Question: Our small Class A complex has many defects. We have claimed the builders warranty insurance. Is the owners corporation responsible for the remaining defects?
I own a townhouse in a small Class A complex of seven that is almost four years old. We had a high number of defects, including significant structural defects. We have claimed the builders warranty insurance, and structural defects still need to be remediated.
Is the owners corporation responsible for the costs of these structural defects, or are individual owners responsible for the costs associated with their own townhouse? Is the owners corporation responsible for maintaining the common property after the defects have been remediated to an acceptable standard?
Answer: I strongly recommend all owners work together to resolve the structural defects
Building defects can be extremely difficult to resolve.
As you have noted, the builders warranty insurance (BWI) has been fully claimed, so one would assume that the owners corporation has engaged the services of legal counsel to advise and assist on the claiming of the BWI.
Unfortunately, there can be instances of the BWI not being enough to cover the repair of the defects. Further to this, the BWI can only be claimed if the builder is dead, missing or insolvent. Therefore you would not be able to take legal action against the builder for the remainder of the costs.
As it is an A class complex, the owners corporation would be responsible for the repair of any of the structural defects. Unfortunately you have not advised what the remaining structural defects are, so I am not able to give any specific answers.
That being said, as the complex is seven units, I strongly recommend all owners work together to resolve the structural defects.
If there is a defect internal to a unit that only affects that unit (i.e. leaking sink in the kitchen or bathrooms, shower waterproofing, missing kickboards, missing cornices, and similar), the repair would be the responsibility of the individual owner.
This post appears in Strata News #722.
Steve Wiebe
Bridge Strata
E: steve@bridgestrata.com.au
P: 02 6109 7700
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