Do I have to allow the builder back to fix defects?
Owners are required to be reasonable in their dealings with builders post-construction –even if you don’t really want the builder to come back and fix what shouldn’t have been defects in the first place. There are processes in new home contracts which allow for builders to return to site within several months to have the chance at fixing defects or completing the works. This is what we call giving the builder a reasonable opportunity to try and fix the defects or complete works it was originally contracted to do.
AN OWNER MUST GIVE REASONABLE OPPORTUNITY TO THE BUILDER TO FIX DEFECTS OR COMPLETE WORKS
It’s not sufficient to have an independent expert attend your property and list and cost all of the defects you allege the builder should rectify, and then walk yourself through the DBDRV and file at VCAT for breach of contract or the Domestic Building Contracts Act 1995 (Vic).
In The Owners – Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067, Ball J said:
In the case of building contracts, it is also generally accepted that the owner must give the builder a reasonable opportunity to rectify any defects … [t]he owner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects, except where its refusal to give the builder that opportunity is reasonable or where the builder has repudiated the contract by refusing to conduct any repairs … That obligation may be an aspect of the duty to mitigate, since it may be less expensive for the builder rather than a third party to rectify the defects, particularly if the builder is still on site.
This was reiterated more recently in The Owners – Strata Plan 89041 v Galyan Pty Ltd [2019] NSWSC 619 Stevenson J cited the Di Blasio case above at [21] and said:
… in cases involving building contracts, the owner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects, except where its refusal to give the builder that opportunity is reasonable or where the builder has repudiated the contract by refusing to conduct any repairs.
It’s important to engage with the builder, as resistant you may be, to give the builder a decent opportunity to come back and fix it before you claim damages at VCAT and endure the stress and ever-increasing costs of running litigation.
AN OWNER CAN’T RECOVER LOSSES RELATED TO ITS UNREASONABLE BEHAVIOUR
An owner is also required to mitigate its loss –with more serious defects such as those that affect the structure of the building e.g. water ingress, it can’t simply wait on the builder to return and fix it (especially if the builder is resistant to returning). This principle reaches back to 1911 where O’Connor J stated that:
There is no question that it is one of the principles on which damages are assessed that a party to an agreement suffering injury from the other party’s breach of its terms is bound to exercise reasonable care in mitigating the injurious consequences of the breach, and is not entitled to recover from the party in default any damage which the exercise of reasonable care on his part would have prevented from arising.[1]
In the most recent case at VCAT, which has exclusive jurisdiction to hear building and construction disputes, Member Nash held that:
As noted above the general principle is that a person who suffers loss must take all reasonable steps to act reasonably with respect to the extent of that loss, and in particular, to mitigate the loss … That is, the wronged party is not entitled to recover losses attributable to its own unreasonable conduct.[2]
It follows that an owner must be reasonable, and give the builder an opportunity to fix the defects at their new home. Otherwise, an owners claim for damages may be undercut by its failure to minimise the damage it suffered particularly after occupation of the property and long passage of time.
Owners are required to be reasonable in their dealings with builders post-construction –even if you don’t really want the builder to come back and fix what shouldn’t have been defects in the first place. There are processes in new home contracts which allow for builders to return to site within several months to have the chance at fixing defects or completing the works. This is what we call giving the builder a reasonable opportunity to try and fix the defects or complete works it was originally contracted to do.