In short
In New South Wales the statutory warranties run six years for a major defect and two years otherwise, from completion. In the ACT the same periods apply but turn on whether the element is structural. New South Wales also has a statutory duty of care owed to each owner and every subsequent owner, which is not confined to residential work. Both jurisdictions stop all claims at ten years from completion.
- The NSW two-year period expires quietly, while an owner is still negotiating rectification with the builder.
- External weatherproofing is a structural element in the ACT by definition, so it is on the six-year clock there.
- The NSW duty of care cannot be delegated and cannot be contracted out of.
- In the ACT each defendant pays only its proportionate share, so an insolvent co-defendant is the plaintiff's problem.
There is more than one route, and they run on different clocks
The first mistake in a defect claim is assuming there is one cause of action and one time limit. In New South Wales there are at least three routes to a remedy against the people who built a defective building, and each has its own requirements, its own defendants and its own deadline. In the ACT the structure is similar but the questions are not the same, and an answer carried across from one jurisdiction to the other is often wrong.
| Route | Where it comes from | Reaches |
|---|---|---|
| Statutory warranties, NSW | Home Building Act 1989 (NSW) s 18B | Residential building work only |
| Statutory warranties, ACT | Building Act 2004 (ACT) s 88 | Residential building work only |
| Statutory duty of care, NSW | Design and Building Practitioners Act 2020 (NSW) Pt 4 | All construction work, not only residential |
The third of those is the one that changed the landscape, and it is dealt with below at some length because it is both the widest route and the least understood.
The statutory warranties in New South Wales
Section 18B of the Home Building Act 1989 (NSW) implies six warranties into every contract to do residential building work. They are implied by force of the section, so they do not depend on the contract saying anything, and they bind the holder of a contractor licence or a person who was required to hold one.
The six warranties in section 18B(1)
- The work will be done with due care and skill, and in accordance with the plans and specifications set out in the contract.
- All materials supplied will be good and suitable for the purpose for which they are used, and, unless the contract says otherwise, new.
- The work will be done in accordance with, and will comply with, this or any other law.
- The work will be done with due diligence and within the time stipulated, or if none is stipulated, within a reasonable time.
- Where the work is the construction of a dwelling, or alterations, additions, repair, renovation, decoration or protective treatment of one, it will result in a dwelling that is reasonably fit for occupation, to the extent of the work done.
- The work and materials will be reasonably fit for a specified purpose or result, where the owner made that purpose or result known so as to show reliance on the builder's skill and judgment.
Section 18B(2) is the part that surprises people. The warranties are not limited to a contract with the owner of the land. They are also implied in the contract between a principal contractor who has contracted to do residential building work and a subcontractor engaged to do that work or part of it. The warranties run down the chain, which is why a head contractor facing a defect claim has a route against the trade that did the work.
The New South Wales clock: six years and two years, from completion
Section 18E is short and it decides most claims. Proceedings for breach of a statutory warranty must be commenced before the end of the warranty period, and the warranty period is:
- six years for a breach that results in a major defect in residential building work; and
- two years in any other case.
Both run from completion of the work to which the warranty relates. Where the work was not completed, section 18E(1)(d) fixes the start as the date the contract was terminated, or if it was not terminated, the date work ceased, or if work never started, the date of the contract.
There is one extension and it is easy to miss. Under section 18E(1)(e), where the breach becomes apparent within the last six months of the warranty period, proceedings may be commenced within a further six months after the period ends. A breach becomes apparent when a person entitled to the benefit of the warranty first becomes aware, or ought reasonably to have become aware, of it.
Section 18E(1A) provides a separate extension for strata work. Where a building bond has been lodged under Part 11 of the Strata Schemes Management Act 2015 (NSW), the two-year period is extended until 90 days after the end of the period for the final inspection report on the work.
What this means for you
The two-year period is the one that expires quietly. Most non-structural defects, being water ingress at a junction, a failing finish, an appliance or a service that does not perform, sit in the two-year bucket, and two years from completion arrives while an owner is still deciding whether the builder will come back and fix it voluntarily. If a defect is being discussed with a builder and the second anniversary of completion is approaching, that is the point to get advice, not after the conversation fails.
The ACT splits the same period on a different question
The ACT also has six years and two years, and it divides them on a different test, so the same defect can fall in a different bucket on either side of the border.
Section 88 of the Building Act 2004 (ACT) implies warranties by force of the section into every contract for the sale of a residential building and every contract to carry out residential building work to which the builder is a party: that the work has been or will be carried out in accordance with the Act; in a proper and skilful way and in accordance with the approved plans; using good and proper materials; with reasonable promptness where no completion date is stated; and fit for a purpose or result made known so as to show reliance.
Two features of the ACT provision are worth noting. Section 88(3) provides that each of the owner's successors in title succeeds to the rights, so a purchaser inherits the warranty. And section 88(2A), inserted with the Property Developers Act 2024 (ACT), adds a warranty by the property developer where the developer arranged the work, additional to and not limiting the builder's warranty. That gives an owner a second solvent defendant in the case where it matters most, which is where the builder has gone.
Section 88(4) says the warranties end at the end of the period prescribed by regulation. The Act does not state the period. Section 38 of the Building (General) Regulation 2008 (ACT) does:
| New South Wales | Australian Capital Territory | |
|---|---|---|
| Six years applies to | A breach resulting in a major defect | Work on a structural element |
| Two years applies to | Any other case | Work on a non-structural element |
| Runs from | Completion of the work | The completion day for the work |
| Source | Home Building Act 1989 s 18E | Building (General) Regulation 2008 s 38 |
The ACT regulation defines a structural element as a load-bearing component of the building, internal or external, that is essential to the stability of the building or part of it, or a component including weatherproofing forming part of the external walls or roof. A non-structural element is anything else.
That definition does real work. A failure of external weatherproofing is a structural element in the ACT by definition, and therefore on the six-year clock, whatever view anyone takes of how serious it is. In New South Wales the same failure has to be argued as a major defect to get the six years.
The New South Wales statutory duty of care, and why it is the wider route
Part 4 of the Design and Building Practitioners Act 2020 (NSW) created a duty that is not confined to residential work and does not depend on any contract. Section 37(1) provides that a person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects in or related to the building for which the work is done and arising from the construction work.
Four features make it the route to consider first in New South Wales.
What section 37 and the sections around it actually do
- It is owed to every owner, including future ones. Section 37(2): the duty is owed to each owner of the land and to each subsequent owner. A purchaser who bought years after the work was done is owed the duty directly.
- It does not need a contract. Section 37(4): the duty is owed whether or not the work was carried out under a contract with the owner or with anyone else.
- It reaches beyond the builder. Section 36 defines construction work to include building work, preparing designs, the manufacture or supply of a building product used for the work, and supervising, coordinating, project managing or otherwise having substantive control over any of it.
- It is not limited to residential work. Section 36 says building work includes residential building work under the Home Building Act, which means Part 4 is not confined to it.
Two further provisions close the obvious escapes. Section 39 provides that the duty cannot be delegated. Section 40 provides that Part 4 applies despite any contract to the contrary made after its commencement, and that no contract can annul, vary or exclude a provision of it: there is no contracting out.
Section 41 confirms the relationship with everything else. Part 4 is in addition to the duties, statutory warranties and other obligations under the Home Building Act, other Acts and the common law, and does not limit them. It is a route alongside the warranties, not a replacement for them.
For owners corporations there is a specific provision. Section 38 provides that an owners corporation is taken to suffer economic loss where it bears the cost of rectifying defects, including damage caused by defects, and that the loss includes the reasonable costs of providing alternative accommodation where necessary. It applies whether or not the owners corporation owned the land when the work was done.
Ten years, and then nothing
Both jurisdictions stop everything at ten years, and the longstop does not care when the defect was discovered.
In New South Wales, section 6.20 of the Environmental Planning and Assessment Act 1979 provides that a civil action for loss or damage arising out of or in connection with defective building work or defective subdivision work cannot be brought more than ten years after the date of completion. Completion is the date an occupation certificate is issued authorising occupation, or where no certificate is required, a compliance certificate; failing that, the date of a required final inspection by a certifier; failing that, the date the building was first occupied or used.
In the ACT, section 142 of the Building Act 2004 provides that a building action may not be brought more than ten years after the day a certifier gave the certificate of completion; or where there is none, the day of the last inspection in the course or on completion of the work; or where there is neither, the day the building was first occupied or used. Section 142(3) preserves any shorter limitation period under another territory law, so the ten years is a ceiling and not an entitlement.
The practical point is that the ten-year longstop and the warranty periods are different things doing different jobs. The warranty period can expire long before the longstop, and expiry of the warranty period ends that route whether or not ten years have passed.
In the ACT, each defendant pays only its share
Section 141 of the Building Act 2004 (ACT) applies proportionate liability to a building action. A defendant found liable is liable only for the amount of damages the court considers just having regard to the extent of that defendant's responsibility for the loss, and that liability is limited to the amount for which judgment is given against it even if another Act or rule of law provides otherwise. A defendant held liable for a proportionate part does not contribute to the damages apportioned to anyone else, and does not indemnify them.
The consequence for a plaintiff is that suing the most solvent defendant and leaving it to sort out contribution does not work. If responsibility is shared between a builder, a certifier and a designer, and two of them are gone, the one that remains pays its share and no more. So the identification of every potentially responsible party, and their solvency, is part of the assessment at the start of the matter rather than a detail for later.
What to do when a defect appears
The sequence matters more than the speed.
- Fix the date of completion. Every clock in this article runs from it, and it is a documented date: the occupation certificate, the certificate of completion, the final inspection, or first occupation. Find it before doing anything else, because it tells you how much time you have and therefore how much deliberation you can afford.
- Get the defect inspected and recorded. By someone whose report could be used later. Photographs with dates, and an opinion on cause rather than only on appearance, since the cause is what determines who is responsible.
- Identify everyone who might be liable, not just the builder. In New South Wales the duty of care reaches designers, product suppliers, project managers and anyone with substantive control. In the ACT proportionate liability makes this decisive rather than merely useful.
- Consider rectification by the original builder. It is frequently the cheapest outcome for an owner, and under a contract's own defects regime it may be a step that has to be offered.
- Then choose the forum. Tribunal, court, or the contract's own dispute procedure. They differ on cost, speed and whether legal costs are recoverable, and the choice should follow the value of the claim rather than the seriousness of the defect.
Where this article stops
Not covered, and not to be assumed
- Whether a particular defect is a "major defect" for section 18E. That turns on the statutory definition applied to the facts and on the authorities interpreting it, neither of which is set out here.
- The case law on section 37 of the Design and Building Practitioners Act, including its operation in respect of work carried out before it commenced. The provisions were read; the authorities were not.
- Insurance. Home building compensation cover, the builder's own policies and what a warranty claim does to them are a separate exercise and frequently determine what a claim is actually worth.
- Security of payment. A defect claim and a payment dispute often arrive together and run on completely different timetables. That half is dealt with on our building and construction law page.
- Anything outside New South Wales and the ACT. Every state has its own statutory warranty regime and its own periods, and none of the figures here should be carried across a border.
The position stated is as at 27 August 2026, read on that date from the official registers.
