Statutory Warranties under the Building Work Contractors Act 1995 (SA)

Section 32 of the Building Work Contractors Act 1995 (SA) (‘the Act’) sets out certain implied warranties that exist in every “domestic building contract” (as defined in the Act) entered into on or after 22 January 1987. Both builders and building owners alike should be aware of these warranties, how they may affect them, and when to seek legal advice.

Warranties

The Statutory Warranties under section 32 are implied warranties, meaning that they will apply even if they do not appear expressly in writing in the building contract itself. Section 32(2) includes warranties that:

  • the building work will be performed in a “proper manner”;
  • all materials supplied by the contractor will be “good and proper”;
  • the building work will be performed in accordance with statutory requirements (e.g. the building will comply with the council approved plans);
  • the work will be performed with “reasonable diligence” (if the contract does not specify a time period for completion);
  • in the case of a house, it will be “reasonably fit for human habitation”; and
  • if a particular purpose for the dwelling is made known, the work and materials will be reasonably fit for that purpose, or might be reasonably expected to achieve that result.

See generally Richards & Anor v Dimitriou & Ors [2016] SADC 111.

However, there is only a period of 5 years after completion of the building works in which to commence proceedings for a claim under warranty, and this limitation period cannot be extended.

Succession of Rights

Importantly, under section 32(3), a person who has purchased or otherwise acquired a house “succeeds” to (i.e. has the benefit of) the rights of the person’s predecessor in title in respect of statutory warranties.

Essentially, this means that if a person purchases a house, they can make a claim under the section 32 warranties, even though they were not the original purchaser.

Defence to Warranty Claim

If a defendant (i.e. the builder) is able to prove that the deficiencies arose from instructions insisted on by the building owner against the written advice of the defendant, this may be a defence to a breach of a statutory warranty under section 32(7).

For example, say a building owner requests a certain material be used in the building works, and the builder gives written advice that that material should not be used, as it would be unsuitable for the intended purpose. If after that, the building owner insists that the material be used, and it later proves to be defective, the builder will have a defence to a claim under the section 32 warranties by the building owner regarding that defective material.

If you are a building owner with concerns about defective work, or a builder facing complaints of defective work, our experienced team at Clelands Lawyers will be happy to assist you.

Shannon McMenamin

26 July 2017