What is defective building work?

Definitions

The policy defines defective building work as work considered faulty or unsatisfactory. It includes, for example, work that:

• does not comply with the Building Act 1975 (Qld), the Building Code of Australia or Australian Standards; or
• involves the use, construction or installation of a manufactured product in a way that does not comply with the manufacturer’s instructions.

This defective work can be structural or non-structural.

“Structural defective building work” means work that is faulty or unsatisfactory because it:

• adversely affects the structural performance of a building; and/or
• adversely affects the health and safety of occupants of a building; and/or
• adversely affects the functional use of a building; and/or
• allows water to penetrate the building.

“Non-structural defective building work” means work that is faulty or unsatisfactory because it:

• does not meet a reasonable standard of construction or finish expected of a competent holder of a contractor’s licence of the relevant class; or
• has caused a settling in period defect in a new building. i.e. building work that does not perform at a standard reasonably expected of work carried out by a competent holder of a contractor’s licence of the relevant class.

Under the Act, “building work” encompasses a wide range of construction activities, including:

• the erection, construction, renovation, alteration, extension, improvement or repair of a building;
• the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage;
• preparation of plans or specifications for building work;
• fire protection work;
• mechanical services work;
• site testing and classification; and
• termite and building inspections.

The Act also contains a definition of “tier 1 defective work” for which the QBCC can cancel a building contractor’s licence, and ban the person from again holding a licence for a three years, or for life (subsequent offences).

This defective work is “grossly defective building work” that:

falls below the standard reasonably expected of a licensed contractor for the type of building work; and either

adversely affects the structural performance of a building to the extent that a person could not reasonably be expected to use the building for which it was, or is being, erected or constructed; or

is likely to cause the death of, or grievous bodily harm to, a person.

Carrying out this work includes directly or indirectly causing the work to be carried out, or providing advisory, administrative, management or supervisory services for it.

What are your rights when your home or building has a defect?

Most standard form commercial and domestic building contracts used in building and construction contain specific steps which must be taken to resolve any defect dispute.

If negotiations with the building contractor do not resolve the dispute, the owner may lodge a formal complaint with QBCC within 12 months of becoming aware or the defect.

The QBCC and the building contractor will often engage engineers and other building professionals to assess the complaint.

The QBCC has the power to direct a building contractor to rectify building work that is deemed defective or incomplete, and to remedy any consequential damage, within a stated period, via issuing a Direction to Rectify (DTR).

In most cases, the rectification period is 35 days. The DTR must be issued within six years and three months (structural defect), or 12 months (non-structural defect) of the work being completed.

If the building contractor fails to comply with the DTR, the QBCC may start proceedings in the Queensland Civil and Administrative Tribunal (QCAT) or Magistrates Court.

If the QBCC is unable to resolve a defect dispute, it may issue a certificate which allows the building owner to apply to QCAT for dispute resolution.

There are circumstances in which another building contractor can rectify work, such as when the contractor has been given an opportunity to rectify work in accordance with the building contract but has refused. However, a successful claim for damages against the original builder may be inadequate to cover the cost of the rectification by the subsequent builder, so each case should be carefully assessed.

Queensland Home Warranty Scheme

This scheme involves claiming on home warranty insurance, which must be taken out by a building contractor for residential work valued at more than $3300 in Queensland.

It offers several protections for the building contractor and the owner, including for when the building contractor fails to rectify defective work.

A consumer must lodge a formal complaint with QBCC under this scheme within three months (structural defect) or seven months (non-structural defect) of becoming aware or the defect.

The QBCC pays out a successful claim, then pursues the building contractor to recover the amount.

Examples of defects

The QBCC publishes a Standards and Tolerances Guide to enable building contractors and consumers to reference building standards and quality in determining defects.

The guide applies only to building work as defined in the Act, so  it does not include, for instance, electrical work (which is covered by the Electrical Safety Office).

For example, in relation to plumbing, the guide dictates that gutters are defective if they retain a depth of more than 10mm of water, and in relation to floor and wall tiling, tiles are defective if, within the first 12 months of completion of the work, “they are cracked, pitted, chipped, scratched, or loose unless such cracking, pitting, chipping or scratching has been caused by actions or inactions of the owner or others outside of the contractor’s control”.

Consequential damage

A building contractor can also be directed to rectify consequential damage caused by defective building work.

Under the Act, consequential damage is damage caused by building work at a residential property, regardless of any intention, negligence or recklessness of the person carrying out the work. Such damage includes:

• the impairment of drainage;
• the undermining of a fence, retaining wall or other boundary structure;
• the compromising of the structural integrity of a building, swimming pool, or wall;
• the cracking, lifting or cratering of a driveway or path;
• water penetration; and
• termite infestation.

How Gibbs Wright Litigation Lawyers can help

You can discuss building disputes such as building defects and commercial or domestic building contract matters with our construction lawyers here at Gibbs Wright Lawyers. Call us today for a no-obligation, confidential consultation.