Construction Lawyer & Building Solicitors Sydney | Contracts Specialist Law Firm

Statutory Warranties:

What Builders and Contractors Need to Know About Them

It is important that builders and contractors be aware of statutory warranties. These apply for all residential building work in New South Wales. You must know what your rights and liabilities are based on the Home Building Act. Should you need legal advice, Contracts Specialist can explain the law and your legal rights to you so you can easily understand them.

What are statutory warranties?

Statutory warranties establish each parties’ rights and liabilities under construction contract.

The purpose of statutory warranties is to incorporate the effects of the Home Building Act into each residential building contract.

Homeowners, builders, and trade persons involved should follow the terms and conditions stated by the law.

Statutory Warranties and Building Contracts

Although the warranties are not present or written into the contract, the law states that these agreements still apply.

The Fair Trading says that a building contract is considered as the most important transaction between parties in a construction project.

Construction contracts are required if the contract price is over $5,000 (including GST).

Why is it important that builders and contractors be aware of statutory warranties?

  • Statutory warranties apply for all residential building work in New South Wales.
  • There is no monetary threshold after which the warranties apply- they apply to ALL residential building work.
  • Workers are required to follow the warranties as set by the law.
  • These statutory warranties apply whether or not they are included in a written construction contract.

Contracts Specialist has been helping many clients with building and construction matters for over 10 years. You can be assured that we at Contracts Specialist have worked on the same situations as yours regarding statutory warranty. If you need a legal advice on statutory warranties, you are in the right place.

Statutory warranties under Section 18B

Although the warranties are not present or written into the contract, the law states that these agreements still apply.

The Office of Fair Trading of New South Wales says that a building contract is considered as the most important transaction between parties in a construction project.

Construction contracts are required if the contract price is over $5,000 (including GST).

These are the descriptions of warranties by the contractor (and holder of a contractor licence) included in the Home Building Act- Statutory Warranties under Section 18B.

A.  Work will be done with due care and skill and in accordance with the plans and specifications set out in the contract,

  • Work must be performed with proper care and skill.
  • Work must be performed according to plans and specifications indicated in the contract.
  • This is interpreted in a case-to-case basis.
  • This demands a period for work assessment.
  • ‘Workmanlike manner’ may be limited based on the specified budget.

B. All materials supplied by the holder or person 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

 

  • Construction work materials must be suitable for its right purpose
  • Materials and supplies to be used for the construction project should new- unless otherwise stated in the contract
  • Also, the builders must also think about any representations made by the owner as to the planned use of work such as the works of the owner that may affect your scope of work.

C. Work will be done in accordance with, and will comply with, this or any other law

 

Work is to be performed following the Home Building Act 1989 and other related laws in New South Wales.

D.Work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time

 

  • The work must be done in accordance with the set time frame clearly stated in the contract.
  • If a timetable was not specified in the contract, the work must be done within an acceptable time, even if certain circumstances come up.

E. If the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling

 

  • If the construction project is the building a residence, the end result must be an acceptable and good place to live in.
  • It must be reasonably fit for occupation as a dwelling.

F. Work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder’s or person’s skill and judgment.

This warranty applies to work and materials. Mainly, this is the same to (b) warranty which states that materials used must be new and good, but this warranty has more distinct specifications.

 

How long are statutory warranties in effect?

6

years

for structural defects

Broken Wall Bricks - Statutory Warranties Sydney | Contracts Specialist

2

years

for non-structural defects

Amendments to
the Act

In Home Building Amendment (Statutory Warranties) Act 2006​, changes were made to the legislation such as including details regarding proceedings for breach of warranties.

To consult how these amendments apply to you and other concerns regarding statutory warranties, contact John Dela Cruz of Contracts Specialist. He can hear out your situation and look over your construction contract, so he can clearly tell you where you stand legally.

Contracts Specialist has the experience and expertise to guide you in resolving your legal issue. You can consult any construction-related matter with us.

Here is the process for us to help you move forward.

  1. We will review and interpret construction contracts for you.
  1. We can explain to you the rights and liabilities of each party based from NSW Home Building Act Statutory Warranties.
  1. We will ensure that your legal rights are enforced.
John Dela Cruz - Contracts Specialist