Statutory Warranties Under the Building Act 2004 (ACT)

What it is

The Australian Capital Territory implies statutory warranties into every residential building work contract under section 88 of the Building Act 2004 (ACT). The warranties attach where the contract price is $12,000 or more and the work requires building approval. They run with the building, they cannot be waived and they carry the ACT's characteristic two-tier duration: 6 years for structural elements and 2 years for non-structural work.

Access Canberra administers the framework and the Construction Occupations Registrar issues the guidance.

The section 88 warranties

Section 88 of the Building Act 2004 (ACT) implies the following into every residential building work contract:

• the work will comply with the Building Act and the approved plans, including asbestos handling under the relevant regulations
• the work will be carried out in a proper and skilful way
• materials supplied for the work will be good and proper for their purpose
• if the contract does not specify a completion date, the work will be completed with reasonable promptness
• the completed building work will be reasonably fit for any purpose the owner has made known to the builder or that is expected in the circumstances

The Property Developers Act 2024 (ACT) added a rectification-order layer for in-scope developer projects, but the section 88 warranties themselves are the substantive obligation.

Structural versus non-structural durations

Section 88 sets a two-tier period from the day the work is completed. Structural work carries a 6 year warranty. Non-structural work carries a 2 year warranty. Access Canberra guidance treats structural elements to include foundations, floor slabs, external walls, roof structure, weatherproofing and load-bearing walls. Non-structural work is the balance: internal fitout, finishes, cabinetry, fixtures.

The completion day is the later of the day the work is completed or the day the contract ends. The warranties are enforceable by any person for the time being having an interest in the building, so they pass to successors in title as a matter of statute.

The $12,000 threshold and the 3-storey scope

Section 88 attaches where the residential building work requires building approval and the contract cost is $12,000 or more. Residential building insurance and the fidelity certificate framework track the same threshold. Insurance scope covers houses and apartment buildings up to 3 storeys, excluding car park levels.

Below $12,000 the section 88 warranties do not attach. The Australian Consumer Law consumer guarantees still apply, so ACL sections 60 to 62 (due care and skill, fit for purpose, reasonable time) do most of the same work at smaller values.

Waivers void

Section 88 says that any provision of a contract that purports to remove, restrict or limit the operation of the section is of no effect. That reaches attempts to shorten the 6 year and 2 year periods, cap warranty damages or exclude a particular warranty. It sits alongside the Australian Consumer Law unfair contract terms regime, which reaches the same result from a different direction.

Enforcement pathway

ACAT is the primary tribunal for section 88 warranty disputes under its building and construction jurisdiction. Access Canberra investigates compliance complaints and can issue rectification orders under the Construction Occupations (Licensing) Act 2004 (ACT), which reach registered builders directly.

The Property Developers Act 2024 (ACT) added rectification orders for developer-controlled residential projects. Rectification orders under that Act commenced 11 July 2024, so they apply prospectively to in-scope developer work. The section 88 warranties themselves are the older layer and continue to apply to every residential building work contract.

How the ACT compares

The ACT's two-tier structure matches New South Wales in the split but not in the numbers. NSW runs 6 years for major defects and 2 years for other defects under section 18E of the Home Building Act 1989 (NSW), with a 6 month tail. Queensland runs 6 years for structural and 1 year for other under section 29 of Schedule 1B of the QBCC Act. Northern Territory runs 6 years for structural and 1 year for non-structural. South Australia runs a flat 5 year period under section 32(5) of the BWCA. Victoria pins to the 10 year long-stop under section 134 of the Building Act 1993 (Vic).

The ACT is the only jurisdiction that runs 2 years for non-structural (rather than 1 year) alongside 6 years for structural, giving a slightly wider window for cosmetic and fitout defects.