What counts as a major defect in NSW?

How does the Home Building Act define a major defect?

Section 18E of the Home Building Act 1989 sets a three part test that a defect has to meet in full. First, the defect must be in a major element of the building. Second, it must come from defective design, faulty workmanship, defective materials or a failure to meet the structural performance requirements of the National Construction Code.

Third, the defect must cause or be likely to cause one of three results. The first is that you cannot live in or use the home or part of it for its intended purpose. The others are the destruction of the building or part of it and a threat that some or all of it will collapse.

The Act adds two other routes. The regulations can name further kinds of defect as major. Using a building product in breach of the Building Products (Safety) Act 2017 also counts as a major defect in its own right.

Which parts of a home are major elements?

The Act lists four kinds of major element. The first is any internal or external load bearing part that keeps the building stable, including foundations and footings, floors, walls, roofs, columns and beams. The others are fire safety systems, waterproofing and any further element the regulations prescribe. Building Commission NSW lists the same elements when it explains how it handles defect complaints.

What is the difference between a major defect and other defects?

The difference lies in the consequence, which means two faults in the same element can fall on different sides of the line. A hairline crack in a rendered wall is usually a finish issue. A crack caused by a moving footing may be a major defect, because it goes to the stability of the house.

icare, which runs the Home Building Compensation Fund, gives serious structural problems and serious water leaks that damage the building as examples of major defects. Its example of an other defect is a non structural problem such as poor finishes. The NSW Government makes the same distinction in its guide to new home warranties, where minor defects mainly affect the appearance or finish of a home.

The builder answers for breaches of the statutory warranties either way. The label decides how long you have to enforce them, so it is worth getting right early.

Why does the major defect label matter?

A breach of the statutory warranties that results in a major defect can be pursued for six years from completion of the work. Every other defect has two years. If a defect first appears in the last six months of either period, you have a further six months to begin proceedings.

The same periods apply to home building compensation cover, which steps in when the builder has died, disappeared or become insolvent. A major defect can therefore still be covered in year five, when a finish issue would have fallen outside both the warranty and the insurance.

Whether a fault is major is a question of fact, so an owner who suspects one should start with a written report from an independent building consultant. That report gives the builder, Building Commission NSW or the NSW Civil and Administrative Tribunal a clear basis for deciding which period applies.

How we approach defects on the homes we build

On a design and build project the same team answers for the design and the construction. Our architect and builders work in the same studio. We coordinate the structural, hydraulic and other consultants while the design takes shape. Our builders price it as it develops, which brings questions about how a junction will be built forward to the drawing stage.

After handover we return at three, six and twelve months to attend to settlement and defects. Our guide to design and build vs an architect and a builder explains how responsibility for defects sits on each route.