Building Defects in New Apartments — Your Rights in Australia (2026)
Building defects are common in new Australian apartments. Research by the Grattan Institute and state building commissions has found that a significant proportion of new strata buildings have defects — ranging from minor cosmetic issues to serious structural problems. Knowing your rights protects you.
Common Defects in New Apartments
| Defect type | Examples |
|---|---|
| Waterproofing failures | Leaking balconies, bathrooms, roofs, underground car parks |
| Structural defects | Cracking, deflection, substandard concrete |
| Fire safety non-compliance | Incorrect fire door installation, inadequate passive fire protection |
| Cladding non-compliance | Combustible cladding installed in breach of building code |
| Mechanical systems | Lift failures, HVAC problems, ventilation defects |
| Plumbing | Leaking pipes, incorrect pressure, drainage issues |
| Electrical | Incorrect installation, switchboard non-compliance |
| Facade and envelope | Window seal failures, inadequate weatherproofing |
Statutory Warranty Rights — State by State
Each state imposes mandatory statutory warranties on residential building work:
| State | Key legislation | Structural defects warranty | Non-structural defects |
|---|---|---|---|
| NSW | Home Building Act 1989 | 6 years from completion | 2 years from completion |
| VIC | Domestic Building Contracts Act 1995 | 10 years from completion | 2 years from completion |
| QLD | Queensland Building and Construction Commission Act 1991 | 6 years, 6 months from completion | 1 year from completion |
| SA | Building Work Contractors Act 1995 | 5 years from completion | 1 year from completion |
| WA | Home Building Contracts Act 1991 | 6 years from completion | 1 year from completion |
Periods and conditions vary — check current state legislation for exact terms.
Who Is Responsible — Developer, Builder, or Owners Corporation?
In a strata development:
Builder: Primarily liable for defective building work under statutory warranties and contract.
Developer: May also have liability, particularly where the developer and builder are related entities, or where the developer made representations about quality.
Owners corporation: Manages the claim process on behalf of all lot owners for common property defects. Individual owners manage claims for defects within their individual lots.
For common property defects (the most significant issues): The owners corporation must pursue the builder on behalf of all owners. This requires a vote of the owners corporation and the engagement of building consultants and lawyers.
How to Make a Defect Claim
Step 1: Document defects thoroughly
- Photograph every defect with dates and descriptions
- Get a building consultant or expert to prepare a defect report (essential for formal claims)
- Keep records of all communications with the builder
Step 2: Issue a formal defect notice Written notice to the builder (and developer if applicable) identifying each defect, supported by the consultant report.
Step 3: Allow the builder to rectify Builders have the right to rectify defects — if given the opportunity. Refusing rectification without valid reason may weaken your claim.
Step 4: Escalate if not rectified If the builder refuses to rectify or the rectification is inadequate:
- NSW: NSW Fair Trading complaint or NCAT (NSW Civil and Administrative Tribunal)
- VIC: Domestic Building Dispute Resolution Victoria (DBDRV) then VCAT
- QLD: Queensland Building and Construction Commission (QBCC) complaint
- SA: Consumer and Business Services
- WA: Building Services Board or State Administrative Tribunal
Building Defect Bond (NSW)
In NSW, a statutory building defect bond was introduced for buildings over $20 million in construction value. Developers must lodge 2% of the contract value as a bond, which can be accessed by the owners corporation if defects are found at the inspection held 15–18 months after completion. This provides a practical fund for early defect claims without requiring litigation.
Home Indemnity Insurance (Builder’s Warranty Insurance)
For residential buildings up to 3 storeys:
- Builders are required to hold Home Warranty Insurance (also called Home Indemnity Insurance or Home Owners Warranty depending on the state)
- Insurance covers defects if the builder becomes insolvent, dies, or disappears
- In most states this insurance does NOT cover high-rise apartments (above 3 storeys or $500,000 in VIC), leaving owners only with direct claims against the builder
Frequently Asked Questions
I bought a new apartment and found defects. The developer says “that’s normal.” What can I do?
Document the defects independently with a building consultant and compare to the building code and contract specifications. “Normal” is not the standard — the building must comply with the Building Code of Australia, the NCC, and the contractual specifications. Engage a building lawyer if the developer or builder is not cooperating.
The building has structural defects and the builder has gone into liquidation. Are we protected?
This is the worst-case scenario. For low-rise buildings, Home Indemnity Insurance provides coverage. For high-rise, owners may need to fund rectification through special levies and seek compensation through the developer’s assets or legal action. NSW has introduced the NSW Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 to help address this.
Can I refuse to settle on my new apartment because of defects?
If defects are identified before settlement, you may have grounds to delay settlement pending rectification, or negotiate a price reduction or retention of funds. This requires legal advice quickly — settlement obligations are strict and breach has significant penalties.
Related Strata Guides
- Cladding and Fire Safety — What Apartment Buyers Must Know
- Special Levies — What Happens When Strata Raises a Special Levy
- Body Corporate Disputes — What Are Your Rights?
- Buying Off the Plan — Risks and Rewards
- Strata Title Australia Hub
This article provides general information about building defects in Australian apartments. Warranty rights and claim processes vary by state and building type. If you have defects in your apartment, engage a building consultant and speak with a strata lawyer. Find one through MoneySmart.