Guide to Navigating Strata Defects & Statutory Warranty Claims in NSW

If you live in a newer strata building in NSW, chances are you’ve heard the word “defects” mentioned at some point. Cracking walls, waterproofing failures, leaking balconies, faulty fire systems — building defects can be stressful, costly and complex.

Understanding your rights — particularly around statutory warranty claims — is critical for protecting your building and your investment.

Here’s what every strata owner and committee member should know.

What is a building defect in strata?

A defect is generally defined as a fault, flaw or failure in building work that does not comply with:

• The building contract

• The National Construction Code

• Australian Standards

• Or acceptable workmanship standards

In strata schemes, defects typically affect common property, such as:

• Roofing and waterproofing

• External cladding

• Structural elements

• Fire safety systems

• Plumbing and drainage

• Balconies and façades

Some defects may appear immediately after completion. Others may take years to surface.

Major vs minor defects – Why it matters

Under NSW legislation, defects are categorised as:

Major Defects

These are serious issues that:

• Affect structural integrity

• Make the building unsafe or uninhabitable

• Prevent use of part of the building

• Result from serious non-compliance with the Building Code

Examples: Structural cracking, major waterproofing failure, serious fire safety defects.

Other (Minor) Defects

These include issues that do not meet the threshold of “major,” such as:

• Poor finishes

• Minor water ingress

• Cosmetic cracking

The distinction is important because it affects the warranty period.

Statutory warranty periods in NSW

Under the Home Building Act 1989 (NSW), builders provide automatic statutory warranties for residential building work:

• 6 years for major defects

• 2 years for all other defects

The warranty period starts from the date of completion.

If a defect becomes apparent in the last 6 months of the warranty period, owners may have an additional 6 months to lodge a claim.

For strata schemes, the owners corporation is responsible for pursuing claims relating to common property.

Who is responsible for making a claim?

In strata buildings:

• The Owners Corporation handles defects affecting common property.

• Individual lot owners handle defects within their own lot (unless caused by common property).

  
  

The strata committee should act quickly once defects are identified. Delays can jeopardise legal rights if warranty periods expire.

What should you do if defects are suspected?

1. Engage a qualified building consultant

An independent expert can:

• Conduct a defect inspection

• Prepare a detailed defect report

• Classify defects as major or minor

• Provide recommendations for rectification

This report becomes critical evidence if legal action is required.

2. Review warranty timeframes

Confirm:

• Date of practical completion

• Whether the defect falls within 2 or 6 years

• Whether you are nearing a limitation period

Time is everything in defect claims.

3. Notify the builder in writing

The Owners Corporation should formally notify the builder/developer:

• Identify defects clearly

• Attach the expert report

• Request rectification within a reasonable timeframe

Keep all correspondence documented.

4. Attempt resolution

In many cases, defects are resolved through negotiation. However, if the builder does not cooperate, the Owners Corporation may need to escalate the matter.

Options may include:

• NSW Fair Trading complaint

• Mediation

• NCAT proceedings

• Legal action

Why early action is critical

Many strata schemes delay acting because:

• The building “still seems fine”

• There are cost concerns around engaging experts

• Committees are unsure of the process

However, once warranty periods expire, recovery options become far more limited and expensive.

Proactive inspections — especially before the 2-year and 6-year marks — are strongly recommended.

Practical tips for strata committees

✔ Keep records of all building issues reported

✔ Schedule defect inspections before warranty expiry

✔ Maintain a defects register

✔ Seek legal advice early if major issues are identified

✔ Ensure your strata manager is experienced in defect management

How Centric Strata supports defect management

At Centric Strata, we work closely with strata committees to:

• Coordinate independent building inspections

• Track warranty deadlines

• Manage communication with builders and developers

• Facilitate legal and expert engagement when required

• Guide owners through the process calmly and strategically

Navigating building defects can feel overwhelming — but with the right advice and timely action, strata schemes can protect their assets and enforce their rights effectively.

Final thoughts

Defects are unfortunately common in modern construction — but ignoring them can be costly.

If your building is approaching key warranty milestones, now is the time to act.

If you would like guidance on defect inspections or understanding your statutory warranty position, contact Centric Strata for tailored advice.