Browse Forums Building A New House 1 Jul 05, 2014 10:47 pm Hi, I'm in process of signing the building contract for my new house with a reputed builder in melbourne. I'm a first home buyer. I was bit surprised that the contract had no clause of warrantee/ guarantee in it. The sales consultant had initially mentioned that the company provided 10 year structural guarantee but nothing of that is mentioned in the Contract. She also mentioned that the guarantee offered was more than what was legally required and offered by other builders (i.e. 7 years) Could someone let me know as to what needs to added in the contract to ensure that I'll be covered for the maximum amount of time.? When I questioned the my builder regarding this they just added section 134 of the building act in the post contract variation document. 1. Is post contract variation document a legal document or should I get the builder to include this point in the original contract? 2. Does section 134 cover me off for 10 years? Any pointers will be appreciated. Thanks in advance! Re: Structural/ non structural guarantee for new house 2Jul 06, 2014 8:34 am I'm not a lawyer but this is how I see it Under the Contract the builder is required to build a house that is 'suitable for purpose' That is it complies with the building codes and regulations and will not suffer structural damage or other major defect. If you suffer a problem you can go back to the builder and if the defect was as a result of his construction or the materials they supplied, the builder is liable to remedy it. (Any Guarantee is really just a piece of paper that explains how the builder will fulfill his liability) The purpose of section 134 was to place a limit of 10 years on the builders liability as previously builders were being chased for problems arising 20 or 30 years later, which was considered unreasonable. (If you want to see how unreasonable some homeowners can be see this link http://www.anewhouse.com.au/2014/04/bew ... emodeling/) The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Structural/ non structural guarantee for new house 3Jul 06, 2014 11:33 am Brian I just had a chuckle at your post and the associated links. It reminds me of something similar that happened to me a few years ago. In 1983 I built a small timber deck ( 6m x 4m ) on the Southern side of a house for a client over a few weekends as I was installing kitchens and bathrooms fulltime during the week for another company and the homeowner wanted to do as much labouring work for me as possible to keep costs down. Job done, satisfied customer and got paid. I remember stressing to him that he was going to have to re-coat the decking with oil every couple of years to stop decay as it was on the side of the house that received no sun at all for most of the year. Fast forward 27 years later and I got a phone call from someone saying "a deck I'd built " a few years ago " was starting to fall to bits and would I fix it under warranty". "Hmm, I'd have to check my books " I told him as his name didn't ring a bell so I looked up the address. Sure enough he was the third owner after the original client that I built the deck for so I gave him a ring back. "Sure" I said " as long as you can give me all the invoices for the licensed painter that re-coated the timber deck every two years". "I can't do that" he said, "I did most of it myself better than any painter could and anyway you should guarantee your work" ! "27 years later - are you kidding" my reply. "I'm going to speak to my lawyer and the Builders Licensing Board" he said( the BLB was disbanded and replaced by the NSW Dept of Fair Trading nearly fifteen years ago ). "Fine" I said and I never heard from him again. Some people just have no concept of reality and they think it is always someone elses fault. I can see why the ten year rule came into being with clowns like this around. Stewie Re: Structural/ non structural guarantee for new house 4Jul 06, 2014 11:47 am Well to avoid the discussion going off-track. I just want to understand if I should be including warranty clauses in the contract I'm signing or am I covered by law in any case. ? I'm a FHB and just want to make sure that I do not have to regret after signing the contract. One of the reasons I went on with this builder was that they offered me 10 year structural guarantee in their sales pitch before taking the deposit. Also, I was told that this guarantee is something more than what was required legally or offered by other building companies. Thanks for your inputs and comments. Re: Structural/ non structural guarantee for new house 5Jul 06, 2014 2:04 pm Hi Roller, That's a good question. The Vic Domestic Building Contracts Act states the following implied warranties: DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 8 Implied warranties concerning all domestic building work The following warranties about the work to be carried out under a domestic building contract are part of every domestic building contract— (a) the builder warrants that the work will be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract; (b) the builder warrants that all materials to be supplied by the builder for use in the work will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new; (c) the builder warrants that the work will be carried out in accordance with, and will comply with, all laws and legal requirements including, without limiting the generality of this warranty, the Building Act 1993 and the regulations made under that Act [4] ; (d) the builder warrants that the work will be carried out with reasonable care and skill and will be completed by the date (or within the period) specified by the contract; (e) the builder warrants that if the work consists of the erection or construction of a home, or is work intended to renovate, alter, extend, improve or repair a home to a stage suitable for occupation, the home will be suitable for occupation at the time the work is completed; (f) if the contract states the particular purpose for which the work is required, or the result which the building owner wishes the work to achieve, so as to show that the building owner relies on the builder's skill and judgement, the builder warrants that the work and any material used in carrying out the work will be reasonably fit for that purpose or will be of such a nature and quality that they might reasonably be expected to achieve that result. None of which mentions a timeframe. Consumer Affairs Victoria, however, tells us that: Implied warranties automatically apply to all building work, regardless of the cost or whether or not there is a written contract. These warranties transfer to a new owner for up to 10 years from completion of the work. So they are obviously relying on Section 134 of the Building Act for this. As far as I can see the notion that you are covered for structural defects for six years only and non-structural defects for two years comes from the limitations on domestic building insurance cover which is an altogether different thing. There is a lawyer on this forum - I think they are called Boutique Lawyers. Why don't you try sending her a PM and then we can all know the answer! Re: Structural/ non structural guarantee for new house 7Jul 06, 2014 2:30 pm Hi roller, This is her profile page: http://www.homeone.com.au/member/boutiquelawyers There is a send message button at the top. Re: Structural/ non structural guarantee for new house 8Jul 07, 2014 9:40 am Hello, I am writing to you to respond to some of your quieries as outlined below: 1. What is the implied guarantee by law for the building/construction? Do I need to specifically get any guarantee clause added in my contract explicitly to cover myself off for 10 years? What Liliana has posted below is correct. The domestic building contracts act implies warranties. You may sue a builder for structural defects for up to 10 years. Did the builder provide you with a pro-forma contract such as a MBAV contract? the warranties still are implied whether or not they are mentioned in the contract. 2. Is Post contract variation document a legal document.? Yes, if you have signed and agreed to the variation and if it is in fact a variation. 3. Is the builder bounded by law to offer guarantee/ warrantee even though nothing of that sort is mentioned in the contract document? Yes, it is in the Act, therefore the law is that these warranties are implied even if they are not mentioned in the Contract. Re: Structural/ non structural guarantee for new house 9Jul 07, 2014 9:58 am Thanks so much for the replies. They have been really helpful. One more question before I log off - The implied warranties are for 10 years but Lilliana also mentioned about the domestic building insurance cover.. Whats the difference between the two ? "you are covered for structural defects for six years only and non-structural defects for two years" Thanks in Advance!! Re: Structural/ non structural guarantee for new house 10Jul 07, 2014 5:59 pm roller Thanks so much for the replies. They have been really helpful. One more question before I log off - The implied warranties are for 10 years but Lilliana also mentioned about the domestic building insurance cover.. Whats the difference between the two ? "you are covered for structural defects for six years only and non-structural defects for two years" Thanks in Advance!! The builder is liable for ten years . . . but if the builder goes out of business the insurance will only pay you for the shorter period. The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. From a pure legal perspective, if you've signed the variation, it is a very high bar to have it set aside. No-one can give you legal advice on a forum, but you would need… 3 5478 Thanks. There are plenty of builders around my suburb. I'll make sure to do some door-to-door knocking, or note their building details on the temp fence. 4 4746 Building Standards; Getting It Right! Long story short, a toilet room is going to back onto our main bedroom and I want to make it close to soundproof. Im going to build two frames (pretty much a room within a… 0 10214 |