or defective works.  This may include evidence of the defective works, letters of demand, notices requiring the subcontractor to inspect and rectify those works, as well as the responses from the subcontractor.

The owner of a house I built 3 years ago is complaining of waterproofing issues.  I subcontracted those works to a waterproofer.  Can I tell the owner to call him? 

No, unless the waterproofer entered into a separate contract with the homeowner, it is your responsibility to inspect the works.  You contracted with the homeowner and provided a warranty regarding the works completed, including any subcontracted works such as waterproofing. 

Accordingly, it is your responsibility to investigate the complaint to determine if there is a problem with those works.  However, you should still contact the subcontractor and seek their assistance whilst investigating the complaint. 

If the works are found to be defective, you as the builder would need to rectify the problem for the homeowner.  This may include pursuing the waterproofer to meet their warranty made to you. 

What if subcontractor works are defective but they refuse to come back to rectify?

If the subcontractor refuses to rectify the works, you may need to consider takings matters into your own hands to resolve the problem. 

However, before taking any legal action, you should take all steps to try work out the issue between you and your subcontractor.  Additionally, consider what impact this dispute may be having on the homeowner such as whether it is delaying the projects completion. 

If you are forced to rectify the works, ensure that you retain evidence supporting your claim against the subcontractor should you decide to pursue the subcontractor in a court or tribunal.

Where can I go to pursue a subcontractor for defective work? 

NSW Fair Trading provides a dispute resolution service for home building disputes. However, this assistance is not available where the dispute is between builder and subcontractor. 

The NCAT is a tribunal that can hear and determine building claims including defective works claims by a builder against a subcontractor.  It can make orders for rectification of the works, or an order to pay money (such as compensation where the builder has already rectified the works).  

A builder may also consider action via other means such as the court system to seek compensation where there has been a breach of contract (works not performed in accordance with the contract).

Seek independent legal advice before commencing any form of legal action.

To find out more, contact HIA's Contracts and Compliance team

Email us

Share with your network:
More articles on:
{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find the latest expert advice, guides and much more!

Building it right topics


Can’t find what you need, check out other resources that might be closer to the mark.

2022 National Construction Code - Volume One

Product comes in an A4 binder and will be mailed to you once it's purchased online. Volume One of the National Construction Code (NCC) relates to commercial buildings – Class 2 to Class 9. The code details technical provisions for...

2022 National Construction Code - Volume Two

Product comes in an A4 binder and will be mailed to you once it's purchased online. Volume Two of the National Construction Code (NCC) relates to residential buildings – Class 1 and Class 10. The code details technical provisions ...

2022 National Construction Code - Volumes One and Two

Product comes in an A4 binder and will be mailed to you once it's purchased online. This pack contains Volume One (commercial buildings – Class 2 to Class 9) and Volume Two (residential buildings – Class 1 and Class 10) of the Nat...

HIA Guide to NCC Livable Housing Provisions

This resource provides practical examples of applying the new requirements and explains common solutions and methods that may assist building practitioners to meet the new requirements for house and apartment designs.

HIA Guide to Waterproofing

Guidance provided by HIA on the changes to waterproofing of wet areas requirements and what they mean for common solutions and compliance.