When building or renovating a home in New South Wales, both homeowners and builders must understand their rights and obligations under the Home Building Act 1989 (NSW). One of the most important protections offered by the Act is statutory warranties. These are mandatory warranties that apply to all residential building contracts.
In this article, we explain what statutory warranties are, who they apply to, how long they last, and how homeowners and builders can enforce them.
What Are Statutory Warranties?
Statutory warranties are legally implied into residential building contracts by Section 18B of the Home Building Act 1989 (NSW). These warranties include:
- The work will be performed with due care and skill.
- The work will comply with any plans and specifications outlined in the contract.
- All materials provided will be suitable for their intended purpose.
- Unless otherwise specified, all materials used will be new.
- The work will comply with the Home Building Act 1989 and any other relevant laws.
- The work will be carried out diligently and either within the timeframe specified in the contract or, if not stated, within a reasonable time.
- If the work involves the construction of a dwelling, or alterations, additions, repairs, renovations, decoration, or protective treatment of a dwelling, the completed work will result in a home that is reasonably fit for habitation.
- Both the work and the materials used will be reasonably fit for any specific purpose or result the homeowner has made known to the contractor, provided the contractor is aware that the homeowner is relying on their skill and judgment.
These warranties apply automatically in every contract for residential building work.
Who Must Comply and When They Apply
- These warranties apply to residential building work: building a dwelling; alterations, additions, renovations; repairing or protective treatments of dwellings.
- Builders or persons holding a contractor licence (or required to hold one) must provide this work under contract. These warranties are implied into the contract by law.
- Written contracts are mandatory for residential building work over $5,000. More information about contract requirements can be found on NSW Government.
Warranty Timeframes: How Long Do They Last?
- Generally, 6 years for major defects.
- This includes defects that:
- Affect the structural integrity of the building
- Make the building uninhabitable
- Cause a risk of collapse or safety hazard
- Affect key building systems, for example waterproofing or fire safety.
To learn more about major defects see the Building Commission NSW.
- 2 years for all other defects.
- This includes:
- Work that is not completed properly or with due skill
- Cosmetic or surface issues that don’t affect habitability
The period starts from the date when the work is completed, or in the case of certain strata/apartment buildings, when the Occupation Certificate is issued.
Enforcing Statutory Warranties
If defects are discovered within the applicable warranty period homeowners should:
- First, notify the builder as soon as they become aware of any problem. It is important for homeowners to put the details of the defect in writing.
If you are unsure how to do this step the Building Commission NSW has compiled some helpful tips.
- If resolution isn’t reached, the next step is to contact the Building Commission NSW to assist with dispute resolution. Please note that if the issue is already being dealt with by a court or tribunal, the Building Commission cannot intervene.
- If needed, the issue can also be taken to NSW Civil and Administrative Tribunal (NCAT).
It is essential to ensure that any complaint is made within the relevant warranty period. If the warranty period has expired, your options for resolution may be limited.
Cannot Be Excluded or Waived
One of the most important aspects of statutory warranties under the Home Building Act 1989 (NSW) is that they cannot be excluded, waived, or limited by contract.
In other words, any attempt by a builder or contractor to “contract out” of these warranties is invalid and has no legal effect.
Common Disputes and How to Avoid Them
Disputes often arise because builders and homeowners disagree on whether a defect is “major,” minor issues are ignored and worsen over time, or homeowners miss the deadline to lodge a claim.
To prevent these problems:
- Builders should document every stage of the work, maintain clear communication, use licensed trades, and keep detailed records.
- Homeowners should regularly inspect the work, take photos, report issues early and in writing, and stay aware of warranty periods.
- Both parties should keep copies of contracts, certificates, and all written communications.
Legal Tips:
- Builders must understand statutory warranties periods and what qualifies as a major defect.
- Homeowners should seek expert advice to determine if a defect is “major” and ensure reports are made within the warranty timeframe.
For a helpful overview, you can download the official NSW Consumer Building Guide.
Legal Assistance with Statutory Warranties
Statutory warranties under the Home Building Act 1989 (NSW) are foundational protections for homeowners and binding obligations for builders. They apply automatically, cannot be contracted out of, and give you rights for both major and minor defects.
If you’ve discovered defects or are unsure of your rights and obligations, contact us for tailored legal advice specific to your situation.
