Builder Warranties: What Home Builders Need to Know
As a home builder, it’s vital to understand the statutory warranties you are obligated to provide. These warranties ensure that construction meets required standards and provide peace of mind to homeowners. Find the details of warranty periods and commencement dates for your state or territory.
Overview of Builder Warranties
Builder warranties are divided into:
Structural Warranties: Cover critical components like foundations, walls, and roofing.
Non-Structural Warranties: Cover finishes, fixtures, electrical work, plumbing, and minor workmanship.
When Do Warranties Start?
The commencement date of warranties typically begins from practical completion—the point at which the home is ready for occupation. In some cases, the commencement can be linked to the date an insurance certificate is issued or the issuance of an occupancy permit. Below, we detail the warranty periods and commencement details for each state.
State-by-State Breakdown
1. New South Wales (NSW)
Structural: 6 years from practical completion.
Non-Structural: 2 years from practical completion.
Commencement Date: Practical completion is the key date.
Insurance: Required for projects over $20,000, protecting homeowners if the builder cannot complete or rectify work.
2. Victoria
Structural: 10 years from the date of occupancy permit or final inspection certificate.
Non-Structural: 2 years from the same date.
Commencement Date: The warranty begins when the occupancy permit is issued.
Insurance: Required for projects exceeding $16,000.
3. Queensland
Structural: 6 years and 6 months from practical completion.
Non-Structural: 12 months from practical completion.
Commencement Date: Warranties commence from practical completion.
Insurance: Required for projects over $3,300.
4. Western Australia
Structural: 6 years from practical completion.
Non-Structural: 2 years from practical completion.
Commencement Date: Warranties start from practical completion.
Insurance: Required for projects over $20,000.
5. South Australia
Structural: 5 years from practical completion.
Non-Structural: 2 years from practical completion.
Commencement Date: The warranty begins at practical completion.
Insurance: Required for projects over $12,000.
6. Tasmania
Structural: 6 years from practical completion.
Non-Structural: 2 years from practical completion.
Commencement Date: Practical completion is the start date.
Insurance: Required for projects over $20,000.
7. Australian Capital Territory (ACT)
Structural: 6 years from practical completion.
Non-Structural: 2 years from practical completion.
Commencement Date: Practical completion marks the beginning of warranties.
Insurance: Required for projects exceeding $12,000.
8. Northern Territory
Structural: 6 years from practical completion.
Non-Structural: 12 months from practical completion.
Commencement Date: Practical completion starts the warranty.
Key Considerations for Builders
1. Maintain Comprehensive Records: Keep clear documentation of practical completion dates, insurance certificates, and occupancy permits.
2. Adhere to State Regulations: Know your state’s rules and communicate them accurately to clients.
3. Educate Homeowners: Clarify when the warranty begins and what it covers to avoid misunderstandings.
Conclusion
For home builders, understanding the commencement and duration of statutory warranties across Australian states is essential. These warranties generally start from practical completion but may also hinge on the issuance of an occupancy permit or insurance certificate, depending on the state. By clearly grasping these rules, you can ensure compliance, build trust, and protect both your business and clients.
