Statutory Warranties : What are your rights?

17 October 2025 in Civil and Commercial Litigation | 6 min read | skip to FAQs

This article discusses the significance of statutory warranties. We examine two widely applied statutory warranties in Australia; the Home Building Act and the Competition and Consumer Act.

The Significance of Statutory Warranties

The most important legal significance of a statutory warranty is that it cannot be ignored or excluded by any form of agreement or contract. From a civil litigation point of view this means that parties are entitled to commence legal proceedings for a breach of contract where statutory warranties are implied in a contract and those warranties have been breached.

This article has a brief summary of two of the most widely applied statutory warranties in Australia.

1. The Home Building Act 1989 (NSW)
2. Australian Consumer Law, found in schedule 2 of the Competition and Consumer Act 2010 (Cth).

There are other statutory warranties imposed by legislation, including the Sale of Goods Act 1923 (NSW) and Motor Dealers and Repairers Act 2013 (NSW).

Australian Consumer Law

Australian consumer law protects consumers and provides that goods must be of an acceptable quality. This applies even when the retailer or supplier does not offer a warranty or offers a limited warranty. Australian consumer law defines acceptable quality as fit for all purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable.

Guarantees relating to supply of goods are found at sections 51-59 of the Competition and Consumer Act 2010 (Cth) and guarantees relating to the supply of services are found at s60-63. Section 64 sets out that these guarantees cannot be excluded by any contract.

Section 51 is a guarantee of title, meaning that upon purchase, the purchaser owns the product and no other party can make a claim to ownership. Section 54 is a guarantee of acceptable quality. Section 55 is a guarantee of any disclosed purpose. Section 56 relates to the supply of goods by description. Simply put, the goods must match any description provided. Section 57 is a guarantee relating to sample or demonstration model. Section 58 is a guarantee relating to repairs and spare parts.

Section 60 guarantees the supplier of services has used due care and skill. Section 61 is a guarantee of fitness for a particular purpose. Section 62 is a guarantee for a reasonable time for supply.

The Home Building Act contains statutory warranties

Section 18B of the Home Building Act 1989 (NSW) (HBA) contains various statutory warranties that are implied (in other words incorporated) into all contracts for the completion of residential building work. They relate to things such as the quality of work completed, defects, obligations to complete work with due diligence and within a reasonable time. Statutory warranties cannot be excluded by any form of agreement or contract and apply to all residential building work irrespective of the cost of the work being completed.  Section 18G of the Home Building Act 1989 (NSW) states that any clause in a contract which attempts to restrict or remove the warranties is void. In other words a builder cannot, by agreement, contract out of the warranties.

Statutory Warranties in the HBA that define the Obligations of the Builder

1. The work will be done with due care and skill and in accordance with the plans and specification set out in the contract;
2. All materials supplied will be good and suitable for the purpose for which they are used and that, unless the contract states otherwise, the materials will be new;
3. The work will be done in accordance with the Home Building Act 1989 (NSW) and any other law;
4. The work will be done with due diligence and within the time stipulated by the contract or, if not stipulated, then within a reasonable time;
5. The work, if it consists of the construction, alterations, additions, repairs, renovation, decoration and/or protective treatment of a dwelling, will result in a dwelling that is reasonably fit to be occupied as a dwelling.

Successor in Title

Section 18D of the Home Building Act 1989 (NSW) states that the statutory warranties extend to a successor in title. This means that if the home owner sells the property, the purchaser will also have the benefit of the warranties, even though the new purchaser was not a party to the original contract to do the residential building work. This is because the statutory warranty continues to exist within the contract.

Limitation Period of Statutory Warranties

Statutory warranties have a limitation period, which means that the statutory warranties are valid for that period of time. A home owner must commence legal proceedings within the limitation period, otherwise the statutory warranties will lapse and no longer be available to the home owner. A common misconception is that notifying the builder of a dispute or breach of statutory warranty is sufficient to ensure that the time limit is satisfied, this is not correct or sufficient.

Section 18E(1)(a) of the Home Building Act 1989 (NSW) states that, legal proceedings for breach of a statutory warranty, whether or not expressly stated in the contract, must be commenced prior to the end of the warranty period.

The warranty period commences 

1. Upon the completion of the work.
2. If the work is not completed, the date the contract is terminated or ceased.
3. If the work has not commenced, the date of the contract.

What is a defect?

In the context of statutory warranties in residential construction, a defect can be classified as either major or minor. For a detailed discussion on home building major defects, please see our article on this subject. In short, a major defect is defined as 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.
5. A defect in the external cladding of a building more than 2 stories high
6. A building product that contravenes the Building Products (Safety) Act 2017 (NSW)

Furthermore, this defect is likely to cause destruction, collapse or the inability for the building to be inhabited. Importantly, the Supreme Court has found that the definition of a major defect should be interpreted broadly as upheld in Stevenson v Ashton 2019 (SWSC).

The Nature of the Defect determines the Warranty Period

The nature of defects that result from a breach of a statutory warranty will determine how long a party has to take legal action in response to the breach. 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 of the completion of the work to which it relates. Importantly, the Supreme Court has found that the definition of a major defect should be interpreted broadly as upheld in Stevenson v Ashton 2019 (SWSC). All other building defects are considered minor and the statutory warranty period is 2 years. 

Effect of Building Legislation Changes in 2023

This recent legislation widens the chain of responsibility in the supply chain of building products for residential construction by making more occupations accountable. This has been achieved by amending the Building Products (Safety) Act 2017 (NSW).

The legislation also created The Building Commission and granted this government body a wide range of powers via amendments to the Home Building Act 1989 (NSW). The Commission is responsible for the regulation of laws and has the ability to enter any residential home under construction and investigate as the agent of the Commission sees fit. They also have the power to stop work and order rectification and penalties for any defects detected. The aim of the Building Commission is to proactively identify defects and illegal construction problems during the building of residential works, and have them rectified prior to completion of the home. For further information on these recent changes please see our articles on Building Legislation Amendment Act and the Role of the NSW Building Commission.

How can BSM Sydney Lawyers assist you?

The civil litigation lawyers at BSM Sydney Lawyer can make a claim or commence legal proceedings for breaches of statutory warranties. We can advise on the appropriate legal steps when statutory warranties are implied in a contract and have been breached. Our experienced lawyers know the intricacies of the legal system and will ensure that time limits, choice of court or tribunal and other legal requirements are complied with.

The litigation lawyers at Brander Smith McKnight Lawyer Sydney are very strong negotiators and will advocate tirelessly for you. We recognise that court proceedings can be an expensive process and work hard to find practical and commercially advantageous solutions including using alternative dispute resolution methods including mediation, conciliation, arbitration, adjudication and expert determination. The experienced commercial litigation lawyers have expertise in acting for home owners and consumers, home builders and suppliers of consumer goods and services. Our senior civil litigation lawyers offer a free 20-minute consultation to assess your individual case.

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