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Court ruling goes against owners

By Michael Crawford
13 October 2014 | 1 minute read
Law1

A recent High Court ruling has dramatically cut down the time apartment owners can take builders to court to right the wrongs they have made through cutting corners.

 

The ruling, handed down last week, was the result of a two-year legal wrangle between Brookfield Multiplex and the owners’ corporation of a 22-storey apartment complex in the northern Sydney suburb of Chatswood.

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Findings handed down by the High Court concluded the purchasers of apartments were "investors in a hotel venture" and Brookfield did not have a contract with the owners’ corporation.

The court found the owners' corporation of the serviced apartments could not sue the builder to recover the cost of fixing the alleged defect.

A previous dispute with a separate owners' corporation, responsible for floors 10 through to 22 had been settled.

Christopher Kerion of Kerin Benson Lawyers said the ruling has a massive impact in terms of how many building defects are in buildings around Australia. The problem, he believes, is endemic.

“The City Futures Research Centre, part of the University of NSW, did a survey in 2012 that found 85 per cent of respondents had one or more defects in buildings since 2000,” Mr Kerion said.

“Clearly the problem is endemic; if you are going to buy a new unit, be aware of the fact it is probably going to have defects but what leverage do you have to get the builder to come back and fix the defect.

“The limitation to do that is now two years instead of six, and if that time passes you have lost your right and ability to sue.”

Incoming changes to the Home Building Amendment Act begin on December 1. The changes to the act will cut down the time it takes to report a major defect, from six years down to two.

 

 

Court ruling goes against owners
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top suburbs

12 month growth
Box Hill
127.02%
Mollymook
82.85%
Brightwaters
79.93%
Cleve
78.13%
Bawley Point
76.2%
Murrays Beach
75.57%
Terranora
70%
Crescent Head
69.38%
Park Ridge South
68.32%
Mollymook Beach
67.09%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
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