Water Ingress in Residential Properties

26 January 2026 in Building and Construction Law | 7 min read | skip to FAQs

This article explores the prevailing problem of water ingress in residential properties, particularly in newly constructed properties and the law in relation to this problem, namely, is it a defect, who is liable and what options or rights homeowners have regarding water ingress.

Overview of Water Ingress and Damage

Water ingress within properties, particularly newly built houses, is a prevailing issue that can manifest itself in the following symptoms and problems within a dwelling, namely:

1. Flooding or pooling of water within the crawl space under a house;
2. Water seeping through the subfloor, walls or foundations;
3. Flooding within the home;
4. Visible mould forming around bathrooms, roof spaces or window frames;
5. General mould growth in living areas;
6. Damp or moisture-laden walls or ceilings;
7. Discolouration or staining of ceilings or walls;
8. Musty, damp or earthy odours within rooms; and/or
9. Bubbling, cracking or peeling paint or plaster.

Internal issues within a house, being those arising from a failure by the Builder during the building works, may cause water ingress from either above (for example from the roof or windows) or below (for example from the slab, crawl space or basement) the building’s structure. These failures commonly include:

1. Poorly installed or inadequate waterproofing or flashing;
2. Insufficient drainage;
3. Poorly designed levels;
4. Defective ventilation or poor ventilation design; and
5. The performance of tiling, plastering and painting works over damp materials.

External causes that may not necessarily be caused or contributed to by the builder, but may contribute to or cause water ingress into the dwelling, include:

1. Water flooding from neighbouring properties;
2. Broken, blocked or otherwise damaged stormwater pipes; or
3. Poor or ineffective drainage on surrounding properties.

Home Building Act

Water ingress, in and of itself, is generally not a defect. Instead, what is commonly found to be a defect in connection with water ingress is the flaw or problem in the building works or design which allows for water ingress to occur. In other words, water ingress is a result of a defect in the building works.

Determining whether there is a Defect in the Building

The first step is to determine whether the flaw or problem in question amounts to a major defect or other defect (known as minor defects) in the building work. This is particularly important as the limitation period to bring a claim for a major defect is six (6) years while the limitation period to bring a claim for a minor defect is two (2) years (see section 18E(1)(b) of the Home Building Act (NSW)).

Major Defects

The term “major defect” is defined by section 18E(4) of the Home Building Act 1989 (NSW) to mean: A defect in a major element of a building which is attributable to:

1. Defective design;
2. Defective or faulty workmanship
3. Defective materials;
4. A failure to comply with the structural performance requirements of the National Construction Code; or
5. A combination of any of the above; and

One or more of the above causes, or is likely to cause:

1. The inability for the building (or part of the building) to be inhabited or used for its intended purpose;
2. The destruction of the building, or any part of the building; or
3. A threat that the building (or any part of the building) will collapse.

Minor Defects

If the flaw or problem is not found to be a major defect, it may still be a defect (a minor defect) which can be claimed. However, such a defect can only be claimed under the Home Building Act 1989 (NSW) within two (2) years after the commencement of the warranty period. To establish whether the flaw or problem which allows water ingress to occur is a major or minor defect, the evidence of an expert is generally necessary. For more information about defects, limitation periods and the importance of expert evidence please see our Home Building Major Defects article.

Is Water Ingress a Defect?

The question of whether a flaw or problem is a defect is decided on a case-by-case basis. For water ingress, it will depend on where the flaw or problem is located in the building, and the type of flaw or problem.

For example:

1. Drainage System Defect: In the case of Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233 at [169]-[170], the Tribunal said that the drainage system (and roof structure) of a house, which is designed to keep rainwater from entering the building, is considered to be a major building element under section 18E(4) Home Building Act 1989 (NSW), and that evidence (i.e expert evidence) may show that defects to the drainage system are likely to cause the house to become uninhabitable in the future due to flooding, even if such a rain event has not yet occurred.
2. Waterproofing Defect: In the case of The Owners – Strata Plan 91959 v JD Projects (NSW) Pty Ltd [2025] NSWCATCD 41 at [83] (‘The Owners’), there was evidence of actual water ingress along a sliding door frame in the house because the sliding door frame had failed to act as a barrier. In that case the Tribunal held that flaw/problem was a defect in the waterproofing which is a major building element and that the water ingress in that location would likely cause destruction of part of the building, which meant that it was a major defect.
3. Roofing Defects: In the case of Fisher v N. Phillips and M. Phillips t/as Arise Building Services [2022] NSWCATCD 80 at [55] to [57], there were a number of flaws/problems in the roofing, namely, leaking edge flashes, leaking skylight, the end flashing tray was not contoured or notched and the end flashing and roof gutter termination were leaking, the bottom edge corner flashings were inadequate and the roof was not completely water sealed.  After considering the expert and lay evidence regarding the problems, the Tribunal found the defects were major defects since the roofing system (which includes of gutters and downpipes) is a major building element, since waterproofing includes roofing, drainage and prevention measures to ensure there is not water ingress into the dwelling.
4. Lack of Drainage: In the case of The Owners at [60] to [62] it was said that “overflow drainage forms a part of the waterproofing system for the building” and that a “lack of drainage overflow is a defect in the waterproofing system”. In that case there was not an overflow drainage system for certain balconies of the Strata Building. The Tribunal found that the lack of drainage was a major defect as it could lead to the destruction of the impacted apartments’ flooring due to water ingress caused by flooding.

In Summary

What is shown in the above examples is that the location and nature of the flaw or problem is important for determining whether the water ingress is the result of a major or minor defect in the building work. In the above cases, all the flaws/problems were shown to occur within major building elements, such as the waterproofing, or occur within an element that form part of a major building element, such as within the overflow drainage which forms part of the water proofing system.

It is then a matter of showing, through evidence, that the present or future effect on the dwelling meets the threshold tests under section 18E(4) of the Home Building Act 1989 (NSW), namely:

1. The present or future inability of the homeowners to inhabit or use the building (or part of it) for its intended purpose;
2. The present or future destruction of the building or part of it; or
3. The present or future threat that the building, or any part of it, will collapse.

Options of Homeowners

What are my rights?

For Building Issues

The rights of homeowners will depend on the time which has passed since the building works were completed. This is particularly an issue for owners who have bought a house that was built during the time of a previous homeowner. Provided that the warranty period of six (6) years for major defects, or two (2) years from minor defects, has not expired then homeowners have a right to request that the builder attends the property and rectifies any defects resulting in a breach of the statutory warranties under section 18E(1)(b) Home Building Act (NSW).

This is the case even though the initial defects liability period, stated within the Residential Building Contract, may have already ended. The defects liability period is a general clause within most residential building contracts which expressly states a time period within which the builder is obliged under the contract to re-attend the property and address all issues, both big and small, that arise within that set period.

External Water Issues

For water ingress due to flooding from neighbouring properties or a damaged stormwater pipe, this may be a drainage problem and thus a major defect or it could potentially be a problem with the neighbouring properties or the local Council, depending on where the water is coming from. For more information regarding general disputes regarding neighbouring properties please see our Neighbour Disputes article.

 

Key Takeaways

1. Water Ingress Symptoms: Water ingress in residential properties can cause issues such as flooding, mould growth, and damp ceilings. It can result from internal issues such as poor waterproofing, faulty drainage, or external factors such as flooding.
2. Defects and the Home Building Act: Water ingress itself is not a defect, but flaws or problems within the building’s structure, such as poor waterproofing or drainage, can lead to it. Claims for major defects can be made within six (6) years, while minor defects have a two (2) year limitation period.
3. Determining Major vs Minor Defects: Water ingress can be caused by defects in major building elements like roofing, drainage, or waterproofing. Whether it is a major or minor defect depends on the actual or possible destruction or loss of use of the building.
4. Homeowner Rights and Remedies: Homeowners can demand that a builder rectify water ingress defects within the statutory warranty period, even if the contractual defects liability period has ended.

How can BSM Sydney Lawyer assist you?

The building and construction lawyers at BSM Sydney lawyers have decades of experience in residential building defects and associate disputes. Water ingress in residential properties is an increasingly common problem particularly in newly built houses. Brander Smith McKnight’s experienced team of construction lawyers have managed many water ingress cases, acting for homeowners, builders and homeowners. Our senior construction lawyers offer a free 20 minute consultation.

BSM Lawyer Sydney have offices conveniently located in Sydney CBD, Sutherland, Parramatta, Wollongong and Shellharbour.

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