How Can I Recover Money To Get Defective Building Work Fixed?

Things are already going pretty badly for you. Instead of fulfilling your dreams, your building work has turned out to be a nightmare. So of course, you want to know if there’s some way you can get it fixed. In New South Wales, the Home Building Act sets out a dispute resolution procedure to get the builder to rectify any defective work. If the builder won’t co-operate, then you can make a claim to your home warranty insurer.

Ask first

First of all, the Office recommends that you try dealing directly with your builder. After all, it could just be a misunderstanding or something they haven’t noticed; they might be prepared to save themselves some hassle by fixing it up for you straightaway. If you’re not getting anywhere in discussion, you’re advised to send your objections to the builder in writing – by registered mail, so you’ve got proof of writing.

Orders please

By the sound of it, though, you’ve already gone past this stage. You’re already talking about recovering money. The next stage is to take your concerns to the Office of Fair Trading. They can send out an Inspector from the Home Building Service, who will examine the work in the presence of you and the builder. If they agree that there are defects, they can issue the builder with a Rectification Order, which will state what needs fixing, how it is to be fixed, and when this should be done. But again, you seem to have gone beyond this stage as well – you don’t just want it fixed, you need cash to pay for it.

Try the Tribunal

If this doesn’t work, you can try lodging your claim with the Consumer, Trader and Tenancy Tribunal. If the tribunal agrees that rectification work needs to be done, it can order the builder to pay you for it, including compensation if this is appropriate. Other orders the tribunal can give include relief from payment, the delivery, return and replacement of items, and disciplinary action against the builder. However, there are limits to the Consumer, Trader, and Tenancy Tribunal’s jurisdiction, or you may not agree with its decision – if the sum involved is substantial, you may have to go to court.


The Home Building Act also sets up a home warranty insurance scheme, which provides protection for consumers against faulty and incomplete residential building work. The Act currently requires insurance where the value of the work is over $12,000. If the defective work was undertaken after May 1997 and caused you a financial loss, and the builder has refused to fix the work or pay compensation, you may be able to make a claim on the private insurer named in the certificate of home warranty insurance.

The procedure is going to be similar to the one above. First, you should contact the insurer directly and ask about their policy and how you can make the claim. Again, you should set out your claim in writing (some insurers prefer you to use their forms, but you don’t have to), send it by registered mail, and keep a copy. You should notify the insurer if you have made or make a claim against the builder.

If you aren’t happy with the insurer’s decision, you can lodge a claim with the Tribunal, but it must be within 45 days.

Frank Egan is the Chief Executive Officer of LAC Building Construction Lawyers and has over 27 years of experience as a lawyer.


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