In most Australian states there is a dedicated Act of Parliament that regulates all domestic building contracts. In New South Wales the Act is the Home Building Act 1989 (NSW). Further, these Acts generally refer the resolution of any building disputes to the relevant tribunal in that state. In New South Wales, most disputes with builders are resolved through the Department of Fair Trading or are determined in the NSW Civil and Administrative Tribunal otherwise known as NCAT.
Home Building is any residential building work that involves work done by a building contractor or a tradesperson. This includes, but is not limited to, the construction of a new home, extensions or renovations.
Arbitration
In some Australian states, arbitration is a method that is used in order to resolve domestic building disputes. The main issue with dispute resolution method is the relatively large expenses that are incurred when involving arbitrators. Arbitration involves employing the services of an independent decision-maker who is required to hear the arguments of both parties. The arbitrator will then make a decision that will be binding.
Section 7C of the New South Wales Act provides that any domestic building contracts in NSW cannot refer disputes, arising under the contract, to arbitration. This was adopted in order to ensure that all consumers have the option of seeking a remedy in relation to domestic building disputes, as many consumers were unable to afford the arbitrator’s fees and any other fees that may have been associated with the arbitration.
NSW Civil & Administrative Tribunal
NCAT can hear and determine application in relation to residential building work up to the value of $500,000. Generally, the Tribunal is to have regard to the principle that rectification of defective work by the responsible party is the outcome. This may not always be the case though. NCAT will require that you have contacted the Department of Fair Trading prior to making an application in the Tribunal.
Note that there are strict time frames in pursuing matters regarding home building works. The following time frames apply:
- Applications about goods or services must be lodged within 3 years;
- Applications must be lodged within 6 years for major defects or 2 years otherwise;
- For contracts entered into prior to 1 February 2012, applications must be lodged within 7 years for non-major defects; and
If you claim is going through NCAT, you can request to be legally represented. Note that if NCAT determines that you can be represented, it is likely that the other party will also be allowed to be represented. In the ordinary course in disputes for defect claims, representation is allowed.
Prior to making an application to NCAT regarding a home building dispute, it is strongly advised that you seek legal advice.
Note that for matters over $500,000 you may proceed through the District Court or the Supreme Court, depending on the amount of the dispute.