Lot owners concerned about off the plan apartment defects in their schemes in the ACT have submitted these questions to our strata specialists.
Table of Contents:
- QUESTION: Our small Class A complex has many defects. We have claimed the builders warranty insurance. Is the owners corporation responsible for the remaining defects?
- QUESTION: What can we do when the Builder/developer does not fix the defects? Despite numerous attempts to contact, they refuse to respond to requests.
- QUESTION: Our builder has gone into liquidation and Builders Warranty Certificates have been issued by the Master Builders Fidelity Fund (MBFF). Can we claim for common property issues on builders warranty?
Question: Our small Class A complex has many defects. We have claimed the builders warranty insurance. Is the owners corporation responsible for the remaining defects?
I own a townhouse in a small Class A complex of seven that is almost four years old. We had a high number of defects, including significant structural defects. We have claimed the builders warranty insurance, and structural defects still need to be remediated.
Is the owners corporation responsible for the costs of these structural defects, or are individual owners responsible for the costs associated with their own townhouse? Is the owners corporation responsible for maintaining the common property after the defects have been remediated to an acceptable standard?
Answer: I strongly recommend all owners work together to resolve the structural defects
Building defects can be extremely difficult to resolve.
As you have noted, the builders warranty insurance (BWI) has been fully claimed, so one would assume that the owners corporation has engaged the services of legal counsel to advise and assist on the claiming of the BWI.
Unfortunately, there can be instances of the BWI not being enough to cover the repair of the defects. Further to this, the BWI can only be claimed if the builder is dead, missing or insolvent. Therefore you would not be able to take legal action against the builder for the remainder of the costs.
As it is an A class complex, the owners corporation would be responsible for the repair of any of the structural defects. Unfortunately you have not advised what the remaining structural defects are, so I am not able to give any specific answers.
That being said, as the complex is seven units, I strongly recommend all owners work together to resolve the structural defects.
If there is a defect internal to a unit that only affects that unit (i.e. leaking sink in the kitchen or bathrooms, shower waterproofing, missing kickboards, missing cornices, and similar), the repair would be the responsibility of the individual owner.
Steve Wiebe Bridge Strata E: steve@bridgestrata.com.au P: 02 6109 7700
This post appears in Strata News #722.
Question: What can we do when the Builder/developer does not fix the defects? Despite numerous attempts to contact, they refuse to respond to requests.
Answer: It is important that an Owners Corporation follow the necessary steps in documenting building defects and reporting them to the builder within the building warranty period
All buildings are subject of statutory warranties under the Building Act, and it is important that an Owners Corporation follow the necessary steps in documenting building defects and reporting them to the builder within the building warranty period.
There are varying options available to the Owners Corporation to address building defects, including Rectification Orders (under COLA) and Litigation. Without knowing the nature of the defects and other relevant factors, it is very difficult to provide any specific advice.
The safest approach is to seek formal advice relevant to your individual circumstances and follow the advice of the experts in their field. Your strata manager should be able to point you in the direction of reputable defect specialists and construction lawyers.
Nina Cannell Signature Strata E: nina@signaturestrata.com.au P: 02 6185 0347
This post appears in Strata News #507.
Question: Our builder has gone into liquidation and Builders Warranty Certificates have been issued by the Master Builders Fidelity Fund (MBFF). Can we claim for common property issues on builders warranty?
Our Unit Plan is class B with 6 townhouses, last unit sold a few months ago.
The building company has gone into liquidation. Builders Warranty Certificates were issued for each townhouse by the Master Builders Fidelity Fund (MBFF).
It is unclear to me that we can make a claim for building issues on common property – in this case, stormwater management related. Can we claim for common property issues on builders warranty?
Answer: There are a few pitfalls to making a claim on the MBFF
Following on from the Full Federal Court decision in Elara Apartments there are a few pitfalls to making a claim on the MBFF.
If you wish to fully understand the operation of this quite complicated ‘insurance’ product, I suggest you read and consider the Full Federal Court decision which is attached here: The Owners – Units Plan No. 3115 v The Trustees of the Master Builders Fidelity Fund Scheme [2019] FCAFC 227 (13 December 2019)
You will note that Christopher Kerin acted for the Owners – Units Plan No 3115.
Please advise as to the name of the builder and the address of the property and units plan number?
In short, I am available to be engaged by the owners to assist in making a claim.
Christopher Kerin Kerin Benson Lawyers E: enquiries@kerinbensonlawyers.com.au P: 02 8706 7060
This post appears in Strata News #505.
Read next:
- 3 Key Things To Research When Considering Buying A Strata Unit: Don’t Shy Away From It
- ‘We’ve reached a crisis point’: Experts decry ACT building industry
Visit Strata Building Defects OR Australian Capital Territory Strata Legislation
After a free PDF of this article? Log into your existing LookUpStrata Account to download the printable file. Not a member? Simple – join for free on our Registration page.
Have a question or something to add to the article? Leave a comment below.