GOOD GOVERNANCE
‘Building Defect Assessment Review’ a statutory obligation As of March 1, 2021, most bodies corporate (except for 2-Lot Schemes) must put a motion forward for conducting a Building Defect Assessment Review. This ‘defect assessment motion’ must be put forward at the next general meeting of the scheme once the first Annual General Meeting is called. This requirement is legislated within the Body Corporate and Community Management Act (BCCMA) and is mandatory. The defect assessment motion must put forward a fee proposal from an appropriately qualified building defect inspector to conduct a site inspection and prepare a defect report to the Queensland Building & Construction Commission (QBCC) standard, including defects defined under the QBCC legislation and formatted to the QBCC requirements.
Why is this now legislated? The defect assessment motion mandate has been introduced to assist bodies corporate in managing their rights under the statutory builders warranty for defects on common property. The QBCC provides consumer
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Lynda Kypriadakis,
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Diverse FMX
protections (which aren’t always capitalised on) and bodies corporate sometimes find themselves voiding warranties and missing out on getting the builder back to fix. With this defect assessment motion mandate now in place, bodies corporate are becoming more aware of their rights and how to claim under the builder’s warranty.
What defects are covered? Any defect defined under the QBCC legislation in Queensland is covered by the defect assessment motion, which is why it is fundamental that an appropriately qualified and experienced building defect inspector is engaged to do the assessment review and prepare the defect assessment report. In Queensland there are two predominant defect types covered under the builder’s warranty:
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Structural Defects: Previously called ‘Category 1’ defects, these are major defects that have the potential to adversely affect the structural integrity of the building and include any water leaks, significant structural cracks, safety issues, any defect in an essential service or fire safety installation, etc. Non-Structural Defects: Previously called ‘Category 2’ defects, these are minor defects that are generally aesthetic in nature and don’t have the potential to cause any structural damage, including paint defects, carpet defects, fouling cupboards, flooring or tiling defects, etc.
What is the defect liability period? For structural defects there is a six years and six months defect liability period in Queensland, starting from the date of practical completion of construction. For non-structural defects there is a 12-month defect liability period in Queensland. Note: For full site-specific details and particulars on your defect liability period and other important facts relating to claiming defects under the warranty for your complex, legal advice is highly recommended. Once a defect is discovered the body corporate has three months to report the defect to the builder, demand rectification and if not repaired, lodge a complaint with the QBCC. It is important that bodies corporate act promptly, so as to capitalise on the warranty. Failure to act on defects promptly may result in the warranty being voided and the builder getting ‘off the hook’ for repairs. You may need legal advice to clarify these particulars.
How does the QBCC help? Consumers of building industry products in Queensland have
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MANAGEMENT
the QBCC to turn to when a building defect is discovered, and the builder has not fixed it. The dispute resolution services of the QBCC are comprehensive (and complicated) so it is important that you follow all the requirements in order to get success with a defective building work claim. Once your complaint is lodged and accepted by the QBCC (i.e., you satisfy all the lodgement criteria), the QBCC will assign a case manager who will contact the builder and request that they return to rectify the defects reported on the complaint. The builder will provide an explanation of their view of the defects (e.g., they may dispute that defects exist, or they may say they were prevented from gaining access to site to fix, etc.) and the QBCC will listen to both sides of the story. If the QBCC is satisfied that defects exist, they will schedule in a site inspection and invite representatives from the builder and the body corporate to attend. The QBCC will assess each defect before preparing a ‘Decision Notice’, which may include a ‘Direction to Rectify’ being issued upon the builder for the defects. The builder will then have a set period of time to fix the defects before the DTR expires. Penalties may apply via the QBCC if the builder fails to rectify defects once directed. This QBCC complaints management process currently takes 14-16 weeks, so it is important that complaints about defective building work are lodged in plenty of time. For example, if your building is over six years old, you may not have time left on your warranty period for the QBCC to process a claim. Similarly for nonstructural defects you must lodge a complaint for these defects within seven months of ‘Practical Completion’ or the QBCC will not have time to process the complaint and issue the ‘Direction to Rectify’ before the expiration of the defect liability period. ResortNews | June 2022
