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Shrinking protections for owners corporations

Construction Law News | December 2012

The decision in case of Owners Corporation Strata Plan 72535 v. Brookfield [2012] NSWSC 712 has rejected the suggestion that a builder or developer owes a duty of care to subsequent owners of residential properties, including owners corporations. The decision, reached earlier this year, noted that the legislature had provided for statutory warranties to be owed by builders to subsequent owners and that it was not for the courts to quickly substitute their own judgment and extend the liability with additional “duties of care”. Further, the decision rejected the proposition that an owners corporation could be vulnerable to builders and developers as they had the benefit of the statutory warranties under the Home Building Act. This follows the changes made in February of this year that reduced the limitation periods for the warranties for non-structural defects to 2 years and for structural defects to 6 years. This leaves a small window of opportunity for owners corporations to seek remedies for defective works on buildings and may lead to the pursuit of alternative remedies in the future where claims are unable to be satisfied.

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