Defects are not uncommon when it comes to residential apartment buildings. However, identifying those defects and taking action at an early stage is critical, as Tony Mylne explains.
In the wake of Sydney’s recent residential tower evacuations, building experts have warned that many other high-rise buildings may also be at risk. Brisbane has recently seen unprecedented growth in the construction of multi-storey apartment buildings, but are owners getting what they bargained for?
As the law currently stands, apartment owners will generally find themselves without a claim in negligence against the builder of the development. This is due to the High Court’s decision in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288  HCA 36, where it was found that the builder did not owe a duty of care to the owners corporation in relation to latent defects. Furthermore, the Queensland Home Warranty Insurance Scheme does not apply to multiple unit dwellings over three storeys.
Because of this, apartment owners are often left trying to use Queensland’s body corporate legislation to pursue a subrogated claim in contract against the builder, or requesting the QBCC to issue the builder with a direction to rectify. Strict time limits apply in both circumstances. For example, the QBCC requires any complaint about defective work to be made as soon as possible and no later than 12 months after the owner notices the defects. The Commission only has the power to issue a direction to rectify within 6 years and 6 months of the relevant building work being completed. The limitation period for any contractual claim would expire even sooner after the completion of works.
Often defects in building work will not become apparent until many years after the project has been completed. This makes it essential for body corporates and owners to properly understand the time limitation periods that apply to their situation and take steps to protect their position. Engaging a building expert to prepare a report on any possible defects well prior to the expiration of the relevant time limitation periods would be a sensible strategy. In the event of defects, owners should ensure that they obtain legal advice on whether a claim may lie against parties other than the builder – such as the engineer and certifier engaged on the project.
Tony Mylne is a director in our Disputes and Litigation Team. He has over 20 years’ experience in construction and engineering disputes and has acted for body corporates in a number of latent defect disputes.
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