HOMEOWNERS AND CONTRACTORS WHO ARE UNABLE TO RESOLVE HOME BUILDING DISPUTE
Are you a homeowner or a contractor who is unable to resolve a home building dispute? Are negotiations and discussions going in circles with no end in sight?
Under the section 18B of the Home Building Act 1989 (NSW), there are statutory warranties by a holder of a contractor licence or a person required to hold a contractor licence, irrespective of whether they are included in a written contract and is in every contract of residential building work.
The warranty applies to the following:
- That work will be done with due care and skill and in accordance with the specifications set out in the contract;
- All materials supplied and used, and in accordance with the contract;
- Applies with Home Building Act 1989 (NSW) and any other law; and
- Work will be done with due diligence and within the time stipulated in the contract or if not stated in the contract within a reasonable time
These statutory warranties cannot be contracted out or excluded by a contractor such as a builder or subcontractor from the contract. Statutory warranties are enforceable for a period of six (6) years after the completion of the work if the breach is a as a result of a structural defect, and for a period of two (2) years for other defects.
Home Warranty insurance
Under the section 92 of the Home Building Act 1989 (NSW), a person must not do residential building work under a contract unless they obtain insurance that complies with the Act. If insurance is not obtained, the contractor is not entitled to damages or enforce any remedy with respect to a breach of the contract by any other party to the contract, in relation to the work (uninsured work). However, the contractor may apple to a court or tribunal to recover money on a quantum meruit basis (reasonable payment for services rendered).
Further, under the section 96A of the Home Building Act 1989 (NSW), a developer must not enter into a contract for the sale of land of residential building work unless certificate of insurance is provided. If the developer contravenes this section, the contract is voidable at the option of the purchaser before completion of the contract.
Different methods of dispute resolution can be sought to settle the matter, rather than court litigation:
- Expert determination
- NSW Civil and Administrative Tribunal (NCAT)
A building compliant may be lodged with NSW Fair Trading where parties are unable to resolve the dispute. The parties must attempt to resolve the issue and agree to the attempt at resolution.
If the dispute relates to a contractual issue such as payment of money or supply of building goods or services, a compliant may be able lodged with the NSW Civil and Administrative Tribunal (NCAT) under section 48I of the Home Building Act 1989 (NSW).
A building inspector may be required to inspect the defects or incomplete work referred to in the complaint. The building inspector will arrange for a meeting with the homeowner and the builder at the site. If the building inspector determines there are defects as a result of the contractors’ work, they may issue a Rectification Order setting out what items require work and a timeframe by which work is to be completed. If either party does not agree with the Rectification Order, they may lodge a claim with the Tribunal.
If you need assistance with a building dispute, you can contact our friendly team for guidance.