What is a building defect in a strata apartment building?

While the NSW Government commits to the new bill that helps address the design and construction standards in apartment buildings, the consumers of the construction industry (home buyers and property investors) are still left with cleaning up and dealing with building defects. The construction industry continues and will in perpetuity, have defects within new apartment buildings which lot owners and Owners Corporation need to accurately capture, keep good records and raise with the Property Developer and/or Builder. 

 Side note: Defects are inherent within the building and construction industry and for a minority of Property Development and Building companies, they are unintentional, and they have a genuine interest in rectifying all defects. Structural Engineers are also continuously trying to beat the challenge of defects in buildings; however, it's tough to manage adequately. We are hopeful that a change in creating an open register of qualified engineers through an authoritative banner, can start to minimise dodgy deals and sign-offs. 

A building defect ranges from small items such as damaged finished surfaces through to structural defects that caused water ingress or building movement causing large structural cracks in the concrete. 

 These defects are classified as Minor Defects or Major Defects, and both have different liability periods.  

• Major Defects– for six (6) years from the occupation of the building; and 
• Minor Defects– for two (2) years from the occupation of the building.

 Defects Liability Periods (DLP) are measured from the date of the occupation certificate that allows residents to move into their new apartments. All contractors (builders) are responsible for building defects of a strata scheme building, so it's essential to work with your Property Developer to recall the Builder (sometimes the same entity) and its' sub-contractors. 

Both minor and major building defects are important; however, major defects are the source of the current heartache, stress and pain strata homeowners are experiencing, as seen in the news headlines recently.

 A major defect is the cause of an uninhabitable space that can stem from a failed fire safety system, failed waterproofing or the movement of foundations. Minor defects are small in nature, but we have seen owners stress just as much as significant defects.  

Construction defects can arise because of poor craftsmanship or the utilisation of inferior materials. Buildings with a long list of building defects that have not been addressed will contribute to higher maintenance costs (increased levies) and ultimately negatively impact the value of your property.

 What must Lot Owners or Owners Corporations do? 

Firstly, you want to speak to your Building and Facilities Manager and/or your Strata Manager to establish a process of capturing the defects and raise them with the Builder. Keep a good record of the defect list, which includes the picture, date the defect was captured, the date the Builder was notified; the Builders proposed action and repair methodology. Building and Facilities Managers can't sign-off on the rectification work; however, they can capture the raw data and present them to the Strata Committee for direction. 

 Most, if not all Strata Managers will recommend a Strata Committee to engage an expert Building Consultant to undertake inspections of the building at the end of the 12 months from occupation. It's crucial to understand defects entirely and that they don't go undetected. 

If the Builder is refusing to rectify the defect, then you should seek advice from a lawyer and start the process of applying to Fair Trading. The Department of Fair Trading will be your first level of authority that can assist you with a dispute resolution. A Rectification Order imposed by Fair Trade to the Builder will require them to rectify the defects in a specific timeframe. If the Builder doesn't attend to the defects, your lawyer will probably advise you to apply to NCAT to have the matter heard in court.

It's important to note that you always want to work in the spirit of harmony to avoid escalating defect issues. Litigation inside the courts are costly and sometimes out way the actual defect rectification cost. Ensure you collaborate with the Strata Committee and chose your battles wisely before engaging a lawyer that generate these escalating legal costs. Notwithstanding, exercising your rights through the judicial system should be used with dodgy or non-responsive Builders or Developers. 

If you want to learn more about how we can help you through this process, please email or call us using the contact page.