Understanding Your Rights

The Tabcorp case, while not directly about home building, established important principles that apply to construction contracts, including those for residential properties. Here’s what you need to know:

1. The Right to What You Contracted For

The court emphasised that you’re entitled to get exactly what you contracted for. If your builder has failed to deliver on the agreed plans and specifications, you have the right to claim damages to rectify the defects.

2. Cost of Rectification vs. Diminution in Value

Importantly, the court ruled that the appropriate measure of damages is typically the cost of rectification, not the decrease in property value. This means you can claim the amount needed to fix the defects, even if this cost exceeds any reduction in your home’s value.

3. The “Reasonableness” Test

Builders often argue that the cost or scope of rectification is unreasonable. However, the court set a high bar for this argument to succeed. The test of “unreasonableness” is only satisfied in exceptional circumstances.

4. Your Aesthetic Choices Matter

The court recognized that if you’ve contracted for specific features—whether for functional or aesthetic reasons—you’re entitled to have these fulfilled. The builder can’t argue that a different solution is good enough if it doesn’t match what was agreed upon.

5. Commercial Considerations Don’t Override Your Rights

Even if your home is an investment property, this doesn’t diminish your right to claim full rectification costs. The court rejected arguments that only financial loss should be considered for commercial properties.

What This Means for You

If you’re facing building defects in your home:

1. You can claim the cost of rectifying the defects to bring your home in line with what was contracted.
2. Don’t be discouraged if the builder argues the rectification costs are unreasonable—the courts have set a high threshold for this argument.
3. Keep detailed records of the contract, plans, and any communications with your builder.
4. Consider getting an independent assessment of the defects and rectification costs.
5. Remember, you’re entitled to get what you paid for, both in terms of functionality and appearance.

Practical Steps for Homeowners:

Document Everything:

Maintain detailed records of the contract, any communications with the builder, and photographs of the defects.

Seek Legal Advice:

Consult a lawyer specialising in construction law to understand the best approach to claim rectification costs.

Engage Experts:

Obtain expert opinions on the nature of the defects and the necessary scope of rectification work. This can strengthen your position if the reasonableness of the rectification is challenged.