When undertaking domestic building works in Victoria, which includes constructing and renovating homes, the law sets out the warranties that are a part of every domestic building contract. These warranties state that the:
- Works will be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;
- Materials to be supplied by the builder for use in the work will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new;
- Work will be carried out in accordance with, and will comply with, all laws and legal requirements;
- Work will be carried out with reasonable care and skill and will be completed by the date (or within the period) specified by the contract;
- Home will be suitable for occupation at the time the work is completed; and
- Work will be reasonably fit for that purpose or will be of such a nature and quality that they might reasonably be expected to achieve that result.
Owner builders have different warranties applicable as they are not considered to be works constructed under a domestic building contract, however, owner builders are required to comply with following warranties when selling the property:
- The vendor warrants that all domestic building work carried out in relation to the construction by or on behalf of the vendor of the home was carried out in a proper and workmanlike manner;
- The vendor warrants that all materials used in that domestic building work were good and suitable for the purpose for which they were used and that, unless otherwise stated in the contract, those materials were new; and
- The vendor warrants that domestic building work was carried out in accordance with all laws and legal requirements, including, without limiting the generality of this warranty, this Act and the regulations.
In Victoria, the law defines the term ‘defective’ as:
In relation to domestic building work, includes:
- a breach of any warranty [listed above];
- a failure to maintain a standard or quality of building work specified in the contract.”
Not all of works which are not performing as intended will be considered to be defective works. Such examples include:
If a builder installs a product in accordance with the manufacturer’s recommendations and specifications, failure of the product itself will likely not be considered defective works of the builder. Similarly, builders are not liable for design faults.
Throughout a construction project, multiple parties will have input into the works including geotechnical engineers to test the soil and architects and engineers to design the plans.
If a builder builds the property in accordance with the plans and specifications but the plans are defective, the builder can make the argument they have relied on the plans and have not breached its warranties in doing so. This may give rise to a claim against the party responsible for the defective design.
Occupation Issues/Owner Use
Owners also have an obligation to ensure they do not incorrectly use or handle the works constructed by the builder. In circumstances where owners misuse a property, such as flushing items down a toilet which should not be flushed which ultimately leads to the deterioration of the pipes, this may not be considered to be defective works by the builder but a failure by the owner. Owners must be sure to take care of the property in their occupation.
Generally, owners have ten years from the issuing of the Occupancy Permit or Certificate of Final Inspection to make a claim for compensation or rectification of defective building works. Before commencing a claim, an owner must first identify the party who has caused their loss and damage. Subsequent purchasers of property who did not enter into domestic building contracts are provided the warranties above but must identify whether the home was built by a builder or an owner builder.
For more information on owner builder obligations read our blog here.
Any owner wishing to make a claim against a builder must first go through the government body known as Domestic Building Dispute Resolution Victoria (DBDRV). This is a free service which encourages settlement of issues before the need to issue proceedings. We have discussed this further in our blog here.
The DBDRV will determine whether a matter is suitable to be heard by its services. If yes, the parties will have a conciliation and attempt to resolve their issues. If the matter does not settle at the DBDRV due to being unsuitable or unable to be resolved at conciliation, the DBDRV will issue a certificate which allows the owner (or builder) to issue proceedings in VCAT. VCAT holds jurisdiction for all domestic building disputes in Victoria.
Domestic Building Insurance
If owners obtain a successful in judgment against a builder, they may trigger one of the four policy events which enables an owner to make a claim pursuant to domestic building insurance. For more information regarding Domestic Building Insurance read our blog here.
Claims against builders, engineers or building surveyors for a defective design or construction is a complex area of law that requires analysis and scrutiny from lawyers that are experts in construction litigation.
If you have any concerns about defects or warranties do not hesitate to contact our team at Oldham Construction Lawyers.
Contact the Director at Oldham Construction Lawyers, Daniel Oldham on (03) 9640 0002, or via email email@example.com.