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Sometimes builders include a “defects liability period” in their domestic building contract. This is an agreement about how the builder and owner will deal with a defect arising during a specified period. However, the defects liability period does not replace or limit the builder’s warranties which will still apply where there is no agreed defects liability period and after any defects liability period has expired.

Builders’ warranties are often very strictly applied by courts and VCAT. For example, in the decision of Carlier v Evans Plumbing Pty Ltd & Ors (Domestic Building) [2012] VCAT 1839 (“Carlier”), VCAT held a builder liable for the staining of unsealed wall tiles, even though the builder was unaware that the tiles were unsealed and required pre-sealing. VCAT determined the owner did not contract to have unsealed tiles laid and the builder failed to comply with their warranties because the unsealed wall tiles were not suitable for their intended purpose.

In another case, Stiff v Barton (Domestic Building) [2005] VCAT 821, VCAT considered whether bricks used by the builder in a perimeter wall below the damp course were fit for purpose after it found that there was “fairly severe salt efflorescence and spalling of brickwork”. On appeal to the Supreme Court, Hargrave J held that the warranties of fitness for purpose in this case “required the builders to provide materials, and a completed house, which would be proof against any groundwater conditions