The NSW Civil and Administrative Tribunal has highlighted in a recent case that even where owners of a property have no direct contract with a subcontractor, they will have a right to certain statutory warranties.

In the recent decision of AJ Gouros Investments Pty Ltd trading as Adelaide Concrete Polishing & Grinding Pty Ltd v Pongraz [2018] NSWSCATAP 129 a flooring contractor was engaged by a builder to polish concrete floors, but failed to complete the work properly. The owners of the property attempted to begin proceedings, claiming that they were owed warranties under s18B of the Home Building Act 1989, but the flooring contractor claimed they were barred from doing so as his contract was with the builder, not the owners.

However s18D(1A) of the Home Building Act states that a person who is a non-contracting owner is entitled to the same statutory warranties as a party to the contract. Therefore the court ultimately decided that the owners in this case fit into the definition of a non-contracting owner, and were entitled to the statutory warranties. This is an important reminder that the Home Building Act will create obligations even where there is no contract, and so subcontractors seeking to avoid direct liability to owners may need to seek assurances from their head contractors.

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