Building Dispute Resolution in Tasmania

What it is

Tasmania is the one Australian state with no compulsory home warranty insurance in force. There is no policy waiting to pay out when a builder folds. That single fact changes how a Tasmanian residential building dispute is run, because the dispute pathway is the homeowner protection. Get it wrong and there is nothing behind it.

The spine is the Residential Building Work Contracts and Dispute Resolution Act 2016 (Tas). It carries the statutory warranties, the written contract rules, the mediation regime run by the Director of Building Control, and the gateway to the Tasmanian Civil and Administrative Tribunal. Consumer, Building and Occupational Services (CBOS), part of the Department of Justice, administers it.

The Act applies to residential building work with a contract price of $20,000 or more, and it requires that contract to be in writing before work begins. Below $20,000 the Act does not apply at all.

The statutory warranties

Part 6 implies warranties into every residential building work contract the Act covers. The core three are:

• Materials will be good and suitable for the purpose they are used for, and new unless the contract says otherwise.
• The work will be performed in accordance with all relevant laws and legal requirements.
• The work will be performed in an appropriate and skilful way, and with reasonable care and skill.

A second set applies to particular contracts: adherence to the plans, suitability for occupation, reasonable diligence and the calculation of provisional sums with care and skill. The warranties run with the land, so a purchaser takes the benefit of them.

Proceedings for breach of a statutory warranty must be commenced within six years after the date of practical completion.

The defects document and the right to rectify

Tasmania has no formal defect notice regime like New South Wales. What it has is the correction of minor defects and omissions. Where the owner claims minor defects or omissions on or after the completion day and the builder agrees they exist, the builder must give the owner a defects document, then has six months to take all reasonable steps to correct them.

The flip side protects the builder. A builder who is not enabled to do the work is not liable for failing to correct it. An owner who locks the builder out and then sues has a problem.

Under the Building Act 2016 (Tas) the relevant building surveyor also issues a defective work order, but only within two years of the certificate of completion.

Notice of dispute and mediation

The CBOS process starts with a notice of dispute lodged with the Director of Building Control by the owner or the builder. You must have made a reasonable attempt to resolve it yourself first, and you cannot use it if the matter is already in adjudication, arbitration or court.

• A notice of dispute may only be lodged within six years after the date of practical completion.
• The Director must accept or reject the notice within 10 business days.
• On acceptance, the Director establishes a mediation panel within two business days.
• If the parties do not sign a settlement within 20 business days of the panel being established, the panel stops and reports back to the Director.

There is no application fee. The parties pay the mediator directly and normally share the cost equally. Attendance is voluntary, but the certificate from a failed mediation is the ticket to the tribunal.

TASCAT and the courts

TASCAT decides whether residential building work was completed satisfactorily, whether it complies with the Act, and disputes about contract terms. Work is taken not to have been completed satisfactorily where a statutory warranty has been breached.

The gateway matters. TASCAT only has jurisdiction if the notice of dispute was rejected on discretionary grounds, or a settlement was registered, or a mediation certificate was issued. You cannot skip the Director. TASCAT can order rectification or completion, order payment of the reasonable costs, declare a contract term unjust, and declare a registered settlement binding and enforceable. There is no monetary cap in the Act.

The court route runs beside it. The Magistrates Court (Civil Division) hears minor civil claims up to $15,000 and civil claims from $15,001 to $50,000, and can go higher only if all parties agree. General contract and tort claims run on the six year limit in the Limitation Act 1974 (Tas).

What this means for a Tasmanian builder

With no warranty insurer behind you, your contract, your defects document and your conduct in mediation are the whole defence. Keep the contract in writing, keep the defects document dated, and keep evidence that you offered to rectify and were given or refused access.

Home warranty insurance is coming. The enabling amendments are passed but not proclaimed, and the government meanwhile runs a discretionary assistance package for consumers hit by builder failures. Plan on the pathway.