Under a home building contract, when the works performed by the builder are found to be defective or incomplete, the builder has an obligation to rectify the defective works. This usually occurs after a certain pre-agreed time frame after the completion. Whether you are a homeowner or a builder dealing with a new build or a renovation, understanding your rights and the builder’s obligations can make all the difference in how effectively you resolve such issues.
Builder’s Primary Obligation to Rectify
Across the Australian construction industry, the most preferred and primary response to defective building works is to rectify the identified defects by the builder. In section 48MA of the Home Building Act 1989 (NSW) (the Act), when a dispute arises, the Court or Tribunal has to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome. Similarly, in Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067 it was held that it is usually the preferred that the builder would be given a reasonable opportunity to rectify any defects identified.
Builders are generally expected to carry out rectification works, the same way as the statutory warranties under the Act, with due care and skill, ensuring all work meets the agreed specifications and standards, and within a timely and reasonable manner.
Standard Rectification Process
Step 1: Notification of Defects
The process begins when the homeowner formally notifies the builder of the identified defects. Many construction contracts stipulate a specific timeframe in which this must occur after a practical completion or handover. Timeliness is critical, as delays may affect the builder’s obligation to rectify.
Step 2: Builder Response
Upon receiving notification of defects, the builder typically has a specified period, often around 14 days depending on your home building contract, to inspect the reported defects and provide a response. This may include:
- acknowledging the defects;
- proposing a schedule for repairs; and
- making a commercial offer to resolve the issue, such as through alternative compensation or negotiation.
Step 3: Execution of Rectification Work
Depending on the builder’s resources and the nature of the defect, they may personally carry out the repairs or engage suppliers or subcontracted tradespeople to complete the rectification.
It is essential that all repairs conform to the original contract specifications and are completed to an acceptable industry standard.
Alternatives to Builder Rectification
While builders to repair the defective works are the preferred outcome, they are not always appropriate or feasible. Alternative outcomes may arise where:
- the builder refuses to rectify;
- the relationship between the parties has irreparably broken down; and/or
- previous rectification attempts were substandard or incomplete.
In such cases, homeowners may pursue:
- monetary compensation for the cost of repairs by another party;
- third-party rectification, where another contractor is engaged to perform the necessary rectification work; and/or
- legal proceedings, especially where negotiations fail and defects remain unresolved.
Key Considerations in Rectification Disputes
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Severity and Nature of Defects
The more serious and widespread the defects, the greater the likelihood that extensive repairs, or alternative resolutions, may be necessary.
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Builder’s Conduct
Courts and tribunals will examine the builder’s:
- past responsiveness to defect notices;
- quality and reliability in addressing previous defects; and
- general approach to customer service and dispute resolution.
A pattern of unresponsiveness or poor workmanship can weigh against allowing the builder a further chance to rectify.
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Evidence
Detailed and written record is essential, which often includes the following:
- photographic evidence of defects;
- copies of written notifications to the builder;
- records of any correspondence or response timelines; and
- multiple lists of defects, if the concerned issues persist or recur.
Navigating defects in building work can be complex, but the law clearly places the initial responsibility on the builder to rectify the issues. However, this process depends heavily on the surrounding circumstances, including contractual terms, the severity of the defects, and the conduct of both parties.
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 social media accounts.
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.
