Builder’s Warranties and the Law

Builder’s Warranties and the Law

(The below information and advice is general in nature and is in line with the current legislation as at 08/01/2018)

There are lots of myths about what is covered by a builder’s warranty, what the acceptable standard of workmanship is and how long the warranty should last under the law.

Warranties are covered by the Domestic Building Contracts Act 1995 and consumer guarantees by the Australian Consumer Law.

Your building contract should define your warranty rights, so ensure you read this before signing. Further, registered builders and tradespeople must have insurance to cover projects over $16,000 that covers insolvency or if they simply disappear. It is an obligation of your builder to provide you with their policy and a certificate of insurance before you pay your deposit. It’s always a good idea to request a copy of the builder’s public liability insurance certificate so you are safe in knowing they are covered.

Implied warranties apply by law, cannot be signed away and last up to 10 years from the completion of work even if the property is sold to a new owner. This is covered by the Building Act 1993. Implied warranties automatically cover domestic building regardless of cost and whether or not there is a written contract. Implied warranties ensure builders and tradespeople (Information below from Consumer Affairs Victoria):

  • carry out the work in a proper and workmanlike manner, in accordance with the plans and specifications set out in the contract
  • ensure all materials supplied are good and suitable for the purpose and are new, unless otherwise stated in the contract
  • carry out the work in accordance with all laws and legal requirements
  • carry out the work with reasonable care and skill and complete works by the date (or within the period) specified by the contract
  • ensure new homes, extensions, renovations, repairs and kit homes (or similar) are suitable for occupation when completed
  • ensure other types of work and the material used are reasonably fit for the intended purpose

As a consumer, if there is a defect that causes the item/product to not meet a consumer guarantee you are entitled to a refund, repair, replacement or compensation. Repaired or replaced items retain the warranty and are eligible to claim against in the future if problems occur.

Every situation is different, so it’s best to seek the proper legal advice before making your claim. More information and helpful links can be found at the consumer affairs website below:

Implied Warranties on Home Building Work:

https://www.consumer.vic.gov.au/licensing-and-registration/builders-and-tradespeople/running-your-business/warranties-and-insurance/implied-warranties-on-home-building-work

Implied Warranties and Domestic Building Insurance:

https://www.consumer.vic.gov.au/housing/building-and-renovating/checklists/implied-warranties-and-domestic-building-insurance

Guarantees That Apply Automatically:

https://www.consumer.vic.gov.au/products-and-services/refunds-repairs-and-returns/guarantees-that-apply-automatically

 

Need more information about builder’s warranties and consumer guarantees? Feel free to contact Jess at Savoy Real Estate on 0417 787 985.

 

 

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