Date of completion for residential building work
In the recent decision of Ashton v Stevenson  NSWCATAP, the NSW Civil and Administrative Tribunal Appeal Panel (Appeal Panel) considered the application of section 3B of the Home Building Act 1989 (NSW) (the Act), which concerns date of completion of residential building work.
As the date of completion triggers the commencement of the statutory warranty periods, its determination is significant, particularly where there is an argument that proceedings may have been commenced out of time.
Section 3B of the Act provides:
3B Date of completion of residential building work
(1A) This section does not apply to residential building work to which section 3C applies.
Note. Section 3C provides for the date of completion of new buildings in strata schemes.
(1) The completion of residential building work occurs on the date that the work is complete within the meaning of the contract under which the work was done.
(2) If the contract does not provide for when work is complete (or there is no contract), the completion of residential building work occurs on practical completion of the work, which is when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose.
(3) It is to be presumed (unless an earlier date for practical completion can be established) that practical completion of residential building work occurred on the earliest of whichever of the following dates can be established for the work:
(a) the date on which the contractor handed over possession of the work to the owner,
(b) the date on which the contractor last attended the site to carry out work (other than work to remedy any defect that does not affect practical completion),
(c) the date of issue of an occupation certificate under the Environmental Planning and Assessment Act 1979 that authorises commencement of the use or occupation of the work,
(d) (in the case of owner-builder work) the date that is 18 months after the issue of the owner-builder permit for the work.
(4) If residential building work comprises the construction of 2 or more buildings each of which is reasonably capable of being used and occupied separately, practical completion of the individual buildings can occur at different times (so that practical completion of any one building does not require practical completion of all the buildings).
(5) This section applies for the purposes of determining when completion of residential building work occurs for the purposes of any provision of this Act, the regulations or a contract of insurance under the Home Building Compensation Fund.
As the work was owner builder work, section 3B(3)(d) of the Act was relevant.
It was the new owner’s position that the completion date was 7 February 2015, which was 18 months after the date the owner builder permit (7 August 2013). On this basis, the claim for defects, commenced in November 2016, other than major defects fell in the two year warranty period.
The owner builder relied on the exception contained within section 3B(3), “unless an earlier date for practical completion can be established”. The owner builder led evidence from a family member who had moved in to the property on 16 May 2014 and observed that the renovation of the property was complete except for a parquetry floor and carpet in the attic. Evidence from the carpenter also established that the floor was completed during May 2014.
Findings on date of completion
The Appeal Panel held the former owner successfully established an earlier practical completion date.
The evidence led by the former owner was held to show that at May 2014, the residential building works were substantially complete and reasonably capable of being used for its intended purpose.
This was despite the fact that an occupation certificate had not been issued until 22 September 2015. The Appeal Panel noted that although the Council required the owner builder to resolve discrepancies between the work as completed and the approved plans in correspondence in July 2014, no further works were required by the Council or carried out by the owner builder, which would bear upon the date of practical completion.
Accordingly the claim in so far as it related to defects other than major defects was outside of the two year statutory warranty period.
This decision illustrates the dangers of relying on (for example) the date of an occupation certificate for the commencement of the statutory warranty periods. The Act allows the Tribunal to look beyond that date for earlier practical completion dates. This is particularly hard on subsequent owners who are unlikely to have knowledge of the facts at the time the works were carried out and therefore may not be aware of just when warranty periods will expire.
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