Guide 5 of 6Any price, for specialist work
How long is a builder responsible for defects?
Every contract to do residential building work in NSW carries warranties the law puts there, whether or not they are written in. Under the Home Building Act, proceedings for a breach that results in a major defect must be started within 6 years of completion, and within 2 years in any other case. A builder in Sydney owes them like any builder in NSW.
General information about NSW home building law, not legal advice. Not a government website. For your own job, Building Commission NSW is on 13 27 00.
What the warranties promise
Section 18B of the Act implies these warranties by the builder in every contract to do residential building work:
- the work will be done with due care and skill, and as the contract’s plans and specifications set out
- the materials the builder supplies will be good and suitable for their use and, unless the contract says otherwise, new
- the work will comply with the Act and any other law
- the work will be done with due diligence, within the time the contract sets or, if it sets none, a reasonable time
- work on a home, from building one to renovating or repairing it, will leave a home reasonably fit to live in, as far as the work goes.
They reach residential building work as the Act defines it: specialist work on a home at any price, and other work once its reasonable market cost is over $5,000, the amount Regulation clause 12 sets.
“Even if these warranties are not written into the contract you sign, the law says that they still apply to the work you are having done on your home,” the NSW Government says. Section 18G makes void any term that tries to restrict or remove them, and section 18D gives a later owner the same rights as the owner before.
From Home Building Act 1989, sections 18B, 18D and 18G and NSW Government, Contracts for residential building work.
Major defects and other defects
The longer period is for a major defect, and section 18E defines one in three ways. The first is a defect in a major element of the building, caused by defective design, faulty workmanship, defective materials or a failure to meet the National Construction Code’s structural performance requirements, that causes or is likely to cause one of three things: the building, or part of it, cannot be lived in or used for its purpose; it is destroyed; or it threatens to collapse. The second is using a building product in a way that breaches the Building Products (Safety) Act 2017. The third is a defect the Regulation names as a major defect, and the Regulation can also name defects that are not.
A major element is a load-bearing part of the building essential to its stability, such as foundations and footings, floors, walls, roofs, columns and beams; a fire safety system; or waterproofing.
The NSW Government puts the difference simply: “Some defects are minor and mainly affect the appearance or finish of a home, while others are major and can impact its structure or safety.” For what counts as acceptable work, it points to the NSW Guide to Standards and Tolerances, which it calls a general reference, not strict rules.
From Home Building Act 1989, section 18E and NSW Government, Home building safety and standards.
What counts as completed
Both periods start on completion of the work, so the date matters. Under section 3B, the work is completed on the date it is complete as the contract defines it. If the contract does not say, or there is no contract, completion is practical completion: the work is finished apart from any omissions or defects that do not stop it being reasonably usable for its purpose.
Unless an earlier date can be shown, practical completion is presumed to be the earliest of these that can be established: the day the builder handed the work over to you, the day the builder was last on site doing work (other than fixing defects that do not affect practical completion), and the day an occupation certificate was issued allowing the work to be used. For owner-builder work the Act adds a fourth date.
If the work was never completed, the period starts on the day the contract was ended; if it was not ended, the day work stopped; and if work never began, the date of the contract. Section 3B does not apply to work covered by section 3C of the Act, and this guide does not cover the warranty periods for new strata apartment buildings.
A dated timeline: one completion date
Say a renovation in Sydney is completed on 1 March 2027. Here is where each period the Act and its Regulation set would land, with two contract and practice dates from the NSW Government beside them.
| Date | What ends or begins |
|---|---|
| 1 March 2027 | The work is completed, and both warranty periods start |
| 31 May 2027 | Around here, 13 weeks on, a typical defects and liability period in a new home contract would end. It is a contract term, usually 13 weeks for new homes, and it can vary |
| 1 March 2028 | The first 12 months, when small cracks may show in brick, timber and plaster as new materials dry out |
| 1 September 2028 | The last 6 months of the 2-year period begin. A breach that becomes apparent from here on may still be the subject of proceedings started up to 1 September 2029 |
| 1 March 2029 | The 2-year period for other defects ends, and so does the shortest period compensation cover may give for other loss |
| 1 September 2032 | The last 6 months of the 6-year period begin, with the same extra 6 months, to 1 September 2033 |
| 1 March 2033 | The 6-year period for major defects ends, and so does the shortest period of compensation cover for a major defect |
| 1 March 2037 | After this, NCAT cannot hear a claim on the compensation cover: the Act sets a limit of 10 years from completion |
From Home Building Act 1989, sections 18E, 48K and 103B and NSW Government, How to make sure your new building work remains trouble-free.
A breach becomes apparent, in the Act’s words, when anyone entitled to the warranty first becomes aware of it, or ought reasonably to have. Proceedings must be started before the period ends, and section 48K says NCAT has no power to hear a warranty claim lodged after it.
Your part
“Closely inspect the finished project and list any items of concern,” says the NSW Government. If you find items of concern, “let the builder know in writing and keep a copy.” It suggests keeping the building contract and any variations, the plans and specifications, and proof of all payments.
A breach of a warranty is a breach of the contract, so the owner has a duty to limit the loss (section 18BA). If the defect is near the end of a period, the NSW Government advises lodging with NCAT to preserve your rights, even while Building Commission NSW is helping.
The Design and Building Practitioners Act 2020 adds a separate duty of care, owed to each owner of the land and each later owner, which sits beside the Home Building Act’s warranties rather than replacing them (sections 37 and 41).
From NSW Government, How to make sure your new building work remains trouble-free and Design and Building Practitioners Act 2020.
When a defect will not be fixed, the disputes guide sets out the order of steps. If the builder has gone out of business, the compensation cover guide explains the last resort.