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Home Building and Construction Disputes

Disputes in relation to residential building and construction work are unfortunately common. They can include disputes involving building defects or the terms of a building contract. Home building and construction disputes can be resolved either in or outside of court. The former includes the alternative dispute resolution methods of mediation, conciliation and arbitration. The process of litigation is the process of resolving disputes in a court. There are also pieces of Legislation in NSW that provide for statutory relief in property disputes involving building and construction defects and securing payment for building work.

Statutory Warranties and the Home Building Act.

The Home Building Act 1989 (NSW) provides the legislative regime for the construction of residential home and includes home warranties, how contracts are written, insurance and licensing of construction

A person who contracts with a builder to build a home is entitled to sue the builder a home is entitled to sue the builder pursuant to the contract for building defects. In effect a statutory warranty extends this right to the successor in title, in other words, people who subsequently own the house and did not contract with the builder. All of the statutory warranties that apply to residential buildings are contained in section 18B of the Home Building Act 1989 (NSW).

Section 18B of the Home Building Act 1989 (NSW) outlines various warranties that are implied in all contracts for the completion of residential building work. These are referred to as statutory warranties. Statutory warranties relate to things such as the quality of work completed, obligations to complete work with due diligence and within reasonable time.

There are also various provisions within the Home Building Act 1989 (NSW) that must be complied with when commencing proceedings for the breach of a statutory warranty. A building and construction lawyer is experienced in home building and construction disputes and can assist you in commencing these proceedings.

How can a Lawyer help me?

A building and construction lawyer can explain the legal rights and obligations conferred by building contracts and legislation. They can identify the nature of any disputed defects and explain the legal entitlements associated with these.

The lawyers at Brander Smith McKnight can provide advice in relation to specific legislation that can assist in a building dispute, such as the:

  • Home Building Act 1989 (NSW)
  • Building and Construction Industry Security for Payments Act 1999 (NSW). Also known as SOPA
  • Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW)
  • Design and Building Practitioners Act 2020 (NSW)

The team of highly experienced building and construction lawyers at BSM can provide legal remedies to resolve a building and construction dispute. These include specific performance, damages, injunctions and rectification orders. Where a dispute can be resolved by negotiation it is important to know your legal rights prior to developing a negotiation strategy. We have the experience to advise you.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

Dispute Resolution Options

Fair Trading Inspection

Obtaining a building inspection from Fair Trading NSW can be an effective way to resolve a dispute between a property owner and a builder relating to poor or defective work. An inspector will assess the aspect of the building that is the subject of the dispute and discuss the issues relevant to the dispute with the parties. A FairTrading NSW inspector can determine whether a builder should be held responsible for a building defect. If an inspector determines that a builder is responsible for a defect, they can issue a rectification order which can compel a builder to fix a defect or complete certain work. Unfortunately the rectification is not legally binding.

Informal Agreement

The simple method of directly contacting the other party can be an efficient and cost effective way of resolving the dispute.

Mediation

Mediation is an alternative dispute resolution option where an independent mediator helps disputing parties settle their dispute amongst themselves. This is done by the mediator facilitating discussion between the parties and facilitating their pursuit of a mutually beneficial solution. Mediation is confidential and mediators do not take sides or make decisions in relation to your dispute. Mediation can also be a cost and time efficient way to resolve a building dispute.

A property dispute lawyer can provide you with legal advice to prepare for mediation and notify you of the alternative options available if an agreement is not reached.

Conciliation

Conciliation is a form of dispute resolution where parties try to resolve a dispute through discussion. Conciliation is assisted by a conciliator, who is an independent party that can suggest options for resolving the dispute, provide the parties with relevant information and encourage the parties’ pursuit of an agreement. Conciliators do not make decisions regarding the dispute and must remain impartial throughout the process of conciliation. The building and construction lawyers at BSM are experienced in property disputes and can help you prepare and advocate for you during the conciliation.

Arbitration

Arbitration is an alternative dispute resolution process which allows disputing parties to have their dispute decided by an independent party (an arbitrator). In arbitration, the disputing parties put forward arguments and evidence that the arbitrator will assess when making a decision regarding the dispute. The experienced property lawyers at Brander Smith McKnight can represent you in the arbitration and prepare you for the process.

Litigation

Litigation refers to the process of resolving a dispute in court. During litigation, both parties to the dispute will argue their case before an impartial judge. The judge will determine how to resolve the dispute based on hearing the evidence of the case and the arguments of either party. Building and construction lawyers can assist property owners with enforcing their statutory warranties outlined in the Home Building Act 1989 (NSW) in court and can represent you during the litigation process.

SOPA

The Building and Construction Industry Security of Payment Act 1999 (NSW) is legislation enabling subcontractors to recover unpaid money from the head contractor and where necessary make an application for a prompt adjudication by the court. Although rapid and cost effective, it has specific time constraints and detailed requirements which must be followed. The building and construction lawyers at BSM are very familiar with SOPA and are able to advise and represent you through this process including preparing payment claims, payment schedules and adjudication applications and defences. We can also enforce adjudications and judgements handed down by adjudicators and the court.

There have been two recent amendments in 2021 to SOPA. In March 2021 the act was amended to provide that SOPA applied to home building where the builder contracted directly with the home owner. Previously, SOPA applied when the builder contracted with the developer or parties other than the home owner. In June 2021 a further amendment was made that legislates all construction contracts over the value of $20,000 must include a SOPA guide.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

Why BSM Lawyers?

Brander Smith McKnight’s lawyers have extensive experience with building and construction disputes. We have over 30 combined years of experience. Our team of lawyers resolve the vast majority of property disputes without the need for litigation using a wide range of alternative dispute resolution methods. This saves you money and time.

If litigation is required, our building and construction lawyers have outstanding advocacy experience and experience in all tribunals and courts, including NCAT, the Local Court, District Court and Supreme Court.

We are conveniently located in Sutherland, Parramatta, Wollongong and Sydney CBD.

FAQs

chevronAre there time limits that apply to statutory warranties?

Yes, the Home Building Act 1989 (NSW) provides that a party can commence proceedings for the breach of a statutory warranty that results in a major defect within 6 years from the completion of the work to which it relates. In the case of minor defects, proceedings must be commenced within 2 years of the completion of the work to which it relates.

chevronWhat is considered a major building defect?

Major defects are defined in section 18E(4) of the Home Building Act 1989 (NSW). In general terms, a major defect refers to a defect in a major element of a building that causes or is likely to cause:

  • An inability to inhabit or use the building
  • The destruction of the building or part of the building
  • A threat of collapse of the building or part of the building

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