The Design and Building Practitioners Act 2020 (NSW) has created a new way for owners corporations in New South Wales to seek compensation for building defects. This includes defect cases relating to water ingress, faulty fire safety systems and combustible cladding. 

The new laws: 

• commenced on 11 June 2020; 
• create a new statutory duty of care to avoid loss caused by defects;
• operate retrospectively for 10 years from the commencement date, 11 June 2020; 
• applies to builders, developers, other design practitioners against whom owners corporation may not previously been able to sue;
• also applies to building products. 

This should be taken as an additional legal right and does not replace or diminish in any way the other rights and remedies arising including those arising from a breach of homeowners’ warranties. 

It means that owners corporations now have a right to sue on a retrospective statutory duty of care against developers, and others like architects, engineers and designers. Previously, these types of actions were not available to owners corporations because of a High Court ruling.

It is especially important to note these new rights are retrospective. So, if you have received advice you have no claim, now is the time to have that looked at again. 

Strata managers should get legal advice for owner’s corporations about these new rights and the retrospective application.