When choosing a home builder for any construction project, be sure to enquire about their product and service warranties. In most cases, a home builder is responsible for defects for a certain period of time. The policy and coverage may also vary, depending on the property’s location as well. In this blog post, you will learn everything you need to know about a home builder’s liability for defects. Let’s find out how long can you hold them responsible and the usual process for warranty claims. 

Common Building Defects in Australia

As a new homeowner, it is advisable to familiarise yourself with common building defects. This will help you avoid further property damages and address your home builder for product and service warranties. Here’s a list of the most common residential building defects in Australia:

• Water leaks
• Internal and external wall damages
• Exterior water penetration
• Gutter problems 
• Defective roof covers
• Weak plumbing system 
• Improper tiling installation  

Keep in mind that these defects can significantly affect your home’s overall foundation, including the following:

• Building fabric and cladding
• Fire protection system 
• Waterproofing
• Roof and rainwater disposal 
• Structural system
• Hydraulics 
• Electrical and lighting system
• Mechanical and ventilation system 

Home Warranty Insurance

As mentioned earlier, it is important to know if your home builder offers comprehensive home warranty insurance. This is compulsory in most Australian states, including in New South Wales and Western Australia. Keep in mind that each state has specific policy terms.

How Long is Your Home Builder Liable for Defects?

According to Consumer Protection WA, the construction company or home builder may be liable for defects for up to 6 years upon receiving the occupancy permit or certificate of final inspection.  The warranty should also take effect, even if the property has been sold several times. 

If you see any signs of property defects, be sure to inform your home builder right away to address the problem. You can also reach out to your local council to learn more about warranty claims. For any discrepancy with your builder regarding your claim, consult your legal counsellor. 

In some cases, domestic building insurance may cover the repair cost for property defects. It can cover repair costs for up to $16,000 for 6 years in case the home builder has died, disappeared or got bankrupt. 

Building Defect Claims in Australia

Here are the key issues related to building defect claims in Australia. Again, claim policies may vary depending on the state you’re in. 

• Building Work Completion 

First, you need to determine your property’s date of completion to carefully assess whether your defect claims are still valid. For new homes or new buildings, the basis will be the issued certificate of completion by your builder or construction company. 

• Contractual Defect Liability Period

Many construction companies and home builders in Australia offer a defect liability period that can last up to 24 months upon project completion. In New South Wales, builders are not allowed to remove or limit rights to a statutory warranty. 

• Statutory Warranties

Reputable home builders or construction companies usually provide their clients with statutory warranties. Having these warranties also shows that your builder is confident in the quality of their workmanship. Here’s what they usually include in statutory warranties:

• The builder or construction company ensures that the project will be done carefully according to the specific plan and requirements set out in the contract.
• The builder or construction company ensures that they will comply with the local building codes, including the Home Building Act 1989.
• The builder or construction company ensures that all materials and equipment they will use are suitable for the project. Additionally, all materials they will use should be stated in the contract.
• The builder or construction company ensures that they will follow the timeline given in the contract. If there’s no time indicated, at least the project will be accomplished within a reasonable time. 

Key Reminders Before You Build Your Custom Home

The entire custom home project can be overwhelming, especially for first-timers. Keep in mind that paperwork is vital to any custom home-building project. Here’s what you should do before the project starts: 

• Examine their builder’s warranty. Talk to your prospective custom home builders and be sure they will explain to you the warranties they offer in detail. A reputable building company should provide their clients with a copy of the written document of the warranties they offer. 
• Try to document the progress of the project, including any changes from the original plan. This will help you support your claims in case there will be discrepancies in the future.
  
• Always ask your custom home builders to present you with all legal documents, including building permits, licences, a certificate of eligibility and a certificate of insurance.
  
• Double-check their credentials and eligibility by contacting your local government. Take time to search them online, as well as to find out more about their services.
  
• Check if their workers are all insured. Most states in Australia require employees, including contractors and subcontractors, to have public liability insurance.

How Long is the Defect Period on a New Build?

Home builders usually provide their clients with a defect liability period. This is to allow owners to check and address work defects. The period may vary, depending on the size of the project, but usually, it can go up to 24 months for a new custom home project. 

What Happens if a Builder Damaged My Property?

You may seek compensation from your builder in case they caused damage or loss to your property. Be sure this is clear in your contract to avoid discrepancies in the future. 

The Bottom Line

Custom homes are huge investments. Avoid future problems by hiring the right home builder. Don’t make hasty decisions when hiring a home builder. Be sure they can present you with all the legal documents, including their licence and warranties. 

Are you still looking for a custom home builder you can trust? Distinguished Homes is a leading building company in Perth with over 10 years of industry experience. Our proven track record speaks volumes about the quality of our products and services. Build your dream home today! Call us now to get an estimate!