Defects Claims Everything you wanted to know but f id tk were afraid to ask PDF
Preview Defects Claims Everything you wanted to know but f id tk were afraid to ask
Defects Claims Everything you wanted to know but were affraiidd tto askk Jennyy Fitzalan OOvveerrvviieeww • Legal relationships – builders,, developpers,, owners corpporation – contract, statute, tort • IInsurance • Defect? • War Stories CCoonnttrraacctt Construct Only Design & Construct Developer Builder Architect Waterproofer Certifier Owners Corp Claim up to 6 yrs from breach CCoonnttrraacctt Owners Corp Construction Contract Builder Architect Plumber Tiler CCoonnttrraacctt Equipment /Materials/ Supplies Warranties eg carpet, lifts, pumps Must sue builder to remedy defects Defects liability period Work End of Defects Date of Practical commences Liability Period Completion 12 mths Right under the contract to direct builder to remedy defects Tort‐ breach of statutory warranty Statutory Warranties OOwwnneerrss CCoorrpp BBuuiillddeerr Building Contract Statutory Warranties Home Building Act 1989 DDeevveellooppeerr BBuuiillddeerr •Residential Building Work /dwelling(s3) Building Contract •Statutory warranties (s18B) ‐proper and workmanlike manner ‐in accordance with plans etc ‐materials suitable for the purpose ‐comply with the law ‐within time Statutory ‐fit for occupation OOwwnneerrss CCoorrpp Warranties s18C ‐work and materials fit for specified purpose •Proceedings for breach must be commenced within 7 yrs – after completion (s18E) TToorrtt ‐ nneegglliiggeennccee DDuuttyy ooff CCaarree DDutty Owners Corp Builder To take reasonable care when constructing the building/house Time 6 yrs from when the cause of action accrues (damage is sustained) DDuuttyy ooff ccaarree Developer Builder SSuubbsseeqquueenntt OOwwnneerrss ‐ Bryan v Moloney 1995 Duty of care ‐ Woolcock Investments 2004 OOwwnneerrss Corp HHoommee OOwwnneerrss WWaarrrraannttyy IInnssuurraannccee HHoommee BBuuiillddiinngg AAcctt 11998899 Insurance Builder Owner • ‘Residential building work’ (s3) (Residential bld work) • > $12,000 (s 92) Insurance ((s 92)) IInnssuurraannccee Builder Developer • Insure for loss from non‐completion because of insolvency, death or Insurance disappearance (s 99) (s99) OOwwnneerrss •Cover successors in title (s99) Corp • Exemption (Reg 74) HHoommee OOwwnneerrss WWaarrrraannttyy IInnssuurraannccee HOW 1 HOW 2 HOW3 MMaayy 9977‐ JJuunn 0022 JJuull 0022 – pprreesseenntt 3311 DDeecc 0033 (Amended Dec 03) First resort scheme Last resort scheme Last resort scheme OOwner →→ BBuiilldder’’s IInsurance OOwner →→ Buiilldder →→ OOwner →→ Buiilldder →→ insolvent, dies or disappears insolvent, dies, disappears or cancellation of licence ((s 9999)) Notice Period: 6 months from date of awareness of potential claim (Reg 63) Lodge claim within 7yrs from Lodge claim within (s103B, Reg 71): practical completion • 2 yrs from practical completion for general defects; and • 6 yyrs from ppractical comppletion for structural defects Exemption – if has > 3 ssttoorreeyyss aanndd >> 22 ddwweelllliinnggss (Reg 74) DDeeffeeccttss • Fails to comply with the contract (plans, sppecifications, standards ((Buildingg Code of Australia etc) •• FFaaiillss ttoo ccoommppllyy wwiitthh tthhee llaaww ((wwaarrrraannttiieess)) • If construct only & not fit for intended purpose → not a defect of construction eg nnooiissee • Expert
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