QBCC Statutory Warranties…
Queensland Residential Building and Construction
Statutory Warranties
We have all heard about statutory warranties when it comes to a residential building in Queensland, but what are they exactly?
Part 3 of The QBCC Act 1991 (Qld) (‘the Act’) sets out statutory warranties.
The warranties mentioned in Part 3 Division 2 are part of every regulated contract.
A warranty mentioned in a section of division 3 is part of each regulated contract that is a contract of the type to which the section applies.
Regulated Contracts
A regulated contract is defined under the Act as:-
- a domestic building contract for which the contract price is more than the regulated amount;
- a cost plus contract under which the total amount payable for the contracted services is reasonably estimated to be more than the regulated amount;
- a mixed-purpose contract under which the amount referable to the contracted services is more than the regulated amount.
However, a contract mentioned in 3 above is a regulated contract only to the extent to which the contract relates to the contracted services.
The regulated amount means $3,300 or the higher amount, if any, prescribed by regulation.
Implied warranties for all contracts
The following are warranties which are implied in for all contracts: –
- The building contractor warrants that all materials to be supplied for use in the subject work— (a) will be good and, having regard to the relevant criteria, suitable for the purpose for which they are used; and (b) unless otherwise stated in the contract, will be new.
- The building contractor warrants the subject work will be carried out in accordance with all relevant laws and legal requirements, including, for example, the Building Act 1975;
- The building contractor warrants the subject work will be carried out— (a) in an appropriate and skilful way; and (b) with reasonable care and skill.
Implied warranties for particular contracts
The following are warranties which are implied for particular contracts: –
- The building contractor warrants the subject work will be carried out in accordance with the plans and specifications – if plans and specifications form part of the contract;
- The building contractor warrants the detached dwelling or home will be suitable for occupation when the work is finished – if the subject work consists of the erection or construction of a detached dwelling to a stage suitable for occupation; or (b) is work intended to renovate, alter, extend, improve or repair a home to a stage suitable for occupation;
- The building contractor warrants the subject work will be carried out with reasonable diligence;
- The building contractor warrants the provisional sum or prime cost item has been calculated with reasonable care and skill, having regard to all the information reasonably available when the contract is entered into (including information about the nature and location of the building site) – if a regulated contract providing for a provisional sum or prime cost item.
No contracting out
You cannot contract out of statutory warranties. Any provision of a contract that seeks to exclude a warranty is void. The original building owner and subsequent building owners can enforce the statutory warranties against the building contractor.
Enforcement of warranties
There are limitation periods for the enforcement of statutory warranties to be aware of.
Proceedings for a breach of a statutory warranty must be started before the end of the warranty period for the breach.
However, if the breach of statutory warranty becomes apparent within the last 6 months of the warranty period, proceedings may be started within a further 6 months after the end of the warranty period.
The warranty period for a regulated contract is 6 years for a breach that results in a structural defect, as prescribed by regulation, or 1 year in any other case and starts—
- if the subject work is completed—on completion of the work; or
- if the subject work is not completed—
- if the contract is terminated—the date the contract is terminated; or
- if the contract is not terminated—the date on which work under the contract ceased; or
- if the contract is not terminated and work under the contract was not started—the date the contract was entered into.
A breach of a statutory warranty becomes apparent when any person entitled to the benefit of the warranty first becomes aware, or ought reasonably to have become aware, of the breach.
Australian Consumer Law
The Australian Consumer Law (Queensland) also provides particular statutory consumer guarantees if a person supplies, in trade or commerce, goods or services to a consumer as defined under that law.
If you require legal advice about any matter raised in this article, please contact us on (07) 5458 6855 or email mklein@kleinlegal.com.au.