Building Dispute Resolution in Western Australia

What it is

Western Australia handles building disputes through Building and Energy, the state building regulator, under the Building Services (Complaint Resolution and Administration) Act 2011 (WA). The Building Commissioner sits at the top of it and can order a builder to fix work or pay money without anyone going near a court.

What most people miss is that WA has two different complaints, with different subject matter, different people who can lodge them and different time limits. Pick the wrong one and you can be out of time on a complaint you would have won.

Home Indemnity Insurance sits alongside this and is far narrower than owners expect. WA also has no statutory cooling-off period for home building contracts. Once the contract is signed, it is signed.

Two complaints, one Act

A building service complaint is about the work. It says a regulated building service was not carried out in a proper and proficient manner, or is faulty or unsatisfactory. Anyone adversely affected can lodge it, not just the owner. A neighbour whose retaining wall moved because of your excavation can lodge one.

A home building work contract complaint is about the contract. Only an owner or builder under a home building work contract can lodge it, and it deals with matters under the Home Building Contracts Act 1991 (WA): variations, breaches and payments. The contract must be worth more than $7,500 and less than $500,000. Cost-plus contracts and subcontracts sit outside the definition.

The time limits

• Building service complaint. Out of time if made more than six years after completion of the regulated building service. Completion is fixed by prescribed criteria, or failing that, the date the service was last carried out.
• Home building work contract complaint. Generally three years, running from when the contract was entered into or when the cause of the dispute arose, depending on which limb of the Home Building Contracts Act is engaged.
• Typlex polybutylene plumbing. A special case. Those complaints can be lodged up to 15 years after practical completion.

The Building Commissioner's orders

If a building service complaint is upheld, the Commissioner can make a building remedy order. It can require the builder to remedy the service as specified, pay the aggrieved person the reasonable costs of remedying it, or pay compensation for the failure.

For a contract complaint the equivalent is a home building work contract remedy order. It can restrain conduct that breaches the contract, require specified work to be done, order a party to pay an amount payable under the contract, or declare that an amount is not payable and must be repaid.

There is a hard ceiling. Without the consent of the party to be bound, the Commissioner cannot order work or payment above $100,000. Above that figure and without consent, the matter goes to the tribunal.

The State Administrative Tribunal

The State Administrative Tribunal (SAT) is the review and escalation forum. An application to review a Building Commissioner order or decision must be made within 28 days, though SAT can extend that.

SAT's power is wider than the Commissioner's. There is no monetary limit on what SAT can order against a registered building service provider. Against an unregistered person the cap is $500,000, and even that falls away where the person was doing work that required registration.

That asymmetry is the point. The unregistered operator who takes a $400,000 job in WA is not shielded by the cap.

Home Indemnity Insurance and its limits

Home Indemnity Insurance is required under the Home Building Contracts Act 1991 (WA) for residential building work valued over $20,000. The builder takes it out in the owner name before accepting any payment or starting work.

• Loss of deposit: up to $40,000.
• Completion or rectification of the work: up to $200,000, or the contract value if less.
• Cover period: the construction period plus six years from practical completion.

Here is the part that catches owners. The policy only responds on a relevant circumstance: the builder has died, disappeared or become insolvent, a corporate builder has ceased to exist or become insolvent, or the builder's registration has been cancelled by SAT or not renewed by the Building Services Board for failing the prescribed financial requirements.

A builder who is alive, solvent and simply refusing to come back and fix a leaking shower does not trigger the policy. That is exactly what the complaint process is for.

What this means in practice

Work out which complaint you are actually making before you lodge it. Diarise six years from completion on every residential job and keep the file until it expires, because your defence to a complaint in year five is the file you kept in year one. And do not expect the insurance to do the work of the complaint. In WA the insurance covers the builder disappearing. Everything else runs through the Building Commissioner and SAT.