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Time period for home warranty claims reduced

Wednesday, November 16, 2011

Recent amendments to the Home Building Act 1989 have implications for home owners, builders, developers and owners corporations.

The reforms apply to all residential building work covered by home warranty insurance (but not to claims or legal proceedings that are already in the pipeline or finalised).

The amendments reduce the period of time where owners and builders can claim for defects. This period during which proceedings for a breach of a statutory warranty could be commenced was previously seven years but this period has been reduced to 2 years for non-structural defects (poor painting, incorrect wiring etc) and to six years for a structural defect (anything that results in, or is likely to result in, the building or any part of the building being closed or prohibited from being used, or could result in the destruction of the building or a threat for its imminent collapse).

One of the issues is that for non-structural defects the time period starts running from the date the building (or apartment) was completed, not when the owner moves in. This does not allow much time for the new owner to identify defects, which sometimes do not become apparent until two to three years after the building work is done, defects in waterproofing is a good example.

Tyrrells provides a Progress and Final Inspection as well as the Home Owner Warranty Report (only suitable if you are an owner builder). Both Reports are inexpensive ways of getting incomplete or defective work properly fixed prior to the warranty expiring.


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