The NSW Court of Appeal has handed down the most important decision concerning building defects in many years.

This decision means that builders and developers can be held liable for design defects.

This is a positive decision for owners corporations as it extends the scope of the statutory warranties concerning the quality of residential building work that is given by builders and developers to owners corporations under the home building legislation.

The case concerned defective residential building work that was undertaken to convert a warehouse complex originally built in 1928 into a mixed use strata development in Camperdown, Sydney.

So, what was the case about? Building Defects Case Important Decision

For NSW levy collection or strata legal advice please contact us here or call 02 9562 1266, we’re happy to assist.

At the commencement of 2018 the new strata building bond and inspection scheme started.

The strata building bond and inspection scheme is designed to incentivise developers ensuring that there is a clear process for builders to minimise any building defect issues in new residential high-rise strata blocks.

 Proposed regulations and Amendments

Proposed amendments to the Strata Building Bond and Inspection Scheme have recently been announced.

Currently, under the scheme developers are required to lodge a bond of 2% for residential and mixed-use high-rise strata buildings of 4 or more storeys.

The proposed amendments to the strata building bond and inspection scheme seek to enhance the ability of Fair Trading to verify the building contract price (on which the 2% building bond is based) and to clarify the role of the building inspector in the scheme.

So, what are the specific proposed amendments?

• Developers must lodge a building bond before applying for the occupation certificate (rather than at any time before an occupation certificate is issued, as is currently required)
• The owners corporation and the developer must agree on the amount to be released from the bond to meet the costs of fixing identified building defects. If they cannot agree, the Secretary will determine this amount
• New investigative powers for Fair Trading to enable verification of the amount of the contract price or building bond, including new entry to premises and search warrant powers
• An increase in the maximum penalty for a developer failing to lodge the building bond from 200 penalty units ($22,000) to 10,000 penalty units ($1.1 million)
• An offence for developers to provide false or misleading information to the Secretary in relation to the contract price or the building bond
• A new ‘good faith’ liability protection for building inspectors, and the professional associations that appointed them, which excludes them from liability for anything done (or omitted to be done) in ‘good faith’ in conducting an inspection

 Have your say!

The deadline to have your say on the proposed Bill and/or Regulation amendments is 11 May 2018, visit NSW Fair Trading to have your say.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

JS Mueller & Co Senior Lawyer and strata law expert, Adrian Mueller, discusses home warranty insurance in REINSW Strata Management Chapter News.

Adrian strongly expressed that knowledge is essential, especially when it comes to home warranty insurance and understanding what rights you have.

Click here now to view this case study which outlines the importance of  Home Warranty Insurance

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

About JS Mueller & Co

JS Mueller & Co has been servicing the strata industry across NSW for almost 40 years. We are a specialist firm of strata lawyers with in depth and unmatched experience in, and comprehensive knowledge of strata law and levy collection. We are there to assist you every step of the way.

JS Mueller & Co Headquarters
Level 1, 240 Princes Highway
Arncliffe Sydney Australia 2205
www.muellers.com.au

Media inquiries: Contact Julie Schoneveld on 02 9562 1266 or 0435 939 491

Did you know that a new register for homeowner warranty insurance policies now exists in NSW?

On 15 January 2015, the new amendments to the Home Building Act 1989 introduced a new register for homeowner warranty insurance (‘HOWI’). The register records homeowner warranty insurance contracts entered into after 1 July 2010.

For further information on ‘HOWI’ see – Home Warranty Insurance Register

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Some good news…

Home warranty insurance generally protects an owners corporation from being out of pocket for the cost to repair building defects where the builder has been made bankrupt.

But what happens when an owners corporation makes a home warranty insurance claim after the builder’s bankruptcy ends. Is it then too late for the owners corporation to make the insurance claim?

The answer is “no” according to a very recent decision of the NSW Supreme Court.

For further information Strata Home Warranty Insurance Rights

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Did you know that if your strata scheme has building defects your rights to compensation are subject to strict legal time limits?

If your building is less than 7 years old we can help you navigate through the maze of defect, warranty and insurance claims.

We can provide you with comprehensive advice setting out all of your options for getting the defects fixed or recovering the cost of repairs. We can advise you:

• Who to claim from?
• How to go about it?
• The time limits within which you must act

Miss the time limits – lose your rights!

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Fair Trading NSW has confirmed that the 1 December 2014 commencement date for the NSW Home Building Amendment Act 2014 has been delayed to 2015.

The amendments will commence in two stages:

Stage 1:
It is anticipated that the critical change surrounding statutory warranties will commence mid-January 2015. The critical change to the warranties will be a shift from “structural defect” (which is the current position) to a warranty which will only cover a building defect which is a “major defect”.

If the defect is categorised as a “major defect” it will enjoy a 6 year warranty otherwise any defect which is not a major defect and/or a non-major item will only have a warranty for 2 years. The new definition of “major defect” will be more restrictive than the current definition of a “structural defect”. The new amendments will have retrospective effect.

Stage 1 will also have other amendments commencing mid January 2015 and they are as follows:

1. For the first time, statutory warranties will be implied into subcontracts entered into by the principal contractor who undertakes residential building work. These changes will allow an owners corporation to enforce warranties as a successor in title against subcontractors.
2. If a defect arises due to an owners defective design or specification the builder will not be held liable for that defect.
3. Within 6 months the owner must notify the builder and the subcontractor of a defect. If the owner fails to do so such a failure may result in the reduction of any damages.
4. Owners must not unreasonably refuse access to a builder who wishes to rectify the defect.
5. Courts will be required to give priority to rectification orders as opposed to monetary orders.

Stage 2:
This stage will involve the provisions that relate to re-drafting of contracts. The contracts will have to comply with the amending legislation hence these will be dealt with in the second quarter of 2015.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

• 11 Days until 1 December 2014!
• Do not get caught out!
• The time to act is now!
• Have your buildings inspected by a building consultant to check for defects!
• Avoid losing your rights to make a building defect claim!

1 December 2014 the home building legislation in NSW will change. The changes to the legislation may mean that some owners corporations will lose all of their rights to make claims for building defects.

• 34 Days until 1 December 2014!
• Do not get caught out!
• The time to act is now!
• Have your buildings inspected by a building consultant to check for defects!
• Avoid losing your rights to make a building defect claim!

At JS Mueller & Co we work with a number of reputable building consultants and engineers. We can organise a building inspection for any building that you manage to check for defects before the 1 December deadline.

But you must act quickly otherwise you may run out of time.

If you would like to discuss the changes to the NSW home building legislation or have JS Mueller & Co organise a building inspection, please contact us now on the details below.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

• 39 Days until 1 December 2014!
• Do not get caught out! 
• The time to act is now!
• Have your buildings inspected by a building consultant to check for defects!
• Avoid losing your rights to make a building defect claim!