BuildingLaw

Owners Corporations, defects and legislative reform

By July 16, 2019 No Comments

These are my suggestions for legislative reform.

First, either revoke the home warranty insurance exemption for high rise residential unit developments  or make home warranty insurance voluntary. If it is to be made voluntary, and it is not provided, the vendor to be described on all marketing material and on all contracts as an “UNINSURED VENDOR” and the material and contracts to contain a disclaimer saying something like this: “WARNING: THIS PROPERTY IS SOLD WITHOUT THE BENEFIT OF HOME WARRANTY INSURANCE. THIS MEANS THAT IF THERE ARE DEFECTS IN THE PROPERTY YOU ARE BUYING, YOU MAY NOT BE ABLE TO RECOVER THE COSTS OF RECTIFYING THE DEFECTS.” Such disclosure also to be contained on all sub-sales, with reference to the UNINSURED VENDOR being replaced by a reference to the ORIGINAL UNINSURED VENDOR. Where an uninsured property is sold without the required disclosures, the vendors to be personally liable for any defects, and if the vendor is a company, the directors of that company to be so liable. There should be a 28 day cooling off  period  in relation to all properties sold without insurance. Property sold with insurance does not have to maintain a developer bond.

Second, there should be a limitation period of 6 years from the date of issue of an Occupation Certificate for all defects.

Third, certifiers should be required to maintain professional indemnity insurance equivalent to the value of the contract  in relation to which the certification services are  provided. Purchasers who purchase a property in relation to which an Occupation Certificate is provided, and Owners Corporations constituted in relation to new  strata developments where an Occupation Certificate is  provided  be statutorily presumed to have relied upon the Occupation Certificate having been prepared and issued with due care and skill by the certifier, with the certifier having carried out all inspections necessary to satisfy itself as to the matters being certified. The Civil Liability Act apportionment provisions not to apply to claims by purchasers and Owners Corporations against certifiers for failure  to prepare and issue the Occupation Certificate. There is no point in having a certification system if certifiers cannot be held accountable.