Residential Building Disputes

Posted: by Adam Gibbs

Our region is growing. New people are moving to the area and more new residential land is becoming available to homeowners. With this influx comes an increase in residential building and residential building disputes.

Generally speaking, the most expensive purchase in a person’s life is a home. Most homeowners are committed to making their new house a home. However, things do not always go as planned.

Residential building disputes commonly occur between the homeowner and the builder where there has been a breakdown in communication and one or both of the parties have failed to meet
their obligations under the building contract. Generally this includes: incomplete or defective building work, damage caused to other structures as a result of the building work, specialist trade work, and breach of contractual obligations.

For the homeowner, building disputes are often highly emotive as they are having to live day in day out with the alleged building defects. For the builder, the dispute may put a sole trader into financial hardship as the solvency of the building project is often reliant on the payment of the contractual progress payments.

It is important to note that statutory warranty periods apply to building defects. For residential building contracts signed on or after 1 February 2012, the statutory warranty period for major defects is 6 years and 2 years for all other defects. If the loss only becomes apparent in the last six months of the statutory warranty period, then the homeowner has a further six months to enforce the statutory warranty. For all contracts entered into before 1 February 2012, the statutory warranty is 7 years for all building work defects. The homeowner or subsequent purchaser are able to enforce the statutory warranties within the set timeframes after the building works are completed.

The general steps to dealing with a building dispute are as follows:

1. Talk to the other party.

Try to come to an agreement. If you are able to reach an agreement, put the agreement in writing include when, what, and who is going to do what.

2. Contact NSW Fair Trading.

However, NSW Fair Trading is only able to assist you if both parties agree to attempt a resolution.

3. Lodge an application with consumer and commercial division of the NSW Civil and Administrative Tribunal.

The Tribunal only deals with disputes of $500,000 or less. An application can be filed online or by post. The primary advantage of the Tribunal is that it is less formal than the Court and it is able to award a work order or a costs order. We understand that the application can be difficult to complete without any legal knowledge.

4.Contact your insurer.

Under the Home Building Compensation Fund insurance policy, it’s important to notify your insurer in writing of the building dispute.

For more information on legal representation call 02 6681 6334

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