NCAT’s Jurisdictional Limits in Building Defect Matters

Last Updated on 17/04/2026 by Damin Murdock

The NSW Civil and Administrative Tribunal (NCAT) is the primary forum for resolving residential building defect disputes under the Home Building Act 1989 (HBA). NCAT can determine claims involving monetary damages, rectification of defective work, and other remedies connected to the residential building work.

A key feature of NCAT’s jurisdiction is the monetary limit imposed by s 48K of the HBA, which caps the Tribunal’s power to award damages at $500,000.

The Monetary Cap Applies Only to Damages

The statutory cap applies only to claims seeking monetary compensation. It does not restrict NCAT’s ability to make rectification orders, even where the costs of the required work exceed $500,000. 

How NCAT Applied This Principle in the Case of In Style Developments

In The Owners – Strata Plan No 93227 v In Style Developments Pty Ltd [2023] NSWCATCD 154, the builder argued that the matter should be transferred to a court because the rectification work was likely to exceed $500,000.

NCAT declined to transfer the proceedings, and the Tribunal confirmed:

• The $500,000 cap only applies to damages; and
• Rectification orders are not subject to any monetary cap.

What Orders can NCAT Make?

Under s 49O of the HBA, NCAT can make a range of orders including:

• Payment of money (damages, debt, restitution or refund);
• Rectification of defective building work;
• Performance of services; and/or
• Compliance with contractual or statutory obligations.

These powers are broad to enable NCAT to provide outcomes based on the circumstances of each dispute.

Rectification as the Preferred Remedy

Section 48MA of the HBA requires NCAT to approach defective building work on the basis that rectification by the responsible party is the preferred outcome, provided it is practical.

In assessing whether rectification remains appropriate, NCAT may consider:

• The builder’s capability to perform the work;
• The nature and extent of the defects;
• The relationship between the parties; and
• The owner’s confidence in the builder.

If rectification is no longer practical or appropriate, NCAT may instead award damages, and at that point, the $500,000 cap becomes relevant.

What does a Builder do if a Money Order or Work Order is Made

Orders made by NCAT are referred to Fair Trading to ensure they have been complied with. Oftentimes, an NCAT order will specify the date that the builder must comply with the orders. If those owners have not complied with the orders, Fair Trading may suspend the builder’s licence until evidence of compliance has been provided. Such evidence is generally compliance certificates, payment receipts, or similar. The builder is required to then email Fair Trading at HBS_NCAT@customerservice.nsw.gov.au with that evidence. 

If a Builder Fails to Comply with a Work Order

Where a builder does not comply with a rectification order, the owner may apply to NCAT to have the matter relisted, and seek orders for NCAT to vary the rectification order into a money order. Once the claim becomes one for monetary relief, the NCAT’s jurisdictional limit applies.

Once NCAT makes a money order, the owner may apply to the Local Court or District Court to enforce the NCAT order as a court judgment, enabling the owner to take enforcement proceedings. 

What This Means for Everyday Homeowners and Builders

For most residential building defect disputes, NCAT will be able to hear the matter, even where the defects are extensive or the rectification work is likely to be costly. The $500,000 limit only becomes relevant when a party is seeking damages rather than rectification. If the homeowner wants the builder to fix the defective work, NCAT can generally deal with the dispute regardless of the estimated cost of repairs.

However, if rectification work is no longer appropriate, and if the relationship has broken down or the builder is not capable of carrying out the work, the claim may shift to one for monetary compensation. Once that happens, NCAT’s $500,000 cap applies and may limit the damages the Tribunal may award.

If you have any questions, feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.

DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.