When work is defective, the homeowner has three overlapping sets of rights — the contract, the state statutory warranties, and the ACL consumer guarantees — plus a regulator that can order you to fix it. Here is how a defect complaint actually plays out, and what it means for you as the builder.
The ACL guarantees in play
Residential building engages both goods and services:
- Services: done with due care and skill; fit for any disclosed purpose; achieving a result the owner relied on your skill for.
- Goods (materials and fixtures): "acceptable quality" — safe, durable, free from defects and fit for common purposes (a watertight roof, sound framing, compliant waterproofing, adequate drainage) for a reasonable period.
If the owner told you a specific purpose — soundproofing, disability access, heavy equipment — and relied on your expertise, there is a guarantee the work is reasonably fit for it. Marketing claims ("maintenance-free for 15 years") feed into the standard you are held to.
The owner's remedies — minor vs major
- Minor defect (fixable within a reasonable time): the business usually chooses the remedy — typically you repair it at your own cost within a reasonable time.
- Major defect (substantially unfit, unsafe, or so bad a reasonable owner would not have engaged you): the owner can reject the work, seek a refund or price reduction, and claim compensation for foreseeable loss — alternative accommodation, rectification costs.
- Damages are measured by the reasonable cost of rectification (another builder fixes it) or, where that is disproportionate, the difference in value. Consequential loss — water damage, mould, damaged contents — is recoverable too.
The process — give yourself the chance to fix
Before chasing remedies the owner generally must notify you of the defects and give you a reasonable opportunity to inspect and rectify, following the contract's notice and cure steps (which cannot contract out of the non-excludable ACL rights). So your strongest position is to respond and offer to fix — use the Defect Rectification Letter, and see Statutory Warranties & Defects.
The regulator can order rectification
Each state has its own regulator and pathway — broadly: resolve with the builder → complain to the regulator → tribunal:
- QLD: complain to the QBCC, which inspects and can issue a Direction to Rectify — structural within 6 years 6 months of completion, non-structural within 12 months. The QBCC also runs the Queensland Home Warranty Scheme.
- VIC: the VBA investigates and can issue directions or orders, or refer to VCAT (after DBDRV).
- NSW: Fair Trading / the Building Commission, then NCAT.
Why owners run all three bases at once
The contract, the statutory warranties and the ACL are cumulative, and the ACL cannot be excluded. So a defect claim is usually framed on all three at once — to maximise remedies and avoid gaps (for example a major ACL failure even after the contractual defects-liability period has expired). For you the takeaway is blunt: you cannot charge to fix your own defective work, and a "repair-only / no liability after 90 days" clause will not stand up against the ACL.
Common mistakes
- Refusing to inspect or fix — it hands the owner a damages claim against you.
- Trying to cap liability below the ACL — the clause is void and risks an ACL contravention.
- Ignoring a Direction to Rectify — the regulator can escalate.
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