image
image
image

Defective or incomplete Building Work and BSA Insurance Cover

In general terms if you become aware of a serious defect within 6 years 6 months of the original contract to build the house being signed you may be able to recover the cost of the repairs from the BSA Insurance scheme. This applies even if you were not the owner when the house was built.

Click on the following link to view the BSA's advice to consumers considering terminating contracts due to concerns over defects or non completion:

  RIS 001 - BSA Notes for Consumers on Contract Termination (includes Non Completion Claims process)

  Complaint Form

In relation to defective work what normally happens is that you contact the builder or tradesman that built the house or performed the defective work and ask that they return and fix the problem.

If you are unsuccessful or the builder is no longer trading you can make a formal complaint to the BSA and they may issue a "Direction to rectify" notice to the builder.

If the work is still not satisfactorily rectified the BSA in certain circumstances may process an insurance claim which will pay for another builder to fix the problem.

Sometimes the process above can be very complicated.  Lawyers Queensland Solicitors can help guide you through the claim process. If the BSA reject your claim it is important to note that if you do not agree with their decision you must apply to the Commercial and Consumer Tribunal for a review within 28 days of receiving the decision.

We to arrange a consultation with a lawyer at either the Brisbane CDB or Southport on the Gold Coast call us on Brisbane 07 3036 5233 or Gold Coast 07 5677 0533 to make a booking.

Below are extracts from the BSA website which were up to date as at October 2008.

The following information is publically available at www.bsa.qld.gov.au 

What does the policy cover?

The cover provided by the insurance scheme assists consumers when:

During the course of the contract
  • The builder becomes bankrupt or goes into liquidation; or
  • The builder fails to complete the contracted works for reasons that are not the consumers fault.
  • The builder fails to complete the contracted works and those works are found to be defective.
After completion of the work
  • The builder fails to fix defects that have been the subject of a BSA direction, or, for various reasons (eg. bankruptcy or liquidation, in another country, or deceased), cant attend to rectification.
  • The building suffers from the effects of subsidence or settlement.

Additional cover

If a claim is approved that policy also covers the following losses:

  • Reasonable cost of alternative accommodation; and
  • Furniture removal and storage costs necessarily incurred.

As with all insurance contracts, there are conditions and monetary limits. Details are provided in the insurance Policy Conditions booklet that can be obtained from any BSA office.

How much am I insured for?

The maximum benefit available under the policy is replacement value of the insured work or $400,000 (whichever is the lesser).

Who pays for it?

The insurance scheme is financed by a once-only premium. The contractor pays the premium direct to BSA.

Check your level of cover

When you receive your Certificate of Insurance from BSA check that the notified contract value is correct. If during the course of construction the net effect of any contract variations is to increase or decrease the contract value, advise BSA so that an appropriate adjustment can be made to your insurance policy. Keep your insurance policy in a safe place.

BSA Insurance Claims Process

When negotiations between you and your builder or trade contractor break down or your contract has not been completed there are options and procedures for resolving your dispute.

Your first step is to convey your concerns in writing to your building contractor, giving them a reasonable time (say 14 days) in which to address the matter.  Make sure you date, sign and keep a copy of the letter for your records.  In the event of non-completion you must ensure that your contract is properly terminated (seek legal advice) - additional information - RIS 001 - BSA Notes for Consumers on Contract Termination (includes Non Completion Claims process)

If you still can't resolve the problems in reasonable time, you may have to complete a Complaint Form.

All potential insurance claims received by BSA must be reviewed and inspected by our Resolution Services team.

The resolution process allows BSA to inspect the work, identify the party responsible and take appropriate action to hold the responsible party accountable where necessary. 

 

QUEENSLAND BUILDING SERVICES BOARD POLICY

(To be read in conjunction with the Queensland Building Services Authority Act 1991 and the Queensland Building Services Authority Regulation 2003)

RECTIFICATION OF BUILDING WORK

Guideline Policy

It is a guideline policy of the Queensland Building Services Board that a person who carries out category 1 or 2 defective building work should be required to rectify that building work, unless in all the circumstances rectification is an unreasonable remedy.

Under section 72(1) of the Queensland Building Services Authority Act 1991 (the Act), if the Queensland Building Services Authority (the Authority) is of the opinion that building work is defective, the Authority may direct the person who carried out the building work to rectify it. In deciding whether to give a direction for rectification of building work, the Act allows the Authority to take into consideration all the circumstances it considers are reasonably relevant. Those circumstances might include any delay by an owner in notifying the Authority of a defect, where the delay:

(a) in respect of a category 1 defect, exceeds 3 months after the defect became apparent; or

(b) in respect of a category 2 defect, exceeds:

(i) 6 months after the building work was completed or left incomplete; or

(ii) 7 months, if the owner notified the contractor of the defect within 6 months after

the building work was completed or left incomplete.

Under the Act, a direction cannot ordinarily be given more than 6 years and 3 months after the building work was completed or left in an incomplete state. The only exception is if the Commercial and Consumer Tribunal is satisfied, on application by the Authority, that there is sufficient reason for extending that time.

The fact that a direction is given under the Act does not prevent disciplinary action in respect of the defective building work.

Category 1 Defective Building Work

For the purposes of this policy, category 1 defective building work is:

A. Building work (other than residential construction work causing footing or slab

movement) that is faulty or unsatisfactory because it either:

(a) adversely affects the structural performance of a building;

(b) adversely affects the health or safety of persons residing in or occupying a

building;

(c) adversely affects the functional use of the building; or

(d) allows water penetration into a building.

Examples of category 1 defective building work include:

leaks in roofs, showers, doors, windows or walls;

faulty or inadequate flashing;

faulty or inadequate damp proof course;

fretting or spalling masonry;

inadequate strength mortar;

extensive cracking or distortion of wall or ceiling lining beyond normal frame

settlement;

shrinkage or thermal movement;

extensive cracking or dislodgement of floor or wall tiles;

defective, incomplete or inadequate termite protection methods;

inadequate provision for discharge of roof water;

incorrect or inadequate site drainage;

paint, large areas delaminating, adhesion failure; and

use of materials not fit for the purpose.

B. Residential construction work that has caused footing or slab movement as a result of:

(a) the contractor failing to provide the engineer with the following information (or,

if the design was provided to the contractor by the owner, the contractor failing

to obtain confirmation in writing from the engineer that the engineer had

received the following information):

(i) Location a site address, plan of survey or photograph to correctly

identify the site;

(ii) Site identification - information relevant to:

the contours of the site;

the location of trees on the site and adjoining sites;1

existing overland flow provisions;

footprint location of the proposed building and indication of

platform levels; and

location of proposed cut and fill.

(iii) Land searches searches where available necessary to establish

impediments to the proper performance or function of the footing or slab

system having regard to the sites location and condition;2

(b) the contractor failing to obtain written confirmation from a registered

professional engineer in Queensland (RPEQ) that:

Site Classification

(i) the engineer or their representative has visited the site;

1 This information indicates to the engineer, through the use of photographs or other means, any trees and vegetation in the vicinity of the footing or slab system, including those adjacent to the footing or slab system on adjoining sites. It is noted, however, that an additional site visit by the engineer may still be necessary to determine whether design precautions are needed.

2 These searches may include flooding, underground infrastructure, easements, vegetation protection and subdivisional fill. The nature of the searches, however, will always be dependant on the sites location and condition.

(ii) the site investigation for soil testing has been undertaken by a RPEQ or a

soil tester licensed under the Act;

(iii) exploration positions or bore holes conducted by the site investigator have

been undertaken in the proposed footprint of the building and below final

platform level in accordance with Australian Standard AS2870;3

(iv) soil samples have been taken for the purposes of laboratory testing in

accordance with Australian Standard AS2870;

(v) for clay sites the laboratory test and soil test report included ISS and YS

values (obtained by shrink and swell tests) in accordance with Australian

Standard AS2870;4

Engineer Design

(vi) the design takes into account site conditions (eg location of trees,

easements, fill etc) including all information provided to the engineer

about location, site identification and land searches referred to in

paragraphs B(a)(i), B(a)(ii) and B(a)(iii) above;

(vii) the design includes photographs of the site to correctly identify onsite

and adjoining site topography prior to site specific earthworks;

(viii) the design complies with all relevant Australian Standards including

AS2870, AS3600 and AS3700;

(ix) the design is certified by a RPEQ; and

(x) the design drawings include the selected footing systems, any special site

works, means of diverting surface water away from the slab, actual

location of control joints in brick and masonry construction, location of

retaining walls and requirements for articulation (flexible joints), roof

storm water and sanitary drainage;

(c) the contractor failing to:

Compliance with Design

(i) obtain the design drawings;

(ii) comply with all components of the design, including the selected footing

systems, any special site works, means of diverting surface water away

from the slab, location of control joints in brick and masonry construction,

location of retaining walls and requirements for articulation (flexible

joints), roof storm water and sanitary drainage;

3 Unless otherwise prescribed under AS2870, a minimum of two exploration positions or bore holes are recommended as part of any site investigation, as well as any other additional investigation necessary to determine the characteristics of the site in accordance with AS2870. It is further recommended that bore holes extend to a depth to refusal on rock or to the depth of zone of seasonal influence and below final platform level.

4 AS2870 recommends that in Queensland, shrinkage index tests on an undisturbed core sample are

used for clay sites rather than the conventional plastic index and linear shrinkage tests unless a

reliable correlation of these tests with ground movement in the region is available.

(iii) construct the footing or slab system in accordance with all relevant

Australian Standards, including AS2870, AS3600, AS3700 and AS3500;

or

(iv) ensure that a RPEQ or building certifier has certified that the design has

been complied with by the contractor.

Category 2 Defective Building Work

For the purposes of this policy, category 2 defective building work is building work that is faulty or unsatisfactory because it does not meet reasonable standards of construction and finish or has caused a settling in period defect in a new building.

Examples of category 2 defective building work include:

sticking doors or windows;

cracked plasterboard joints, cornice joints; and

poor finishing detail, including paint work.

Rescission of Board Policies

The following policies of the Queensland Building Services Board are rescinded as of the day

that this guideline policy takes effect:

Section 72: Power to Require Rectification of Building Work made by the Board on 20

December 1995; and

Subsidence/Settlement Responsibility for Rectification made by the Board on

31 May 2000.

ENDNOTES

1. Made by the Queensland Building Services Board on 18 March 2004.

2. Approved by regulation on 1 July 2004 (SL No. 66 of 2004).

3. Published in the gazette on 27 August 2004.

4. Commences and takes effect on 1 September 2004.

5. Not required to be laid before the Legislative Assembly.

6. The administering agency is the Queensland Building Services Authority.

To see a lawyer in Brisbane CBD phone 07 3036 5233 or at Southport on the Gold Coast phone 07 56770533.

 























image