Building Defects – Who is Liable?

Can the director of a building company that is responsible for the construction of a new strata building be held personally liable for defects in the building?

The Design and Building Practitioners Act 2020 (Act) was introduced in 2020 and provides that a duty of care is owed by “a person who carries out construction work” to an owners corporation to avoid defects in the construction of the building. But who exactly is classified as “a person who carries out construction work”?

Is “a person who carries out construction work” limited to the entity that was contracted to do the work such as the builder or does it also include all persons involved in completing the project such as a supervisor, project manager and even the director of the builder’s company or the developer?

Personal Liability of Project Manager

A recent decision by the Supreme Court of NSW has found that the husband of a director of a building company was personally liable for defective building works done by the builder under the Act because he acted as the project manager and supervisor of the builder: see Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624.

In this case, the builder was placed into liquidation and the developer brought proceedings against Mr Roberts the husband of a director of the builder.  According to the Court, Mr Roberts was a project manager of the builder, supervising construction works for the project. Therefore, Mr Roberts was found to be “a person who carried out construction work” under the Act and was found liable for the defects.

Liability of Developer

In another recent Supreme Court case, an owners corporation sued the builder and developer for damages arising from defects.

The Court found, among other things, that a developer could be held liable for defects under the Act as a person who carried out construction work.

The Court also said that under the Act, a person could be liable for defects if they could (but did not necessarily) have control of the building works: see The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659.

Conclusion

These cases have far reaching consequences for directors, supervisors, project managers, developers and sub-contractors involved in construction work who all could be liable to owners corporations for defects under the Act, even for work done up to 10 years ago (as the Act is retrospective). However, for those persons to be liable, it must be proven that they have had or could have had some control over the building works.

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

New building bond and building defect laws commence today, 1 July 2020.

The new laws are part of the NSW Government’s promise to “get tough” on building defects and form part of a suite of new laws that have recently been introduced to combat the spate of poorly built strata buildings.

These new laws will strengthen the rights of owners corporations to make claims against builders, developers and other to have defects repaired or obtain compensation to cover the cost of repairing defects.

That Act introduces new laws with respect to the rectification of building defects in new strata buildings. In this article we take a look at those new laws:

• The New Laws and the Buildings They Apply to
• Changing Due Dates for Payment of Building Bonds
• Consequences for Failing to Provide a Building Bond and Increased Penalties
• Offences for Developers Providing False/Misleading Information
• Using Building Bonds to Pay Other Costs
• Extending  the Time Frame for Building Bond Claims
• Cancelling a Building Bond
• Recovering of the Building Bond from Developers
• Investigation and Enforcement Powers
• Protection of Building Inspectors from Personal Liability
• Forcing Developers to Provide Information to Inspectors

Here we outline the new laws New Building Bond and Defect Laws.

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

New ‘duty of care’ laws makes all participants in building work responsible for fixing building defects!

Passed by the NSW Parliament in early June 2020, the new building laws will have a significant impact on people that own and live in strata buildings and any person involved in property development and construction in NSW.

The new laws apply to both existing buildings built in the last ten years and also to the construction of new buildings going forward.

Those laws will give many owners corporations rights they did not previously have.

Here we explain the Building Defects New Duty of Care Laws and what actions strata managers can take now!

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

The cost of fixing the unfolding national building crisis involving building defects including the use of dangerous combustible cladding, could soar past $6.2 billion, according to a new economic analysis.

It is estimated that around 3,461 residential apartment blocks across the country have flammable exterior cladding that’s 170,000 apartments mostly constructed in the last 10 years, the majority of these in NSW.

So, what can you do, whilst the issue is being addressed, to mitigate and minimise your strata blocks risk?  Cladding and the Warranty Period – How can you Minimise your Risk?

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

The current NSW home building legislation states that buildings must be at risk of collapse or be uninhabitable to reap the benefit of a full 6 year warranty.

It seems absurd to provide warranties only for defects (major) at this extreme end of the spectrum, which, as is now being acknowledged, should not be occurring at all in a properly regulated building industry.

So, what about all the other defects?

Before your building defects warranty period expires we strongly suggest that the following 3 points be considered: BUILDING DEFECTS – Top 3 Tips Before your Home Warranty Period Expires

Have you or your client recently purchased a new strata home? Do you have a building defect issue (or you’re not sure)? Talk to our building defect experts before your warranty period expires.

For all strata legal and building defects contact us here or call 02 9562 1266 we would be happy to assist.

Over the last few years the Home Building Act has been amended a number of times raising many questions in regards to the building defects rectification process such as:

1. What is the duty to mitigate?
2. What is ‘reasonable access’?
3. When can you refuse the builder and developer access to carry out rectification work?
4. Has the builder already attempted rectification work that has been unsuccessful?

So, what steps can owners corporations take to mitigate the loss Building Defects and the Rectification Process.

It’s a complex area of law and in order to protect the interests of the owners corporation it’s wise to seek legal advice on navigating this process.

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