NSW home owners' dodgy construction claims curbed by government

New South Wales home owners' rights to claim compensation for structural defects in their home will be reduced after legislative changes that will soon take effect.

Currently, the NSW government grants a six-year warranty for "structural defects" made by developers or builders. The warranty now only covers "major defects", which the government defines as those that cause "the inability to inhabit or use the building (or part of the building) for its intended purpose," or "the destruction of the building or any part of the building" or "a threat of collapse" of the building or any of its parts.

Some speculate that the downgraded scope of the warranty will result in only a two year warranty being granted for many defects which were previously covered for six years.

According to David Bannerman of Bannerman Lawyers, the changes will mean home owners will no longer be compensated for issues such as external cracking, reducing costs for the government.

"The relief to the Government coffers should be immediate, because it has taken the extraordinary step of making many of the amendments, including the change from 'structural' to 'major' defects, retrospective," claimed Bannerman.

The changes introduced in the Home Building Amendment Act 2014 are likely to come into effect on 1 December.

For home owners who wish to make claims for building defects made within the past six years, Bannerman advised they take the following action before 1 December:

1. Commence legal proceedings against the builder or developer responsible for their home, where there is an available action for breach of the warranties (i.e. building defects), or
2. Where the circumstances and policy terms allow, lodge a claim with the home owner's warranty insurer.

Source: Bannerman Lawyers