The Defect Liability Period – Your Protection
The defect liability period refers to the period of time described in your building contract at the completion of your home extension, where the builder is required to rectify the outstanding issues identified by the building surveyor, the owner or owner’s advocate (eg a building consultant). They are generally minor faults and do not stop the project from reaching “completion (i.e. complete in accordance with the plans and specifications)” such as doors and windows that do not close and loose tiles. The contract between you and the builder will spell out the builder’s defect liability period, usually between 3 – 6 months after completion of your project. It is important to note it is not the same as the statutory Warranty defect period.
Each state has its own statutory warranty legislation. It is a set of promises that is implied in the contract. For Victoria, the claims limitation period is usually 3 months from hand-over until 6 years from the date of completion for structural defects and 2 years for nonstructural. During the defect liability period, you need to check that any issues raised in the final inspection (carried out by the building surveyor) have been rectified and any new problems found by you or a third party, are also dealt with. You can give the builder a copy of the Surveyor’s (& any other) reports and ask them to fix the outstanding issues.
In some cases, you may be able to hold back payment (retention) until the problems are rectified. Sometimes the building contractor themselves may hold a retention for some of the sub contractors’ works to ensure they aren’t held responsible for faulty work of other tradespeople.
It is important to be aware that damage incurred during the clients’ occupation of the building is not covered. Also, normal wear & tear and items covered by their own manufacturers’ warranty are not items the builder is responsible for.