Defects, Warranties and Post-Build Care

Understanding your long term rights and the maintenance requirements of a new home ensures its value is preserved.

Victorian Statutory Warranties

In Victoria, new homes are protected by statutory warranties under the Domestic Building Contracts Act 1995. These warranties are legally binding and cannot be signed away in a contract. They cover structural defects for six years and non structural defects for two years from the date the Occupancy Permit was issued. A structural defect is one that affects the stability or load bearing components of the building, such as the foundations, floors, walls, or roof. Non structural defects include things like leaking taps, minor plaster cracks, or peeling paint. If you discover a defect, you must notify the builder in writing as soon as possible.

The builder is legally required to rectify defects that are a result of their work not meeting the required standards. If the builder refuses to fix a legitimate defect, you can contact Consumer Affairs Victoria for assistance. They offer a free conciliation service to help resolve disputes between homeowners and builders. If conciliation fails, you may need to apply to the Victorian Civil and Administrative Tribunal (VCAT) for a ruling. It is important to keep a clear record of all communication, photos of the defects, and copies of your original contract and reports to support your case.

The Importance of Maintenance

While new homes are built to high standards, they still require regular maintenance to remain in good condition. Some builder warranties are conditional on you performing basic upkeep. For example, if you allow garden beds to build up against the house, blocking weep holes and leading to termite entry or moisture damage, the builder may not be liable for the repairs. Similarly, you must ensure that the site drainage is maintained so that water does not pool near the footings. In Victorian reactive soils, keeping moisture levels consistent around the slab is vital to prevent soil movement and cracking.

Regularly inspect your home for signs of trouble. Look for small leaks under sinks, check the gutters for debris, and keep an eye on any movement in the walls or ceilings. Most new homes will experience some minor 'settling' cracks in the first year as the materials dry out and the building adjusts to its weight. These are usually aesthetic and can be fixed during your next paint job. However, if cracks are wider than a few millimetres or are growing rapidly, you should consult a professional. Proactive maintenance is always cheaper than reactive repairs.

Making a Claim on DBI

Domestic Building Insurance (DBI) is a 'last resort' insurance in Victoria. This means you can only make a claim if the builder has died, disappeared, or become insolvent, or if they fail to comply with a VCAT order. DBI covers you for structural defects and completion costs up to a certain limit (check the current limit on the VMIA website). It does not cover you just because you are unhappy with the builder's work if the builder is still operating. If you suspect your builder is in financial trouble, contact the Victorian Managed Insurance Authority (VMIA) or the insurer listed on your DBI certificate immediately.

To make a successful DBI claim, you will need to provide extensive documentation, including the DBI certificate, the building contract, evidence of payments, and expert reports detailing the defects. The process can be complex and time consuming, so it is important to act quickly. Always verify that your DBI policy is valid before the build starts. You can do this by checking the VMIA's online portal. Having this insurance provides peace of mind that even if the worst happens to the building company, you have a path to finishing your home or fixing major structural failures.

• Notify the builder of defects in writing
• Understand the 6-year structural warranty period
• Maintain site drainage and weep holes
• Keep records of all maintenance performed
• Verify the 'last resort' conditions for DBI claims