A home building dispute can be stressful, cause unnecessary delay and financial loss. If not managed quickly, a dispute can become protracted and may need to be resolved by taking legal action or proceeding through a tribunal or court.
Home building disputes usually relate to claims for defective or incomplete building work, delays, unanticipated or unexplained price increases, variations, insurance claims and non-payment by a homeowner.
Residential building work in New South Wales is governed by the Home Building Act 1989 (NSW) and associated Regulations which prescribe minimum building standards, consumer protection provisions and statutory warranties for all home building work.
The laws also provide for dispute resolution processes with unresolved home building disputes proceeding to the New South Wales Civil and Administrative Tribunal (NCAT) which may determine matters about residential building work up to the value of $500,000.
Applications to NCAT may be lodged by homeowners, building contractors and insurers regarding a ‘home building’ matter, which includes residential work performed by a building contractor or tradesperson such as a new home, extension, renovation or external work such as swimming pools and retaining walls.
A party to NCAT proceedings is not automatically permitted to be legally represented and must request permission before a matter is heard or at the hearing. Generally, permission to be legally represented will be allowed in circumstances where:
- the proceedings involve a claim or dispute in the Home Building List for more than $30,000;
- the other party is a lawyer or represented by a lawyer;
- the other party is a government agency;
- the Tribunal is satisfied that a party will be at a disadvantage if not represented;
- the Tribunal believes that the matter involves complex issues.
Time limits apply for lodging proceedings with NCAT. Generally, claims for breach of statutory warranties must be made within six years for major defects and within two years for other defects. Otherwise, for claims regarding the supply of building goods or services, applications must be lodged within three years. Determining the correct time limit applicable to your claim can sometimes be difficult so it is important to have a potential building claim assessed promptly.
In NCAT proceedings, rectification of the defective building work by the party responsible is generally the preferred outcome.
Conciliation or mediation is often used to resolve the matter before proceeding to a tribunal hearing. This is a private process whereby a tribunal member encourages the parties to reach an agreement and binding terms of settlement prepared.
Complex building matters require careful planning before hearing and an expert witness, with expertise in a particular field, may be retained to prepare a report to assist in reaching a reasonable outcome. Experts are required to be impartial and objective and must adhere to strict codes of conduct. The identification and proper briefing of an expert witness (which is usually carried out by a lawyer) is essential to ensure that all matters in dispute are addressed and that the requested report complies with the tribunal requirements.
Ideally, home building disputes may be managed through sensible and practical negotiation between the parties. However, for many reasons a resolution is not possible as communication breaks down, or the parties are uncertain (or disagree) about their legal position. In such cases it is wise to obtain professional advice.
Our building and construction team has a wealth of legal and practical experience in the construction industry and can assist building professionals, homeowners and community associations to negotiate and resolve a building dispute, efficiently and wherever possible, through negotiated dispute resolution processes.