Developers, consultants and all construction workers now responsible for fixing defects

In response to the loss of public confidence from prominent design and building quality issues, the New South Wales (NSW) Parliament has passed legislation to further regulate the design and construction of residential buildings.

What has happened?

In June 2020, the NSW Parliament passed an interesting new piece of legislation, the Design and Building Practitioners Act 2020.

The legislation passed outlines a ‘duty of care’ law, making all participants in building work responsible for fixing building defects. The law aims to help current and future building owners avoid economic loss caused by said building defects.

Who will be impacted?

The new building law will impact people who own and live in strata buildings and any person involved in property development and construction in NSW. Many owners corporations will now have rights they did not previously have.

The new Act will cover existing buildings constructed in the last ten years and all new constructions going forward. It also applies to existing buildings if the loss caused by the defects was first apparent within the 10 years immediately before the start of the new Act on the 11^th June 2020.

Who is responsible?   

Any person who carries out the construction work on a residential building now has a duty to exercise reasonable care to avoid an economic loss to the current or future owner.

The type of construction work refers to:

• Building work;
• Designs for work;
• Manufacture or supply of a building product used for building work;
• Supervising, coordinating, project managing or otherwise having substantive control over the carrying out of any of the above.

The construction participants refer to:

• Builder and property developer.
• All parties involved in the construction.
• Consultants including architect, engineer, other specialist practitioners, etc.
• Supervisors or project managers.
• Individual sub-contractors and suppliers.
• Private certifiers (if they were an active participant in construction work or had substantive control over the carrying out of the building work).
• builders (including head contractors, subcontractors, certifiers and engineers)

Parties cannot contract out of the statutory duty of care.

What can be claimed?

Damages that can be claimed include costs to rectify, including consequential loss caused by defects, and also the costs of reasonable alternative accommodation (if necessary).

Actions owners, future owners or owner corporations can take: 

Prudent Strata Managers should now undertake a defect review of all buildings constructed within the last 10 years including buildings that are out of time for a potential statutory warranty claim under the Home Building Act 1989.

Actions construction participants can take:

Ensure your building practices comply with the Building Code of Australia.

Resolve any building defects quickly and professionally in order to avoid potential future claims.

For further information please contact Donovan Oates Hannaford on 02 6583 0400 or info@dohlaw.com.au.