When someone makes a building defect claim after the two-year warranty period for non-major (minor) defects has already passed, one of the first and most important questions is whether the issue qualifies as a “major defect” under the Home Building Act 1989 (NSW) (the Act). This is critical because major defects have a six-year warranty period, while all other defects only have two years. If a defect is not correctly classified as a major defect, the claim may fail simply because it is out of time for a minor defect.

A major defect is defined in section 18E of the Act. In simple terms, it is a defect in a major element of the building that arises from things like faulty workmanship, bad materials, defective design or failure to meet the structural requirements of the National Construction Code. To be considered “major”, the defect must either make the building (or part of it) unable to be lived in or used properly, or be likely to cause serious damage, destruction, or even a threat of collapse. The law also includes certain safety-related defects, such as combustible external cladding on high-rise buildings, or the use of banned building products as major defects.

A major defect must also involve a “major element” of the building. These include structural components such as foundations, walls, floors, beams and roofs, as well as fire safety systems and waterproofing. The Tribunal (or NCAT) has repeatedly confirmed that waterproofing is a major element, and it should be understood in a broad, practical sense, not a narrow technical one.

A common misunderstanding is that a defect must already be severe or close to causing significant damage before it can be classed as major. That is not the case. The Supreme Court in, Stevenson v Ashton [2019] NSWSC 1689, has confirmed that a major defect does not need to be “imminent”, “dire”, or already causing major harm. It is enough if the defect is likely to cause one of the serious outcomes listed in the Act.

In deciding whether a defect is a major defect usually involves a two-step process: first, determining whether the defect affects a major element of the building, and second, deciding whether it has caused or is likely to cause serious consequences.

It is also important to consider how long the defect has existed, whether it has already caused any damage, and the expected lifespan of the materials involved. Water ingress, even if only during heavy rain, is often taken seriously because of the risk of future damage, mould or structural problems.

Understanding what counts as a major defect is important because of the strict time limits in the Act. The definition is broader than many people expect, especially when it comes to waterproofing and defects that may worsen over time. Knowing these principles can help homeowners and owners corporations protect their rights and take action within the required timeframes.

If you’re concerned about possible defects or uncertain about your rights, reach out to us for a free professional consultation – we’re here to help.