How long is a builder responsible for defects in NSW?

What do the statutory warranties cover?

Every contract for residential building work in NSW carries a set of promises from the builder known as statutory warranties. They come from the Home Building Act 1989. They apply even when the contract never mentions them and no clause can take them away.

The builder promises that the work will be done with due care and skill and in line with the plans and specifications. Materials must be good, suitable for their purpose and new unless the contract says otherwise. The work must comply with the law and be finished within the agreed time, leaving a home that is reasonably fit to live in. The NSW Government's guide to building contracts sets out each warranty in plain terms.

These rights stay with the house when it is sold, so a later buyer can rely on them within the warranty period.

Six years or two years: which period applies?

The warranty period is six years for a breach that results in a major defect and two years for everything else. A major defect is a serious fault in an essential part of the home, such as its structure or waterproofing. It must cause or be likely to cause the home or part of it to become unusable, to be destroyed or to be at risk of collapse. Cracked paint, a sticking door or uneven grout would normally sit in the two year group.

Both periods start when the work is complete, which generally means when it meets the completion requirements in your contract. Where the contract does not define completion, the work counts as complete once it can be used for its intended purpose and is free of major defects. The earliest of handover, the occupation certificate or the builder's last day of work other than minor defect repairs can mark that date. A defect that first appears in the last six months of either period gives you a further six months to start proceedings.

What is the defects liability period in a contract?

Most building contracts add a shorter window of their own, called the defects liability period. The NSW Government notes in its guide to keeping new work trouble free that it is usually 13 weeks for a new home, although the length varies between builders.

The Building Commission NSW home building contract for work over $20,000 is a useful benchmark. It sets 13 weeks from completion and asks the owner to list defects in writing within 10 business days after that. The builder then has 30 business days to fix them at its own cost.

This contract period handles the small items that follow any handover. It does not shorten the statutory warranties, so a major defect found in year four can still be pursued within the six year period.

What should you do when you find a defect?

Tell the builder in writing as soon as you notice the problem and keep a copy. The Act expects you to make reasonable efforts to give written notice within six months of a defect becoming apparent. You must also give the builder reasonable access to fix it. A tribunal can take a failure on either count into account when it decides a claim.

If the builder does not respond or disputes the defect, Building Commission NSW runs a free complaint service. Near the end of a warranty period the Commission advises also applying to the NSW Civil and Administrative Tribunal, because your warranty rights lapse once the period has passed.

Two further protections sit behind the warranties. If the builder has died, disappeared or become insolvent, home building compensation cover can pay to fix major defects for six years and other defects for two. The Design and Building Practitioners Act 2020 also gives owners and later owners a duty of care claim for loss caused by defects. The Environmental Planning and Assessment Act 1979 then sets an outer limit of 10 years for a civil action over defective building work. That clock usually runs from the occupation certificate and it never extends the shorter warranty periods, so get advice early rather than counting on ten years.

How we look after a home after handover

At SHORE Design + Build the people who shape a project are the people who deliver it, which carries on after the build. A guided handover walks you through the house, its systems and its warranties. As our process sets out, we return at three, six and twelve months to attend to settlement and defects and we stay reachable in between.

On a design and build project the same firm answers for the design as well as the construction. Our guide to design and build vs an architect and a builder explains how that compares with the traditional route.