Revised construction laws to provide better protection for Canberra high-rise apartment buyers

While Canberra’s residential buildings have grown beyond three storeys, construction laws have been slow to catch up.

Most high-rise apartment buyers are unaware that they currently have different legal rights to those who purchase in smaller developments, according to Meyer Vandenberg Lawyers partner Alisa Taylor.

Statutory warranties have previously been restricted to residential buildings of three storeys or less, but new ACT construction laws will provide all apartment owners with better legal protection against structural defects.

Ms Taylor said the changes will bring the ACT in line with other jurisdictions.

“The main problem with the current law is that it leaves the rights of consumers who buy apartments in high-rise buildings completely uncertain,” Ms Taylor said.

“Our legislation is slightly different to other states and territories in that we have a three-storey cap on our statutory warranties. Any building that is more than three storeys high doesn’t have coverage, even if it’s an entirely residential building.”

Ms Taylor said it was probably not anticipated that Canberra would house high-rise developments when the outdated laws were created 

Ms Taylor said high-rise development owners had previously thought they had the rights to sue builders for negligence, but owners corporations’ attempts to do so have recently been unsuccessful in the High Court of Australia and the ACT Supreme Court.

Most of the defects have involved waterproofing and issues arising from water damage.

The expansion of statutory warranties will abolish the three-storey cap and provide high-rise apartment owners with the warranties offered to those in low-rise residential buildings.

These warranties are two years for non-structural defects and six years for structural defects.

This means that all purchasers of new residential apartments will be able to sue builders for rectification costs when units are not built in accordance with the Building Code of Australia or development approval plans.

Meyer Vandenberg Lawyers associate John Nikolic said warranty extension is part of a wider building quality framework introduced under the ACT’s Building and Construction Legislation Amendment Act (2016).

Other changes allow for further stages of building works, such as waterproofing, to be certified.

Mr Nikolic said many of the changes have delayed implementation, but will come into effect before August 2017, with the expanded statutory warranties expected to commence before then.

The changes are not retrospective, so buyers who purchase before that date will not be protected by the expanded warranty.

Ms Taylor said litigation could still be difficult and time consuming, but the new laws will give consumers and builders a better understanding of their legal rights and obligations.

“It will mean that you probably end up with better outcomes in terms of settlement negotiations and in getting the builder back to rectify the problems,” Ms Taylor said.

“I don’t know that we will see a lot more litigation because the warranties are expanded as our court systems are still slow, but I think we’ll see a lot more co-operation from builders at an early stage because the legal rights are now clearer.”