Statutory Warranties and Contractual Rights

The Home Building Act of NSW provides statutory warranties and contractual rights to homeowners who enter into a residential building contract with a builder. These statutory warranties require the builder to rectify any defects or incomplete works that occur within a certain period. The builder must also adhere to all relevant building codes and standards. Homeowners can enforce their statutory warranties by taking legal action against the builder or by making a claim on their builder’s warranty insurance. Homeowners have contractual rights that are detailed in their building contract in addition to the statutory warranties, such as the right to variations, the ability to terminate the contract, and the right to a dispute resolution procedure.

Builders Warranty Insurance and Statutory Warranty Insurance

Builders Warranty Insurance is a type of insurance that builders are required to have under the Home Building Act of NSW. It provides homeowners with protection in the event that the builder dies, disappears or becomes insolvent during the building project. Statutory Warranty Insurance is also required under the Act and provides homeowners with protection against defects in the building work. It covers for a period of six years for major defects and two years for other defects, from the date of completion of the building work. It is important for homeowners to ensure that their builder has this insurance in place before starting the project, as failure to obtain this insurance can result in penalties and leave the homeowner with limited options if defects arise.

Who is Held Liable for the Warranties Under the Home Building Act?

Determining liability for warranties under the Home Building Act can be a complex matter due to the involvement of different parties in the construction process. While builders are typically responsible for ensuring work meets the required standard and statutory warranties are met, subcontractors or suppliers may also be held accountable if they contributed to defective work. It is crucial for homeowners to grasp the terms of their building contract and the roles of all involved parties. This knowledge can help them pinpoint who is responsible for defects or incomplete work. In case of confusion or uncertainty, it is advisable for homeowners to seek legal counsel from an experienced construction lawyer.

Common Issues in Dispute Between Homeowners and Builders Regarding Statutory Warranties

The Home Building Act provides statutory warranties to protect homeowners from common issues that can arise during the construction process. Defective or incomplete work, delays, variations without proper consent, and the use of inferior or unsuitable materials are some examples of issues that can cause disputes between homeowners and builders. Additionally, misrepresentations by builders regarding their qualifications or experience, failure to obtain necessary permits or approvals, and disputes over payment can also lead to conflicts. Homeowners should be aware of their rights under the Home Building Act and seek professional advice if they encounter any issues with their builder.

What Are Your Rights as a Homeowner?

As a homeowner, you should be able to trust that your builder will execute the building works according to the contract, plans, and specifications. In case you have doubts about the work quality or if some work is left incomplete, you have the right to ask your builder to rectify the defects or finish any incomplete work. The builder has a legal responsibility to comply with your request within a reasonable time. If the builder fails to comply, you may take legal action to enforce your rights under the Home Building Act and the contract. Promptly seek legal advice if you think your rights have been violated. Remember, time is of the essence when dealing with defective building works.


In conclusion, as a homeowner, it is essential to understand your rights and options when encountering defective or incomplete building works, delays, and variations without proper consent. The Home Building Act of NSW provides statutory warranties and contractual rights to protect homeowners, and builders’ warranty insurance and statutory warranty insurance offer additional protection. 

As a construction lawyer with over 10 years of experience, I have advised homeowners and builders on their contractual and legal rights in NSW, Australia, and all courts of competent jurisdiction. Whether you are a homeowner or a builder, I can help you understand your rights, assess your risks and obligations, and negotiate or amend contracts to reflect your intentions.