Developers and builders should be aware of a recent case in the Supreme Court of NSW where an owners corporation (OC) failed in its attempt to sue a builder for alleged defective works in a serviced apartment scheme.
The OC conceded that the contractual defects liability period had expired and that it did not have the benefit of the statutory warranties under the Home Building Act (which only relates to residential buildings) but argued that the builder was liable in negligence because it owed the OC a common law duty of care.
The decision confirmed that owners corporations will have great difficulty establishing that builders are liable for defective works in developments that are used for commercial and other non-residential purposes.
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