Cracked slabs, leaks and dodgy waterproofing are every owner's nightmare — but you have stronger rights than you might think. Here is a plain-English guide to the warranties that protect you, what to do when a builder won't fix the problem, and how NSW is tightening the rules in 2026.
Photo: royalty-free and copyright-free, sourced from Pexels.
You saved for years, signed the contract, and moved into a home that was meant to be built to last. Then the cracks appear — sometimes literally: a leaking shower, a bowing wall, water where water should never be. Building defects are one of the most stressful and expensive problems a homeowner or apartment owner can face.
The reassuring news is that in New South Wales you are not on your own. There is a set of statutory warranties that the law puts into every residential building contract, a regulator that can step in, and — from 2026 — a wave of reforms designed to lift building quality and give owners stronger protection. Here is how it all fits together, in plain English.
Under the Home Building Act 1989 (NSW), a builder doing residential work gives you a set of statutory warranties — promises that the law implies into the contract whether or not they are written down. They include that the work will be done with due care and skill, in accordance with the plans, using good and suitable materials, and that the home will be reasonably fit to live in.
Two numbers are worth remembering, because they set how long you are protected:
both measured from the completion of the work. There is also a helpful safety net: if a defect first becomes apparent in the last six months of a warranty period, you generally have a further six months to start proceedings.
The difference between a major defect and an ordinary one matters, because it decides whether you have two years or six. Broadly, a major defect is a defect in a major element of the building — think of the parts that hold the building up, keep it weathertight, or keep it fire-safe — caused by faulty design, workmanship or materials, or a failure to meet the structural performance requirements of the National Construction Code, that:
Serious waterproofing failures are a common example, because water getting into the structure can do exactly this kind of damage. If you are not sure which category your problem falls into, that is precisely the sort of question worth getting looked at early — before a deadline passes.
Most defect disputes are better resolved early and in writing than left to fester. A sensible order of steps:
NSW is part-way through a significant tightening of its building laws, aimed squarely at lifting quality and protecting owners. The direction of the reforms includes:
One of the most significant changes for apartment owners is decennial liability insurance (DLI) — a new type of cover being introduced in NSW. It is designed as an insurance of first resort: rather than an owners corporation having to chase a builder or developer through the courts, DLI is intended to let them make a claim as soon as a serious defect is found.
A DLI policy is aimed at critical parts of a building’s common property — its structure, waterproofing and fire-safety systems — for up to 10 years after the building is first occupied. Crucially, the cover is designed to respond even if the builder or developer has become insolvent, which has been one of the hardest gaps for apartment owners to bridge. The rollout is being phased, so if you are buying into or managing a strata scheme it is worth checking the current position.
Michael Campbell Law is a boutique Hills District practice with a particular focus on construction law. Michael is a civil engineer as well as a solicitor, with experience on NSW infrastructure projects — so he reads a defect list and a building contract with a practical, technical eye, not just a legal one.
For homeowners and owners corporations across Baulkham Hills, Norwest, Castle Hill, the Hills District and Western Sydney, that means clear advice on whether a problem is a major defect, how to hold the builder to their warranties, and the best way to pursue rectification — through the regulator, NCAT, or an insurance claim. Related reading: our guides on builder insolvency and Security of Payment for subcontractors. If you would like to talk through a build of your own, you are welcome to get in touch.
This article is general information only and not legal advice. The law, figures and reform timelines described are current as at July 2026 and may change — several NSW building reforms are being phased in and commencement dates can move, so confirm the current position before acting. For advice about your situation, contact Michael Campbell Law or another qualified solicitor.
Under the Home Building Act 1989, statutory warranties run for 6 years for major (structural) defects and 2 years for other defects, measured from completion of the work. If a defect becomes apparent in the last 6 months of the period, you generally have a further 6 months to start proceedings.
A major defect is broadly one in a major (structural) element of the building, caused by defective design, workmanship or materials or a failure to meet the structural performance requirements of the National Construction Code, that makes the building or part of it unable to be used or lived in, causes destruction, or threatens collapse. Serious waterproofing failures often fall into this category.
No. The statutory warranties under the Home Building Act cannot be signed away. A contract term that tries to limit or exclude them is void. The warranties also pass to later owners of the property, so a subsequent buyer can still rely on them within the warranty period.
Raise the defect with the builder in writing while you are within the warranty period. If it is not resolved, you can complain to Building Commission NSW, which investigates residential building defect complaints and can direct a builder to rectify work, and disputes can proceed to the NSW Civil and Administrative Tribunal (NCAT). Get advice early, because strict time limits apply.
Where a builder has become insolvent, died, disappeared or had their licence suspended for not complying with an order, Home Building Compensation (HBC) cover may respond for residential work over $20,000. See our separate guide on builder insolvency, and act early to stay within the time limits.
Decennial liability insurance (DLI) is a new type of cover being introduced in NSW for apartment buildings. It is designed as an insurance of first resort that lets an owners corporation have serious defects in common property, such as structure, waterproofing and fire safety, fixed for up to 10 years after the building is first occupied, even if the builder or developer is no longer around.
Construction is one of the areas Michael handles personally — as an engineer and a solicitor. Whether it is a leaking shower or a structural crack, you are welcome to book a free, no-obligation consultation.