Why it’s important to understand building defects
What are building defects, how major and minor defects are classified?
Certainty
Despite being complicated, it’s important to understand building defects and why they are so prevalent. One significant factor that contributes to making defects a challenge for committees and owners is that they are considered an accepted part of the building and construction process. The major concern about defects is not that they occur, as they are inevitable. The issue with defects is the extent, severity, and impact they have on owners and the value of buildings.
Here is everything you need to know about common building defects:
- What is a building defect, and how are they defined?
- Defining a major defect in a strata property
- Shifting legislative frameworks for managing building defects
- Contracts and legal advice matter
To support understanding Australia’s national building crisis, this article aims to help explain the where, how, and why, multi-owned properties in Australia so commonly suffer from defects. It’s important to understand building defects because having known about them allows committees and owners to respond to defects more effectively, saving time and money.
Defects within community living require collective action to fix the issue and to retain the property’s value. Providing easy to understand information may increase the success rate of legal recourse and rectification processes; this is why it’s important to understand common building defects.
What is a building defect, and how are they defined?
A building defect can range from a minor imperfection to a major structural fault that jeopardises the stability of the entire building.
Legal definitions for defects are rarely consistent across jurisdictions (that is, they can differ across each state and territory). Inconsistent definitions have been attributed to why the building and construction industry has suffered from an inability to reduce defects to a satisfactory level.
For Australia, standards for building defects are defined across a range of legislative documents, including home building or building Acts, the National Construction Code, the Building Code of Australia, and a range of other state-specific Acts, Regulations, and Codes — such as plumbing, electrical, and gas codes. If a building, or part of a building, doesn’t meet legislative standards or breaches a building contract, the issue could be considered a defect.
However, there are degrees of tolerance around standards that affect whether a building issue will be considered a defect or not, and to what degree. Each state has its own building standards and tolerances guide which set the acceptable standards of workmanship in building construction. Following standards and tolerances guides are a great starting point for assessing an issue. The guides provide a step-by-step process of assessing variations.
- New South Wales guide to standards and tolerances
- Queensland guide to standards and tolerances
- Victorian guide to standards and tolerances
What constitutes a building defect and how it is legally defined is important for committee members and owners wishing to initiate legal action. How a defect is legally classified will determine whether it is a major or minor defect.
Did you know?
Allowing for a defect to be classified as “major”, means it is easier for committees and owners to make a claim against a builder or developer. It also means they are covered by a ten or six-year warranty period rather than the two-year warranty period that applies for minor defects.
Defining a major defect in a strata property
When a major element such as an internal or external load-bearing component that is essential to the stability, fire safety systems or waterproofing of a building is defective due to: design, inadequate workmanship, faulty materials or a failure to comply with the structural performance requirements of the National Construction Code. And therefore, causes or is likely to cause:
- The inability to inhabit or use the building for its intended purpose
- The destruction of the building
- A threat of collapse to the building
- The threat to the safety of any occupants of the building if a fire occurs due to internal or external cladding.
Shifting legislative frameworks for managing building defects
Given the extent of Australia’s defects crisis, state legislative frameworks are starting to shift to give committees and owners greater protection. For example, the Supreme Court in some states has declared that the definition of a major defect should be interpreted more broadly. Traditionally, a narrow approach has been taken which generally excluded most defects that didn’t fit into the classic definition.
For example, a balcony with waterproofing problems may be causing significant issues. However, it is not causing enough issues that the building may collapse, be destroyed, nor trigger an inability to inhibit it. Situations such as this example, often meant the issue wasn’t considered a major defect and owners were stuck with the cost of fixing the issue. Now, however, state courts are trying to change that.
Contracts and legal advice matter
When it comes to defects, expert help is key. It is important to seek legal advice when interpreting the Acts and Regulations that define defects in your state. Acts and Regulations are drafted and written in a way that requires expert interpretation. There are also different levels of flexibility applied to regulations depending on where you are in Australia. So remember, if you think you understand a regulation or legislation, it might mean something different in a court of law.
It is also useful to remember when it comes to defects and contracts, it is common for builders and the customer to contractually agree on the standards for that particular building project — they decide together what’s appropriate and what’s not. However, while applicable standards can be agreed upon, no one can contract out of legislation and legislatively set standards. Therefore, those undertaking the work can not apply standards lower than those required by building regulations.
Legal advice should also be considered because of the pace at which legislation is changing around defects. For example, New South Wales recently saw a host of new legislation — such as the Design and Building Practitioners Act 2020 — come into play. This new powerful legislation means builders owe a duty of care to owners and gives owners the rights
to claim for defective building work that traditionally wasn’t legally covered.
The complex nature of defects and the many moving parts to a successful rectification process is why it’s important to understand common building defects.
Important note
Generally, most defects that fall outside of the definition of a major defect are considered minor and therefore have a two-year statutory warranty. It’s important to know the date your statutory warranty is taken from as this can vary. For example, it is most often taken from the date your occupancy certificate was issued. This might mean you now have less than two years. Committees and owners should always seek legal advice to firm-up how long they have on their statutory warranty and to start proceedings against the builder or developer.
If you’d like to find out more about building compliance for your strata property, download our FREE Community Living guide. Or for a consultation to review your common property insurance by our CommunitySure insurance team, click here.