Statutory Warranties Under the Building Work Contractors Act 1995 (SA)

What it is

South Australia implies six statutory warranties into every domestic building work contract under section 32 of the Building Work Contractors Act 1995 (SA). They apply regardless of contract value, they run with the building, they cannot be excluded by contract and they are enforced through a strict 5 year proceedings limit that starts at completion of the building work.

Section 32 has been the warranty backbone since 1995. What has moved is the way South Australian courts read the limitation period, most recently in Duncan v Bert Farina Constructions Pty Ltd [2024] SASCA 67, which put the 5 year rule beyond argument.

The six warranties

Section 32 implies the following into every domestic building work contract:

• the work will be performed in a proper workmanlike manner and in accordance with the plans and specifications agreed under the contract
• materials will be good and proper
• the work will comply with all statutory requirements
• the work will be performed with reasonable diligence
• the house will be reasonably fit for habitation
• the work will be reasonably fit for any particular purpose the owner has made known and relied on the contractor's skill and judgement to achieve

Consumer and Business Services publishes the list in Form 1 "Your Building Contract: Your Rights and Obligations" that must be given to the owner as soon as possible after signing under regulation 8 and Schedule 3 of the Building Work Contractors Regulations 2011 (SA).

They apply regardless of contract value

Section 32 attaches to every domestic building work contract, not only to contracts above the section 28 written-contract threshold of $20,000. A cabinetry job for $8,000 has the same warranties as a $600,000 knock-down-rebuild. That is unusual across Australia. In Victoria the DBCA warranties attach to every domestic building contract too, but the New South Wales HBA warranties formally attach to residential building work rather than being contract-value-gated.

They run with the building

The warranties are enforceable by subsequent owners of the building as well as the original owner. That extends the practical warranty exposure well beyond the contract counterparty, particularly for spec-build and quick-flip properties.

Waivers void

Section 42 of the BWCA voids any term of a contract purporting to exclude, restrict or evade the operation of the Act. A clause purporting to shorten the section 32 period, cap warranty damages or exclude a particular warranty is unenforceable. That interacts with the Australian Consumer Law unfair contract terms regime, which reaches the same result from a different direction.

The 5 year clock is strict

Section 32(5) requires proceedings for breach of a statutory warranty to be commenced within 5 years after completion of the building work. Section 32(6) confirms that period cannot be extended by any other Act or provision.

Duncan v Bert Farina Constructions Pty Ltd [2024] SASCA 67 is now the leading authority. The owners argued that the 10 year long-stop that operates under South Australian planning legislation for general defect claims should extend the section 32 warranty period. The Court of Appeal rejected the argument. The 5 year period is a strict limitation running from completion of the building work, and the 10 year long-stop operates only as an outer cap on general defect claims.

For a builder facing a section 32 claim, the practical test is provable completion. A contract that leaves practical completion undefined leaves the builder without the limitation defence when the section 32 claim lands in year 6.

How South Australia compares

Every other state runs its statutory warranty regime on a two-tier structural versus other split. New South Wales has 6 years for major defects and 2 years for others (s 18E HBA). Queensland has 6 years for structural and 1 year for other (s 29 Sch 1B). Victoria pins to the 10 year long-stop under section 134 of the Building Act 1993. ACT runs 6 years structural and 2 years non-structural (s 88 Building Act 2004). Northern Territory runs 6 years structural and 1 year non-structural.

South Australia is the only state that uses a flat 5 year period across the board with no structural extension. That makes the completion date load-bearing in a way it is not elsewhere.