Building Disputes (NSW)

If you have a dispute with a builder or tradesperson in New South Wales, you can seek assistance from Fair Trading or from NSW Civil and Administrative Tribunal (NCAT). You can also initiate proceedings in a court. This page deals with building disputes in New South Wales.

Legislation

In New South Wales, building disputes are regulated by the following legislation:

• Home Building Act 1989
• Fair Trading Act 1987
• Civil And Administrative Tribunal Act 2013

Fair Trading

If you have a dispute with a builder or tradesperson in New South Wales and cannot resolve it directly with the other party, you can seek dispute resolution through Fair Trading.

Fair Trading can assist with the following types of dispute:

• incomplete or defective domestic building work
• damage caused to other structures by domestic building work
• specialist work including electrical and plumbing work, both in domestic and non-domestic buildings

Either the trader or the customer can initiate a request for Fair Trading to assist; however, for dispute resolution to occur, both parties must consent to the process.

If a dispute is about the quality of work that has been carried out, the NSW Guide to Standards and Tolerances 2017 can be used to inform parties about acceptable standards of workmanship.

Statutory warranties

Under Part 2C of the Home Building Act 1989, there are a number of warranties as to building work. These warranties require that building work is carried out with due care and skill, in accordance with the law, within the timeframe stipulated, and using materials that are suitable for the purpose. If the construction work of a dwelling, the work must result in a dwelling that is reasonably fit for occupation (section 18B).

If any of these warranties are breached, proceedings can be initiated within six years of the breach (in the case of a major defect) or within two years of the breach (in any other case). This period is extended by another six months if the breach becomes apparent in the last six months of the limitation period. The warranty period starts on the date the work is completed. If the work is not completed, it starts on the date that the contract is terminated or on the date the work ceases.

Proceedings under the Home Building Act 1989 can be started by applying to NCAT. However, before this application can be made, dispute resolution through Fair Trading must have been attempted (unless an exemption applies).

Exemptions from dispute resolution

The following types of building disputes are subject to exemptions from the requirement to attempt dispute resolution:

• Recovery of debt by a contractor
• Cross claims to existing NCAT matters
• Claims involving unlicensed contractors
• Claims by traders against subcontractors regarding defective work
• Claims involving companies that have been deregistered
• Appeals against decisions by insurers under contracts required to be entered into under the Act
• Claims against parties that have gone into administration liquidation or bankruptcy

NCAT

If a dispute has been referred to Fair Trading and dispute resolution has been unsuccessful, or if an exemption applies, a party can make an application to NCAT. Once the application is received, the matter will be listed for conciliation and hearing.

Conciliation is an informal dispute resolution process where parties are supported to understand each other’s point of view, negotiate and try to reach an agreement. If conciliation is not successful, the matter will proceed to hearing. Parties generally represent themselves at NCAT. Permission must be sought to have legal representation.  

Under section 480 of the Home Building Act 1989, NCAT can make any of the following orders:

• An order that one party pay money to the other party
• An order that a specified sum of money is not due or owing or that a party is not entitled to a refund
• An order that a party do specified work or perform a specified service or obligation
• An order that a party do or perform, or refrain from doing or performing, a specified act.

Jurisdiction

NCAT has jurisdiction to hear building claims involving up to $500,000. Matters involving more than $500,000 and less than $750,000 can be dealt with by the District Court. Matters involving more than $750,000 must be dealt with by the Supreme Court.  

If you require legal advice or representation in any legal matter, please contact Go To Court Lawyers.