New Build Defects When Buying Off The Plan, A New Home Or Near New Home

With any newly constructed residential property, there is the possibility that there will be new build defects which you discover. The extent of defects and the builder’s willingness to resolve issues will vary from builder to builder.

If you are looking to purchase a new or near new home, and have the builder’s details, we recommend you:

1. Undertake a QBCC licence search – this search will reveal if the builder is a licensed contractor, information about the type of work they do and their history (including any disciplinary action)
2. You can see if the home is covered by the Queensland Home Warranty Insurance Scheme which lasts for 6 years and 6 months from when the premium is paid, though can be extended if the construction was over 6 months; and
3. Do your homework – research reviews and testimonials.
4. If you do proceed to purchase a property and later discover defective building works, the Queensland Building and Construction Commission (QBCC) may be able to assist through:
   • their dispute resolution process; and/or
   • assistance under the Queensland Home Warranty Insurance Scheme.

What is the QBCC Dispute Resolution Process?

Following the lodgement of a complaint, a QBCC Officer will contact you and the principal contractor to discuss the matter. A site inspection may be also be carried out by a building inspector or technical consultant.

QBCC may issue a Direction to Rectify to the contractor, and any relevant subcontractor, to rectify defective building work. Where a contractor fails to comply, QBCC may commence disciplinary action in the QCAT or Magistrates Court, or for residential construction work (covered by a Certificate of Insurance) the work may be rectified as a claim under the insurance policy.

To utilise QBCC’s dispute resolution process, you must lodge a complaint as soon as possible, but no later than 12 months of noticing the defect. QBCC may be able to help with structural defects that are apparent within 6 years and 6 months from practical completion.

What is the Queensland Home Warranty Insurance Scheme? 

Most residential building work done in Queensland valued over $3,300.00 (including labour and materials) must have home warranty insurance. As part of the building process, the builder pays a premium to QBCC to insure the construction. This amount is included as part of the contract and is paid before the work begins.

The Home warranty insurance provides cover in situations where the contractor fails to complete the work, the work is defective, or subsidence occurs.

The work is covered for a period of 6 years and 6 months from the date (whichever is the earlier) of:

• the premium is paid
• a contract is entered; or
• work is commenced.

Claims must be made within the following time frames:

• for structural defects, a claim must be lodged within 3 months of noticing the defect; and
• for non-structural defects, a claim must be lodged within 7 months of the completion date.

It is important to note that the cover of the Queensland Home Warranty Insurance Scheme is subject to strict limitations and exclusions.

Who can make a complaint/seek the insurance coverage?

If the work was carried out for you or done before you purchased the property you can seek QBCC’s dispute resolution assistance (timeframes permitting).

Subsequent purchasers are not however entitled to the insurance protection where the damage, destruction, defect or subsidence or settlement, was, in the opinion of the QBCC, evident prior to completing the contract to purchase the land.

Interested to Learn More?

If you would like to learn more about new build defects when buying off plan, a new home or a near new home, speak to a local conveyancer from MAP Lawyers today by calling 1300 680 584 or by filling in the online form.

Updated: 28/12/2021