Building Defects After Settlement: Your Legal Rights as a New Apartment Owner

The short version

• Separate urgent repairs from long-tail legal recovery so the apartment stays liveable while the claim develops.
• Identify the responsible party early: developer, builder, certifier, supplier or owners corporation.
• Keep a dated evidence pack from day one; defects disputes are won on records, not memory.

New owners usually discover defects at the worst possible time: after the excitement of settlement, when every email feels like it should have been sent months earlier.

Cracks can appear within months or weeks of settlement. Water seeps through the bathroom ceiling, the balcony door does not seal or the garage floods whenever it rains. Industry data suggests that nearly four in ten apartment buildings constructed in Australia since 2000 have reported serious structural defects within six years of completion.

Building defects can leave apartment owners with large repair bills. Owners need to identify the responsible parties and act within the relevant time limits.

How common are building defects?

The NSW Building Commissioner's office has repeatedly flagged high defect rates, and similar problems appear in every state.

Defect Type	Frequency in New Buildings	Typical Cost to Rectify (Per Lot)
Waterproofing failures	Most common: affects up to 80% of defective buildings	$5,000–$30,000
Fire safety non-compliance	Very common: fire doors, cladding, penetrations	$10,000–$50,000+
Structural cracking	Common, particularly in concrete slabs and load-bearing walls	$15,000–$100,000
Balcony and façade defects	Increasingly common in buildings from 2005–2018	$8,000–$40,000
Plumbing and drainage issues	Common, and often hidden until failure	$3,000–$15,000
Electrical defects	Less common but serious when found	$2,000–$10,000

Waterproofing

42

Fire safety

24

Structure

18

Other

16

Your legal rights and who may be liable

When defects appear in a new strata building, multiple parties may bear responsibility. Understanding who you can pursue, and under which legislation, is the first step toward recovery.

The developer

The developer is typically the primary target in defect claims. Under state legislation such as the Home Building Act 1989 (NSW), developers owe statutory warranties including that work will be done with due care and skill, that materials will be suitable, and that the building will be fit for habitation. For major defects (those causing inability to inhabit the building or risk of collapse or serious damage), the warranty period is six years from completion. For other defects, the warranty period is typically two years.

The builder

If the builder is a separate entity to the developer, they carry their own obligations under the statutory warranties. The Design and Building Practitioners Act 2020 (NSW) introduced a statutory duty of care owed by any person who carries out construction work. The duty extends to later owners, giving strata owners a direct path to pursue builders.

The certifier

Building certifiers who issued occupation certificates for non-compliant buildings may also be liable. If the certifier should have identified the defect during inspection and failed to do so, they can be joined to proceedings.

Product manufacturers and suppliers

Under Australian Consumer Law, manufacturers and suppliers of defective building products (such as combustible cladding, defective waterproofing membranes, or non-compliant fire doors) can be pursued for products that were not fit for purpose.

The 2025 NSW reforms

The Strata Schemes Legislation Amendment Act 2025 (NSW) introduced several reforms specifically designed to address the building defects crisis:

Reform	What Changed	Impact for Owners
Extended limitation period	Owners now have 6 years (up from 2) to take action against an owners corporation for failure to repair common property	More time to identify and pursue latent defects
Mandatory urgent repairs	Owners corporations must fix safety defects immediately, even during legal proceedings against the party responsible	No more "waiting for the lawsuit" while the roof leaks
NSW Fair Trading enforcement	Fair Trading can now issue compliance notices and enter enforceable undertakings against non-compliant owners corporations	An alternative to expensive litigation for individual owners
Developer accountability	Developers of multi-storey schemes must engage independent surveyors to certify maintenance plans and budgets (from April 2026)	Better early detection of defects in new buildings
Heightened penalties	Developer penalties increased to up to $11,000 plus daily fines for non-compliance	Stronger deterrent against corner-cutting

State-by-state comparison of defect protections

Defect protections vary by state. NSW has introduced recent changes, while other states use different warranty periods and recovery paths.

State	Statutory Warranty (Major Defects)	Statutory Warranty (Minor Defects)	Duty of Care to Subsequent Owners
NSW	6 years	2 years	Yes, via Design and Building Practitioners Act 2020
Victoria	10 years (structural), 6 years (non-structural)	6 years	Limited, primarily through Domestic Building Contracts Act
Queensland	6 years 6 months	6 years 6 months	Limited, via QBCC warranty scheme
WA	6 years	6 years	Limited: Building Services (Complaint Resolution and Administration) Act
SA	5 years	5 years	Limited statutory protections

What to do when you discover defects

If you've found defects in your building, start the record and check the deadlines immediately:

1. 01
   Document defect with dated photos
2. 02
   Independent inspector's report
3. 03
   Written notice to developer and builder
4. 04
   Owners corporation escalates the claim
5. 05
   File before warranty deadline

1. Document everything. Photograph and video every defect. Record dates, weather conditions and the extent of damage. Keep a written log of all correspondence with the developer, builder and strata manager.

2. Engage independent experts. Commission a report from a qualified building inspector who was not recommended by the developer. For significant defects, engage a structural engineer or specialist consultant. These reports form the foundation of any legal claim.

3. Notify the developer and builder in writing. Send a formal notice of defect by registered mail and email. Reference the statutory warranties you believe have been breached. Request rectification within a reasonable timeframe, typically 28–60 days for non-urgent defects.

4. Escalate through your owners corporation. Raise defects at committee and general meetings. Ask the owners corporation to engage solicitors specialising in strata building defect claims. If the committee is reluctant to act, use the new NSW Fair Trading enforcement pathways.

5. Check the time limits. Building defect claims are time-sensitive. The limitation periods start running from the date of practical completion, not the date you discovered the defect. Missing a deadline can permanently extinguish your right to claim.

The cost of delay

Buildings that delay defect rectification face compounding problems. Water ingress left unaddressed for 12 months can cause structural damage that triples the original repair cost. Insurance premiums rise sharply for buildings with unresolved defects, sometimes doubling or tripling. Property values in defective buildings typically drop 15–25% compared to equivalent buildings without known issues.

This year

$18k

Year three

$67k

How UnitBuddy supports the work

UnitBuddy's building wellness assessment includes defect risk in the building's health score. It compares maintenance spending, insurance costs and capital works fund adequacy with similar buildings, showing where defect rectification may be underfunded.

Sources and further reading

• NSW Government: changes to strata laws
• NSW Government: guide to strata law changes for committees and owners
• NSW: Navigating the DBPA 2020 and the building defects claims process, via LookUpStrata
• NSW: First steps for reporting apartment building defects, via LookUpStrata

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