Defects – New Dispute Resolution Requirement in Victoria

Defects – New Dispute Resolution Requirement in Victoria

Defects – New Dispute Resolution Requirement in Victoria

This article discussing the building dispute resolution Victoria has been supplied by Deryck Walker, RMIT.

I have mentioned in a prior post that many outside of the Strata and Construction industry are unaware of the significant width and breath of the defect issues facing some new buildings (some, but not all!).

The recent fire at Grenfell in London has brought significant scrutiny to this subject. It is interesting to note that in this case some of the issues were created by retrospectively fitted exterior cladding, not a “new building” defect.

The general habit of some Strata Managers and Strata Schemes when defects are found is to “lawyer up” in order to seek rectification of defects. Depending on the builder’s response, this will go one of two ways, they will either try to rectify defects (and either succeed or fail) or they may resist requests to make good, which leaves it in the Strata Schemes court to pursue.

There is no doubt that in the interim, the lawyers are making significant monies representing the building owner. Hourly rates of $300 – $400 per hour are not uncommon with experienced corporate law firms.

The Building Legislation Amendment (Consumer Protection) Act 2016 (Vic) became effective in April 2017. The most significant addition is that building owners (read, strata schemes) are required to partake in conciliation before they can pursue a legal claim at VCAT or the Courts. Additionally, before Conciliation can commence, evidence must be produced that a fair and reasonable effort has been made to resolve the dispute.

Broadly, this seems to be logical and sensible, as ultimately some disputes relating to defects could simply be resolved by either engaging in, or improving communications between the building owner, and the builder.

Hopefully this will encourage greater rates of resolution without the need of the stress and cost of pursuing a claim via legal pathways.

Deryck Walker
RMIT

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