Rights of Rectifying Defective Construction Work

One of the most common causes for disputes regarding construction contracts is whether the owner can terminate the contract for defective building work or must provide the builder with the opportunity to rectify any such defects.

The first step is to determine whether a defect in fact exists. In NSW, defective building falls into two categories; major defects (e.g., a building to be uninhabitable or under threat of collapse) or usual defects (all other defects). The rights and obligations of the builder and owner vary depending on how the defect is classified. Unsurprisingly, there are generally disagreements between the owner and builder about whether a certain defect is major or not, or indeed if it can be classified as a defect at all.

Even if the owner can prove a defect exists, and the defect is properly characterised, the arguments do not end there. The next issue is whether the builder has the first right to rectify such defects. At this stage, there has often been a breakdown in trust between owner and builder. The builder will generally want the first right to rectify the issue. However, given the previous defective construction work and related disputes, the owner may not trust the builder to properly rectify its mistakes, and instead seek a new builder to take over the project.

The NSW Supreme Court decision in Di Blasio Constructions1 has provided some helpful guidance on this issue. The Court held that is generally accepted that the owner must give the builder a reasonable opportunity to rectify any construction defects, even if the contract does not expressly require this. However, this does not apply where the owner’s refusal to give the builder that opportunity is reasonable or where the builder has repudiated the contract by refusing to conduct any repairs.

The onus is on the builder to prove the owner has acted unreasonably in refusing access. In determining whether the owner’s refusal is reasonable, the courts will consider all the circumstances of the relevant case. Special circumstances where a homeowner would not need to give access to the builder include threats or violence from the builder or the builder’s licence being subsequently suspended or cancelled. Another relevant factor for the courts to consider is whether, in the light of the builder’s past failure in attempting to rectify the defects, the owner has reasonably lost confidence in the willingness and ability of the builder to fix the defect. As can be seen from the above, construction disputes can be complex and involve technical legal arguments. If you are a party to a construction contract where a defect has been alleged, no matter what side of the contract you are on, it is vital to be aware of your legal rights and obligations.

You may also be interested in

    Fixed Pricing Agreement

    The initial consultation is FREE, discussing the scope of services and outcome. You will be provided with the total agreed cost in our pricing proposal, no estimates, hourly rates or ranges – just a FIXED PRICE AGREEMENT.

    Because we believe in certainty.

    If you have a question or a query you can email us using the contact form or call us on +61 3 9212 0238

    CLIENT TESTIMONIALS

    Cameron Deane

    “The assistance provided by Harriet with reviewing and negotiating the terms of our building contract, which encompassed both a significant financial commitment and extensive amount of renovation work, was essential to providing us with peace of mind that our interests were covered legally at all times. Harriet's professionalism, attention to details and expertise in this field were beyond reproach and I highly recommend her services to anyone considering any building related work.”

    Cameron Deane

    Construction Client

    “Harriet, can I just thank you for being so incredibly kind to us. Sean was right – you are amazing.  I wanted to try and express that in person during our meeting but it’s been such a difficult week I knew I would blub all over you if I started.  Never a good look – especially when you’re on the other end trying to juggle London and Kyrgyzstan! We really appreciate everything you have done (and are doing for us).  Without you, all we would have is a slowly imploding bathroom with a loadbearing wall that could collapse without warning. Gives me anxiety every time I think about it!”

    Construction Client

    Chanoch Serebryanski

    “Very professional and easy to deal with. A real pleasure to use at a great value.”

    Chanoch Serebryanski

    David Cherny

    “Highly recommend Warlows Legal. Harriet and her team were professional and supportive throughout, couldn't have asked for a better service.”

    David Cherny

    Chaim Korik

    “Harriet and team took the time to listen to our needs and ensure we had all the contracts in a timely manner. Felt like working as a team!”

    Chaim Korik

    Sarah Chanah Sufrin

    “Harriet really cares for her clients and works tirelessly to achieve the best result for them every time.”

    Sarah Chanah Sufrin

    Chaya Wolf

    “Excellent experience with Warlows Legal. Harriet is personable, professional and of a very high standard. Would recommend to everyone seeking legal advice.”

    Chaya Wolf

    Avi Kluwgant

    “My experience with this company has been an absolute breath of fresh air. I cannot recommend the legal services offered here enough. Thank you!”

    Avi Kluwgant

    MySmallHelp Australia

    "I'm Matt from MySmallHelp Australia. I was looking for a friendly, trustworthy legal firm to set up the charity.  After talking with Harriet for a short time I found her to be knowledgeable and able to communicate fairly complex legal terms simple manner. Harriet and her team delivered exactly what they said they would in a very timely fashion. Warlows Legal team achieved these deliverable above my expectations. I can t recommend them enough. Thanks you so much for your help and guidance."

    Matt Rai