In June 2020 the Design & Building Practitioners Bill came into effect in NSW. The bill will enable apartment owners to seek damages for building defects in apartment complexes as the new legislation places an all-encompassing ‘duty of care’ on builders and developers.
Currently, homeowners have two avenues available to them to seek compensation when defects are an issue with their property. For properties up to three stories in height, property owners are covered by the Home Building Compensation Fund. This applies to all building works greater than $20,000 in value and compensation is capped at $350,000.
For properties above three stories, the Strata Building Bonds and Inspections Scheme affords some protection but it is only valid for a three-year period and reparations are capped at 2% of the construction costs.
The new Design and Building Practitioners Bill requires legal action to be launched within six years of a defect becoming known and covers defects for a period of 10 years after a building’s completion.
And therein lies the rub – the need for the property owner to take legal action through the court system and to prove negligence. With a history of such claims being hard to prosecute, leaving aside the inhibitive legal costs, many may shy away from this course of action particularly when confronted with a David vs Goliath scenario.