During the Build
Independent Inspector
Unless you are across the relevant building standards it can be useful to have a 3rd party assess the defect you are raising as they can give clear reasons if something doesnt comply with the relevant standards or if the issue that’s raised is a generally acceptable one. They normally inspect your property at different stages (more details are here: Independent Building Inspector)
Building Surveyor
The owner or agent (builder) can assign a building surveyor, the choice is yours.
More details are here: Construction Phase | Building Surveyor
Home Owner Warranty
You are covered to an extent before the build starts and during with the insurance policy that the builder is required to take out for your build.
Failure to commence
The Home Building Compensation Fund provides cover in the event that work isn’t started by the builder, leading to a loss of deposit under the building contract. This is claimable by the homeowner for up to 12 months from the failure to commence the work.
Failure to complete
Up to 20% of the contract price is claimable if the builder fails to complete the work. It is claimable up to 12 months from cessation of the work.
After the Build
Warranty
Its important to familiarise yourself with the NSW Fair Trading acts which protects your rights after your new build home:
After you build or renovate | NSW Fair Trading
Home Warranty Insurance NSW | HIA Insurance Services
13 weeks
Cover: Warranty (Defects and Liability period)
Considered the defects and liability period, these include things like cracks in the wall, gaps in the floorboards, etc.
2 years
Cover: Minor or Non structural defects
Covers most reasonable defects found in the home.
6 years
Cover: Major or Structural defects
From the Home Warranty Insurance Fund definition, the definition is below. It’s important to seek legal advice on this because whats structural can be ambiguous and I wouldn’t go by what one person says, be that the builder who may say it isn’t or another person in the industry.
I had water leaks for 6 years and the builder attempted to resolve these for that period however some builders would stop trying to fix it within the 2 year period.
Structural defect means any defect in a structural element of a building that is attributable to defective design, defective or faulty
workmanship or defective materials (or any combination of these) and that:
- Results in, or is likely to result in, the building or any part of the building being required by or under any law to be closed or prohibited from being used;
- Prevents, or is likely to prevent, the continued practical use of the building or any part of the building;
- Results in, or is likely to result in:
- the destruction of the building or any part of the building; or
- physical damage to the building or any part of the building; or
- Results in, or is likely to result in, a threat of imminent collapse that may reasonably be considered to cause destruction of the building or physical damage to the building or any part of the building.
For the purposes of this definition of a structural defect, ‘structural element of a building’ means:
- Any internal or external load-bearing component of the building that is essential to the stability of the building or any part of it, including things such as foundations, floors, walls, roofs, columns and beams; and
- Any component (including weatherproofing) that forms part of the external walls or roof of the building.
Structural element in relation to a building, means a component or part of an assembly that provides necessary supporting structure to the whole or any part of the building.
Home Owners Warranty
For any work over $20k, a builder is required to provide a homeowners warranty which is an insurance product provided by the likes of iCare. You can calculate the cost of this as an owner however most builders will include this in the base price.
There are limited ways to use this insurance such as:
- Dies
- Disappears
- Becomes insolvent
- Has had their licence suspended due to non-compliance with an order by the NSW Civil and Administrative Tribunal or court to pay the homeowner money
- Business ceases to exist
Its very unlikely that someone will end up claiming on their insurance as all disputes have to go through the builder.
Calculate Cost
HBCF premium calculator for homeowners and builders | icare
Lodging a Complaint
Its important to lodge a complaint if you are close to your 2 and 6 year warranty period. Even if the builder is willing to assist you if they delay things then you lose your protections if you dont lodge a complaint. You get a discretional extra 6 months of warranty when you do this as well. Notify the builder that you are doing this to protect your rights and you are still willing to work with them to resolve the issue.
If your builder is on top of things then lodging a complaint may be discretional on your side.
Once you’ve been notified of your possible claim, it is a good idea to take appropriate action to try and have the original builder/contractor complete and/or fix the defects, by:
- Lodging an official complaint with NSW Fair Trading
- Lodging a claim with NCAT or a court (depending on the build’s value).
You can make a claim at any time, but to successfully submit a claim there must have been a trigger event. As soon as you become aware of a trigger event, it’s important to notify the relevant authority and make a claim.