Building defects? Owner?, The law is not your friend!

Most people would assume that if there are defects in your new building that the builder would be obliged to fix the defects. Whilst this is true and the builder is legally obliged to fix defects under builder’s warranty (10 years in Victoria) there may be a very nasty exception for defects that are very costly to fix. This could leave a building owner in a situation where there is only a cosmetic fix or a nominal compensation for a major defect. How is this so?

It has to do with a common law precedent Belgrove vs Eldridge which in the interest of avoiding “economic waste” stipulates that rectification work will only be ordered where it is necessary to achieve conformance and further that it is a reasonable course of action to adopt. In other words, where the cost of rectification is disproportionate to the benefit to be gained the rectification will not be ordered.
A particular example is say where Colorbond flat roof is specified but instead it is built in Zincalume. If there are no issues with town planning it seems that there is very little to be gained by removing air conditioners, lift the roof and replace roof sheets with Colorbond. A monetary compensation to the owner equivalent to the difference in cost between zinc and colour roof may seem appropriate.

Now consider a scenario where you have a competent builder who has in place and maintains a quality assurance system. Errors and mistakes can still occur but the incidence and the severity of the rectification is likely to be lower and we could say that the builder has exercised due skill and care as required by warranties.
I have no problem with such builder having the protection of Bellgrove vs Eldridge doctrine. However there are two scenarios that work in opposite direction.
The first is the fact that quality supervision and the maintenance of a QA system is a costly item and there is a temptation to cut it back beyond the bone relying instead on tradies on site “to do the right thing” even if some have been screwed on price. The money that should be spent on supervision and QA instead is banked as builder’s bonuses.
The second is that typically builders will take on more work than they can comfortably carry out, thereby stretching ever further what scant supervision there is.
The result is that builders bank handsome profits (obcene perhaps) whilst short changing customers on delivery and quality and knowing they can do so with impunity because of our inept and corrupt building control system. Furthermore they know that if they truly blunder they may get escape ticket from Bellgrove vs Eldridge

Australia is supposed to be a first world country but it is building its buildings without mandatory QA systems and delivering third world results as demonstrated by slab heave, multi storey cladding fiasco as well as poorly built, fire risky and leaking apartment buildings.

Having spent last 15 years dealing with building defects and disreputable things done by reputable builders I would suggest that the protection of Bellgrove vs Eldridge against building defects should only be available to the builder if the builder can demonstrate the QA system was applied in full compliance. In all other cases it should be pull down and rebuild. Nothing works as well or as fast as when the builder has to pay for own mistakes.

For the owner, the majority of potential problems can be avoided or dealt with competently by their own independent building stage inspector, performing inspections at critical stages of the build.

It is always better to avoid building problems and defects rather than trying to deal with them afterwards.

This is where the industry is still not working in the best interest of the owners. Where the builders and the inspection industry still do not want to fix the gap between the intent of the law (independent building inspectors mandated by law) and the need to hire an additional building inspector.

Where volume builders 'force' owners to use their preferred inspector, against the spirit of the law, and they work closely with the builder and now the owner. The HIA still do not have mandated rules for those inspectors to perform any level of detailed inspection or at more than 3 stages (or at required bank payment release stages).

Owners shouldn't have to engage an additional inspector to check in detail something that most volume builders have their preferred inspector superficially inspect. Most volume builders will refuse to communicate with your inspectors if you do not choose their preferred inspector.

This post wouldn't even be an issue if all building inspectors were mandated by law to perform detailed inspections of those engaged separately. But then that would cripple the 'additional' inspection industry and that's why they're not actively working toward industry change either.

The law is a arrsee, customers have so much more protection when buying a shirt.
One thing that everyone should be doing is to keep bugging local politicians, this will make a difference, over the years many good results for various situations have come from this aproach.
Putting a face on a problem will help, unfortunately if no hot patoto is present, nothing will change.

The stupid thing in all of this is the fact that if the builder (well in my experience the cause was individual tradespeople - for whom the builder has to be responsible) just did it right in the first place, you wouldn't need laws & inspections etc & it'd be cheaper for the home-buyer as well as more profitable for the builder.

That's the whole point Forg, it's the builder that's banking $5-10k /home as extra bonus instead of spending it on supervision, communication quality control, contract admin and training of supervisors. They get away with it with impunity because of inept/corrupt building control and because of their market power.
Banking money beats doing the right thing.

HIA has the power to enforce the spirit of the law, but there isn't a push from those profiting (builders, inspectors) to affect positive change. Where the volume of owners building one or two houses in their lifetime doesn't have the time or power to affect this change.

HIA is builder's association representing their member interests, I know I was a member for many years before retiring from building. It has no legislative power but has power of size that can influence the government and it does. Owners have no power because they are just grains of sand on the beach.


The rise of private inspections is due to the failure of building control. I am working because people need me, otherwise I would be fishing.
Currently mandatory inspections are only for safety, health and amenity and are not quality control or contract conformance and mostly not compliance with regulations. If you read occupancy certificate it will clearly tell you it is no evidence of compliance. Building inspectors doing mandatory get paid around $120 per inspection, what will you get for that?
Quality control, contract conformance and compliance is a black hole in our building industry so if registered building inspectors are not providing it , who is? Private building consultants.
To provide 5 competent inspections (1 pre contract and 4 during build) will cost around 3K .
You could ask government to provide that service and pay 3K and get nothing for it or you can pay your private inspector and get good value for your money. (assuming you have chosen wisely after due diligence)
If you are a consumer and are waiting for government to do something for you, you will grow very old waiting.

Most people using volume builders will have signed to their volume builders preferred inspector. Which for the total price of the home will (or should) incorporate those 'competent' inspections. So they're already paying the 3K in their total home cost, and then pay additional inspectors like yourself.

Someone is double dipping, and it's not the owners.

Volume builders inspector is like having no protection at all, none, zero, dougnuts, when you work for the builder, the one who is paying you, your super compromised, only a complete nivea buyer would take such a risk, I know for a fact as told to me, we dish out best trades to customers with knowledge and independent inspectors, last are the pie in the sky types.

I think there is a slight misunderstanding, by law you have to have a separate 'independent' company operate as your building surveyor/inspector. Volume builders do not have their own building inspectors, but they do have preferred company's that they'll only work with directly and pay for. If you deviate from that supplier, or if you even use that same supplier by no through them (volume builder) they'll not pay for or talk directly with them.

Its only now that you must hire your own building surveyor or RBS I think it's been in law for 12 months or so. But i know that some builders still tell consumer's no don't hire an inspector because it will make your build longer or they say you will not be covered by the builder, the reason iam saying this its because I was reading this on one post on product review website I found that very strange to read so I posted back saying its a crap get your own building surveyor its on the VBA website. Not sure what happens after that.

So if you have a private inspector and defects were picked up but not acted on by the builder is that evidence enough that the builders QA was not adequate? Surely the cost of fixing the defect during the build would be cheaper and if the builder chose not to do that it is their problem and should wear the increased cost of fixing the defect if it causes issues later (and not just cosmetically fixing it).

Yes, yes and yes

The problem is that many builders try and get away with it, knowing that it is expensive and time consuming for the owner.
If you have a good private inspector to push the right buttons then you will have a good chance of getting your defects attended.
Many builders have tried QA but when the costs come in they revert back to just leaving it to the tradies on site and bank the money instead. So in many cases QA, what QA?

The builder is only intrested in the next stage payment as soneone else posted on here, they dont care about anything and with the RBS gets all the work from them. Sad sad sad that greed over rules all here. Everyone is cashing in builders inspectors then you have lawyers on the other side telling you they will fight for you instead they also cash in by stretching the truth so your case goes for ever.
Go and try understand all of this. Its got me very angry right now.
Will see in a few weeks which way I am going to go if I will post every document I have and all the photos I have taken over the last 8 years of all the corner cutting these builders actually do to deceive consumer's.
Regards
Thank you to everyone who has posted and has given me some great advice and help.
Thank you to all.

[quote="building-expert":v9z8vx77]Most people would assume that if there are defects in your new building that the builder would be obliged to fix the defects. Whilst this is true and the builder is legally obliged to fix defects under builder’s warranty (10 years in Victoria) there may be a very nasty exception for defects that are very costly to fix. This could leave a building owner in a situation where there is only a cosmetic fix or a nominal compensation for a major defect. How is this so?

It has to do with a common law precedent Belgrove vs Eldridge which in the interest of avoiding “economic waste” stipulates that rectification work will only be ordered where it is necessary to achieve conformance and further that it is a reasonable course of action to adopt. In other words, where the cost of rectification is disproportionate to the benefit to be gained the rectification will not be ordered.
A particular example is say where Colorbond flat roof is specified but instead it is built in Zincalume. If there are no issues with town planning it seems that there is very little to be gained by removing air conditioners, lift the roof and replace roof sheets with Colorbond. A monetary compensation to the owner equivalent to the difference in cost between zinc and colour roof may seem appropriate.

Now consider a scenario where you have a competent builder who has in place and maintains a quality assurance system. Errors and mistakes can still occur but the incidence and the severity of the rectification is likely to be lower and we could say that the builder has exercised due skill and care as required by warranties.
I have no problem with such builder having the protection of Bellgrove vs Eldridge doctrine. However there are two scenarios that work in opposite direction.
The first is the fact that quality supervision and the maintenance of a QA system is a costly item and there is a temptation to cut it back beyond the bone relying instead on tradies on site “to do the right thing” even if some have been screwed on price. The money that should be spent on supervision and QA instead is banked as builder’s bonuses.
The second is that typically builders will take on more work than they can comfortably carry out, thereby stretching ever further what scant supervision there is.
The result is that builders bank handsome profits (obcene perhaps) whilst short changing customers on delivery and quality and knowing they can do so with impunity because of our inept and corrupt building control system. Furthermore they know that if they truly blunder they may get escape ticket from Bellgrove vs Eldridge

Australia is supposed to be a first world country but it is building its buildings without mandatory QA systems and delivering third world results as demonstrated by slab heave, multi storey cladding fiasco as well as poorly built, fire risky and leaking apartment buildings.

Having spent last 15 years dealing with building defects and disreputable things done by reputable builders I would suggest that the protection of Bellgrove vs Eldridge against building defects should only be available to the builder if the builder can demonstrate the QA system was applied in full compliance. In all other cases it should be pull down and rebuild. Nothing works as well or as fast as when the builder has to pay for own mistakes.

For the owner, the majority of potential problems can be avoided or dealt with competently by their own independent building stage inspector, performing inspections at critical stages of the build.

It is always better to avoid building problems and defects rather than trying to deal with them afterwards.[/quote:v9z8vx77]

who were your independent inspectors?

You must years before building knowledge yourself up to within a inch of your brain capacity,I did and it worked a treat,poor building practices love new unknowledgeable home owners,you have to hire the right knowledge and right builder but your builder must respect that you have knowledge on your side,when a builder knows that you have someone as qualified as building expert and accepts this,your chances of a good build go through the roof and you should never stop researching and learning througout, bad builders prey on the many new unknowledgeable home owners and have numerous points that can and will give you poor practices.

We had registered building practitioners do inspections