A statutory warranty is a legal guarantee that residential building work was done properly. In New South Wales it comes from the Home Building Act 1989, it applies automatically, and the builder cannot sign it away in the contract.
For a strata building, that guarantee is often the difference between the builder paying to fix a defect and your owners paying for it through a special levy. The catch is time. These warranties expire, and most committees find out too late.
What the warranty actually promises
Under the Act, residential building work carries a set of promises. The work will be done with due care and skill, and in line with the plans and specifications. Materials will be good and fit for the job. The work will comply with the law. It will be finished within the time agreed. And the result will be reasonably fit to live in.
If any of those promises is broken, that is a breach of warranty — and you have a claim.
How long a statutory warranty lasts
Two clocks run from the date the work was completed:
- Six years for a major defect.
- Two years for everything else.
A major defect is a defect in a major element of the building — structure, fire safety, waterproofing — caused by defective design, workmanship or materials. Water getting into the basement is a different conversation to a poorly hung door.
There is one extension worth knowing. If you discover a breach in the final six months of the warranty period, you get a further six months from the end of that period to start proceedings. It is a narrow window, not a reprieve.
Work out both dates for your building now and put them in the committee’s calendar. A warranty you remember in year seven is worth nothing.
Who makes the claim in a strata scheme
This is where strata differs from a freestanding house.
Defects in common property are the Owners Corporation’s (OC) responsibility, so the OC makes the claim — not an individual owner. The OC inherits the benefit of the warranties as a later owner of the land, which is why a claim can still be made years after the developer has moved on.
Defects inside a single lot are usually for that lot owner to pursue. An owner can also act where the OC has been asked to deal with a defect and has not.
If you are not sure which side of the line a defect falls on, your strata committee should get that answered before anyone writes to the builder. It decides who has standing to claim.
Two more protections for newer buildings
Statutory warranties are not the only avenue.
The Strata Building Bond and Inspections Scheme (SBBIS). Developers of new residential strata buildings of four storeys or more lodge a bond with the NSW Government worth 2% of the building contract price. An independent inspector reports on defects between 15 and 18 months after completion, and the bond — held for two years — can be drawn on to fix what they find. Read the NSW Government’s overview of the scheme if your building is recent enough to qualify.
A statutory duty of care. Under the Design and Building Practitioners Act 2020, anyone carrying out construction work owes a duty to take reasonable care to avoid economic loss caused by defects. That duty is owed to owners corporations and to later owners, and it cannot be delegated or contracted out of. Time limits apply here too.
What to do when you find a defect
- Record it properly. Dated photographs, the location, and when it first appeared. A defect you cannot evidence is a defect you cannot claim.
- Get it assessed. An independent building consultant’s report tells you whether it is a major defect, which decides the warranty period you are working to.
- Notify in writing. Write to the builder or developer, describe the defect, and ask for rectification. Keep every reply.
- Fund the response. Investigation and legal costs usually need a resolution at a general meeting. Check what sits in the capital works fund before the meeting, not after.
- Escalate. Building Commission NSW handles building defect complaints and expects the parties to try resolution before a court or tribunal. Its complaints process is free to use.
Throughout, keep insurance in view. Some damage is an insurance claim rather than a warranty claim, and water damage is frequently both.
This article is general information about NSW legislation, not legal advice. Warranty periods turn on the facts of your building and when the work was completed. Get advice from a lawyer experienced in strata and building disputes before you rely on a deadline.
Is your building’s warranty clock already running?
Most committees discover a defect long before they discover which warranty covers it. A manager who tracks completion dates, keeps the defect record straight and escalates in writing is what turns a warranty into a rectification.
More Than Strata resolved 17,973 requests in six months, with a median first reply under 2 hours. If your building has defects and nobody is driving them to a close, talk to us or request a proposal.