Home Building and Construction Disputes

18 September 2025 in Building and Construction Law | 9 min read | skip to FAQs

Home building and construction disputes are unfortunately common. They can include disputes involving building defects or the terms of a building contract. Home building and construction disputes can be resolved either in or outside of court. The former includes the alternative dispute resolution methods of mediation, conciliation and arbitration. The process of litigation is the process of resolving disputes in a court. There are also pieces of NSW legislation that provide for statutory relief in disputes involving building and construction defects and securing payment for building work. We also examine the Building Legislation Amendment Act 2023 (NSW) which has an impact on building legislation with the possible reduction of some building disputes. The construction lawyers at Brander Smith McKnight Lawyers are the home building and construction disputes experts.

Statutory Warranties and the Home Building Act

The Home Building Act 1989 (NSW) (HBA) provides the legislative regime for the construction of residential home and includes home warranties, how contracts are written, insurance and licensing of construction. For further information on the HBA and warranties please see our dedicated article.

A person who contracts with a builder to build a home is entitled to sue the builder a home is entitled to sue the builder pursuant to the contract for building defects. In effect a statutory warranty extends this right to the successor in title, in other words, people who subsequently own the house and did not contract with the builder. All of the statutory warranties that apply to residential buildings are contained in section 18B of the Home Building Act 1989 (NSW).

Section 18B of the Home Building Act 1989 (NSW) outlines various warranties that are implied in all contracts for the completion of residential building work. These are referred to as statutory warranties. Statutory warranties relate to things such as the quality of work completed, obligations to complete work with due diligence and within reasonable time.

There are also various provisions within the Home Building Act 1989 (NSW) that must be complied with when commencing proceedings for the breach of a statutory warranty. Construction lawyers are experienced in home building and construction disputes and can assist you in explaining these breaches and commencing legal proceedings.

How do Legal Changes in 2023 affect the HBA & Construction Disputes?

The Building Legislation Amendment Act 2023 (NSW) (BLAA) amended several existing construction related Acts, including the Home Building Act 1989 (NSW) and the Building Products (Safety) Act 2017 (NSW). It also created a regulatory body known as the NSW Building Commission which has extensive powers to investigate residential constructions. The Commission is also responsible for the regulation of laws applying to a wide range of businesses and individuals associated with the construction industry.

The aim of the legislative changes is to proactively identify defects and illegal construction problems during the building of residential works, and as a result of the identification, have them rectified prior to completion. This change aims to reduce the rate of residential building litigation and the associated expensive rectification processes required due to home building faults not being identified until the home is completed and occupied. For further information, please see our articles on the Building Legislation Amendment Act and the Building Commission.

How do these Changes in the Law effect Home Building Disputes?

1. The Building Commission is now able to investigate and enforce building regulations that cover class 1 buildings. These essentially are residential houses, townhouses and duplexes. These buildings were not previously subjected to scrutiny by an inspector or regulator.
2. This scrutiny allows for the inspector/regulator to enter, examine anything within the site, remove samples, photograph or video, seize items and request records.
3. The Building Commission also has the right to stop work, issue rectification orders and issue penalties

How do 2023 Changes in the Law to Building Product Safety affect Construction Disputes?

The Building Legislation Amendment Act 2023 (NSW) also impacted the Building Products (Safety) Act 2107 (NSW). This affects all classes of buildings. The legislative changes mean that all occupations involved in the supply chain are held responsible for safety issues concerning building products. These occupations include home builders, developers, manufacturers, financiers, importers, engineers, residential building tradespeople, design and building practitioners and certifiers. In addition, the individuals and companies in these occupations have an increased duty of care. This means that the products that they manufacture, design, import or use must comply with relevant standards, that these standards are communicated and that they act in a responsive manner when products are recalled due to problems or defects. This means that all supply chain members who interact with a problematic building product must cease supplying or using the relevant product and repair, modify, replace or refund the building product.

In addition, the Building Commissioner has greater powers in relation to building product safety. The Commission is able to issue product warnings, ban, recall, seize products and apply to the Supreme Court for orders to prohibit supply of building products that don’t comply with the National Construction Code.

Will these changes to NSW Building Legislation Reduce Building Disputes?

It is envisaged that the introduction of the Building Commission with it’s ability to both inspect and enforce regulations of class 1 buildings during the construction phase will be effective in reducing home building disputes that currently occur at the completion of the build. It is reasonable to assume that having a pro-active approach that prevents and rectifies building problems through regular inspections and compliance based activities will reduce home building disputes due to defects. The NSW government also expects that issues involving building product problems affecting all classes of buildings will be reduced by the introduction of the Building Products (Safety) Act. It is reasonable to assume that improving building product safety, through increased responsibility throughout the supply chain and tougher penalties for non-compliance, will ultimately reduce building disputes due to product defects.

In relation to building disputes due to nonpayment or the terms of a contract, these will clearly not be affected by the new construction laws.

Dispute Resolution Options in Home Building & Construction

Fair Trading Inspection

Obtaining a building inspection from Fair Trading NSW may be an effective way to resolve a dispute between a property owner and a builder relating to poor or defective work. Either party to the dispute can approach Fair Trading NSW. An inspector will assess the aspect of the building that is the subject of the dispute and discuss the issues relevant to the dispute with the parties. A Fair Trading NSW inspector can determine whether a builder should be held responsible for a building defect. If an inspector determines that a builder is responsible for a defect, they can issue a rectification order which can compel a builder to fix a defect or complete certain work. Unfortunately the rectification is not legally binding if issued by Fair Trading.

Since the creation of the NSW Building Commission, some of the roles of Fair Trading NSW have been transferred to the Commission. It is envisaged that Fair Trading will continue to assist individuals who are suffering due to building related issues, while the Commission will be the primary body in relation to inspection, compliance and both rectification and prevention of building related issues.

Informal Agreement

The simple method of directly contacting the other party can be an efficient and cost effective way of resolving the dispute without having to use a lawyer.

Alternative Dispute Resolution Options (ADR)

Mediation

Mediation is an ADR option where an independent mediator helps disputing parties settle their dispute amongst themselves. This is done by the mediator facilitating discussion between the parties and facilitating their pursuit of a mutually beneficial solution. Mediation is confidential and mediators do not take sides or make decisions in relation to your dispute. Mediation can also be a cost and time efficient way to resolve a home building and construction dispute.

Construction lawyers can provide you with legal advice to prepare for mediation and notify you of the alternative options available if an agreement is not reached.

Conciliation

Conciliation is a form of ADR where parties try to resolve a dispute through discussion. Conciliation is assisted by a conciliator, who is an independent party that can suggest options for resolving the dispute, provide the parties with relevant information and encourage the parties’ pursuit of an agreement. Conciliators do not make decisions regarding the dispute and must remain impartial throughout the process of conciliation. The building and construction lawyers at BSM are experienced in property disputes and can help you prepare for and can advocate for you during the conciliation.

Arbitration

Arbitration is an ADR process which allows disputing parties to have their dispute decided by an independent neutral party (an arbitrator). In arbitration, the disputing parties put forward arguments and evidence that the arbitrator will assess when making a decision regarding the dispute. Brander Smith McKnight law firm Sydney can prepare the case and advocate for you during arbitration. Subject to the parties prior agreement, the decision made by the arbitrator is legally binding and enforceable.

Adjudication

Adjudication is a ADR process available pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW), also known as SOPA. The adjudication process is designed to be a quick and cost-effective method of resolving home building payment disputes. This is often between sub-contractors or suppliers and the head contractor or principal. An adjudicator is appointed to examine a payment claim and provide a written decision within 10 working days. Both arbitration and adjudication typically involve legal representation for the parties.

SOPA

The Building and Construction Industry Security of Payment Act 1999 (NSW) is legislation enabling subcontractors to recover unpaid money from the head contractor and where necessary make an application for a prompt adjudication by the court. Although rapid and cost effective, it has specific time constraints and detailed requirements which must be followed. The experienced building lawyers at BSM Sydney Lawyers are very familiar with SOPA and are able to advise and represent you through this process including preparing payment claims, payment schedules and adjudication applications and defences. We can also enforce adjudications and judgements handed down by adjudicators and the court.

There have been two recent amendments in 2021 to SOPA. In March 2021 the act was amended to provide that SOPA applied to home building where the builder contracted directly with the home owner. Previously, SOPA applied when the builder contracted with the developer or parties other than the home owner. In June 2021 a further amendment was made that legislates all construction contracts over the value of $20,000 must include a SOPA guide. For more information on SOPA, please see our article on the benefits of SOPA.

Litigation

Litigation refers to the process of resolving a dispute in court. During litigation, both parties to the dispute will argue their case before an impartial judge. The judge will determine how to resolve the dispute based on the evidence presented and the legal arguments of both parties. Construction lawyers represent both property owners and members of the building industry in disputes that can’t be resolved by negotiation or other means of alternate dispute resolution.

How can a Lawyer help me?

A construction lawyer can explain the legal rights and obligations conferred by building contracts and legislation. They can identify the nature of any disputed defects and explain the legal entitlements associated with these. The construction lawyers at BSM law firm will reference and explain specific legislation that can assist in a building dispute, such as the:

1. Home Building Act 1989 (NSW)
2. Building and Construction Industry Security for Payments Act 1999 (NSW). Also known as SOPA
3. Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW)
4. Design and Building Practitioners Act 2020 (NSW)
5. Building Legislation Amendment Act 2023 (NSW)
6. Building Products (Safety) Act 2017 (NSW)

Construction lawyers can formulate legal remedies to resolve a building and construction dispute. These include specific performance, damages, injunctions and rectification orders. Even if a dispute can be resolved by negotiation, knowing your legal rights, will help hone the development of an effective negotiation strategy. The highly experienced building lawyers at BSM Sydney Lawyer have the commercial acumen to recognise and use this in the negotiation process. This can be continued throughout the litigation process with the hope of settling and saving you time and money.

How can BSM Law assist you?

Brander Smith McKnight’s construction lawyers have over three decades of experience in home building and construction disputes. Our team of lawyers resolve the vast majority of property disputes without the need for litigation using a wide range of alternative dispute resolution methods, primarily skilful negotiation.

If litigation is required, our building and construction lawyers have outstanding advocacy skills and experience in all tribunals and courts, including NCAT, the Local Court, District Court and Supreme Court. We believe in continuing negotiation with the other side even if litigation has commenced. This can save you time, money and stress. The senior building and construction lawyers at BSM Lawyer Sydney provide a free 20-minute consultation.

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BSM Lawyer Sydney have conveniently located offices in Sydney CBD, Sutherland, Parramatta, Shellharbour and Wollongong.