Liability for building defects depends on who was responsible for the work, whether the defect is structural or non-structural, and how much time has passed since the occupancy permit was issued.
For apartment buildings and strata developments in Melbourne, the pathway is rarely straightforward.
If your building has ongoing defects, it is also worth asking whether they are being properly managed.
Delays, missed deadlines, or poor communication can significantly affect an owners corporation’s ability to recover rectification costs.
Key Takeaways:
- Liability can sit with the builder, architect, engineer, building surveyor or in limited cases a registered plumber.
- Domestic Building Insurance only responds if the builder has died, disappeared or become insolvent.
- Statutory warranties under the Domestic Building Contracts Act protect both lot owners and the owners corporation.
- Strict time limits apply. Two years for non structural defects and six years for structural defects under insurance policies. Broader limitation periods may also apply.
- Early action protects the owners corporation’s financial position.
Step 1: Confirm who the builder is and whether they are solvent
In most strata defect matters, the builder or head contractor is the first point of liability.
Under the Domestic Building Contracts Act 1995 (Vic), statutory warranties are implied into domestic building contracts. These warranties require that work is:
- carried out in a proper and workmanlike manner
- in accordance with plans and specifications
- in compliance with all laws
- suitable for occupation
Importantly for strata buildings, those warranties extend beyond the original contracting party. They benefit subsequent purchasers and the owners corporation for defects in common property.
If the builder is still trading and solvent, the owners corporation should notify them in writing and request rectification.
If the builder refuses or fails to respond, the next step is typically to lodge a dispute with Domestic Building Dispute Resolution Victoria.
If resolution fails there, an application can be made to Victorian Civil and Administrative Tribunal.
Step 2: Check whether domestic building insurance applies
For residential buildings up to three storeys, builders must obtain Domestic Building Insurance.
This insurance does not operate like standard property insurance. It only responds if the builder:
- Has died
- Has disappeared
- Has become insolvent
If triggered, the policy generally provides cover for:
- Non structural defects identified within two years of the occupancy permit
- Structural defects identified within six years of the occupancy permit
Timing is critical. Committees should not assume they have unlimited time.
For multi-storey developments, insurance requirements differ and alternative recovery pathways may need to be explored.
Step 3: Assess whether other professionals may be liable
In larger Melbourne apartment developments, defects are not always caused by poor workmanship alone.
Architects and engineers
Design professionals can be liable where a defect arises from faulty design rather than construction error.
For example:
- Structural engineers may be responsible for inadequate footing or framing design.
- Acoustic or fire engineers may be responsible where compliance failures stem from design documentation.
They can owe a duty of care to avoid economic loss if they fail to meet the reasonable standard expected of a professional in their field.
Building surveyors
Building surveyors have statutory functions under the Building Act 1993 (Vic).
They are responsible for:
- Issuing building permits
- Conducting mandatory inspections
- Issuing occupancy permits
However, they are not automatically liable for every defect.
Liability generally arises if:
- A building permit was issued for work that could never comply with relevant laws, or
- A defect should reasonably have been identified during mandatory inspections and renders the building unsuitable for occupation.
VCAT will not hold a surveyor responsible for defects that were not required to be identified at footing, frame or final inspection stages.
Subcontractors and registered plumbers
In most cases, subcontractors are not directly liable to the owners corporation. The builder remains contractually responsible and must pursue its subcontractors if necessary.
A key exception in Victoria can involve registered plumbers. In certain circumstances, an owner may pursue a plumber directly for defective plumbing work.
Step 4: Clarify what the owners corporation is responsible for
One of the most common misunderstandings I see is confusion between lot property and common property.
Under the Owners Corporations Act 2006 (Vic), the owners corporation is responsible for maintaining and repairing common property. That means the Committee has the authority and obligation to investigate and pursue defect claims affecting:
- external cladding
- roofing
- structural elements
- shared services
- car parks
- lifts
- common plumbing and drainage
Individual lot owners are generally responsible for defects within their lot, unless the defect originates from common property.
This distinction is critical before commencing any formal dispute process.
If your Committee is struggling to get clear answers about defects, insurance, or recovery options, it may be time to review whether your current owners corporation manager is providing the level of oversight your building requires. Strong defect management starts with strong strata management.
Step 5: Emphasise time limits
Defect claims are time sensitive.
Domestic Building Insurance policy periods are:
- Two years for non-structural defects
- Six years for structural defects
Separate limitation periods may apply under contract and negligence law, and there is also a long stop limitation period under the Building Act.
What should a Committee do immediately?
When defects are identified in a strata building in Melbourne, I recommend the following:
- document the defects thoroughly with photos and written reports
- obtain an independent building consultant report where appropriate
- confirm the date of occupancy permit
- identify whether the defect affects common property
- notify the builder formally in writing
- monitor limitation deadlines
Taking structured early action protects the financial position of the owners corporation and demonstrates that the Committee has fulfilled its duties.
Final thoughts for Melbourne Committees
Building defect liability in Victoria is rarely straightforward. Builders, engineers, architects and surveyors each carry different responsibilities, and strict limitation periods can significantly affect your recovery options.
However, one factor often overlooked is how well the defect process itself is managed. Poor coordination, delayed reporting or missed statutory deadlines can cost an owners corporation far more than the defect itself.
If your building in Melbourne is dealing with recurring defects, unresolved rectification issues or uncertainty about who is responsible, it may be time to reassess how your strata is being managed.
At Strata Management Consultants, we help Committees transition to reliable, accountable owners corporation management so that complex issues like building defects are handled proactively and strategically.
If you are unsure whether your building is being managed properly, speak with a Consultant about your options.
