Understanding Implied Warranties

Builders and tradespeople must honour the implied warranties in the Domestic Building Contracts Act 1995 & also the Competition and Consumer Act 2010, which require that they:

·         carry out the work in a proper and workmanlike manner, in accordance with the plans and specifications set out in the contract

·         ensure all materials supplied are good and suitable for the purpose and are new, unless otherwise stated in the contract

·         carry out the work in accordance with all laws and legal requirements

·         carry out the work with reasonable care and skill and complete works by the date (or within the period) specified by the contract

·         ensure new homes, extensions, renovations, repairs and kit homes (or similar) are suitable for occupation when completed

·         ensure other types of work and the material used are reasonably fit for the intended purpose.

Implied warranties automatically apply to all domestic building work, regardless of the cost or whether or not there is a written contract.

If purchasing a property, these warranties transfer to a new owner for up to 10 years from completion of the work, so it’s advantageous to enquire about who the builder or tradesman was that carried out building works.

The main problems that arise with building defects pertains to works have not been carried out in a proper or workmanlike manner with reasonable care and skill. Many tradespeople or contractors have no idea that they are subject to implied warranties explained in this blog.

Understanding the implied warranties can assist with credible evidence linked to building defects that arise during the construction of a dwelling, at the final PCI defects inspection of a new dwelling, or when purchasing a brand new or recently renovated property.