When engaging a contractor to perform residential building work in New South Wales, homeowners are automatically protected by a powerful set of legal guarantees known as statutory warranties. These warranties, enshrined in the Home Building Act 1989 (NSW) (the Act), provide critical consumer protection and ensure that all residential building work is completed to an acceptable standard. This article provides a clear overview of these protections and what homeowners need to know.

What Is Section 18B?

Section 18B of the Act implies key statutory warranties into every contract for residential building work. These warranties apply whether or not they are written into the contract. The law ensures that licensed contractors, or individuals who are required to be licensed, adhere to minimum standards of quality, timeliness, and compliance. These warranties also extend to developers and even owner-builders in some circumstances.

Overview of Core Statutory Warranties

Under Section 18B of the Act, the following warranties are implied into every residential building contract:

  1. Workmanship and Compliance

    The contractor warrants that all work will be completed with due care and skill, and in accordance with the plans and specifications set out in the contract.

  2. Material Quality

    All materials provided must be good and suitable for their intended purpose and, unless otherwise agreed, must be new.

  3. Legal Compliance

    All work must comply with applicable legislation, including the Act and other relevant laws and regulations.

  4. Reasonable Time

    The work must be carried out diligently and within the time stipulated in the contract, or if no time is specified, within a reasonable time frame.

  5. Habitability

    If the work involves constructing or renovating a dwelling, it must result in a structure that is reasonably fit for occupation.

  6. Fit for Purpose

    If the homeowner makes a specific purpose known to the contractor and relies on their skill and judgment, the work and materials must be reasonably fit for that specified purpose.

Homeowners’ Legal Rights

Protection from Waiver

One of the most important features of Section 18B of the Act is that these warranties cannot be excluded, waived, or modified by any term in the contract. They are guaranteed by law.

Time for Enforcing the Warranties

If there is a breach, homeowners can bring a claim under Section 18E of the Act. The warranty period for initiating proceedings is:

  • 6 years for breaches involving major defects, and
  • 2 years for all other defects.

These periods start from the completion of the work, or if the work is not completed, from the earlier of the contract termination, cessation of work, or the contract date.

Under Section 48MA of the Act, courts are required to give preference to rectification by the responsible party as the primary remedy. This ensures that contractors are given an opportunity to fix the issue before other remedies such as damages are pursued.

Transferable Rights

By law, the statutory warranties are not limited to the original homeowner as they extend to subsequent owners, meaning the protections “travel” with the property, benefiting future purchasers.

Important Considerations for Homeowners

  1. Courts will prioritise repairs by the original builder, ensuring that the defect is addressed directly before any other legal remedies are considered.
  2. Delays can be costly. If the relevant limitation period expires, the right to enforce these warranties may be lost. Prompt legal advice is essential.
  3. Homeowners must provide evidence of the alleged breach, which may include expert reports, photos, or written complaints.
  4. These warranties apply only to residential building work and only where the builder is licensed or required to be licensed.

Section 18B of the Act provides robust protections to homeowners in New South Wales by imposing key statutory warranties on all residential building contracts. Understanding these rights, and how to enforce them, is essential when defects or delays arise in construction. 

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.