Hi guys, we are building three townhouses. Was just wondering, who will be responsible for defects? I don't want buyers to be calling me for defects as it is not my area of expertise. I would assume the builder will take care of it and will have nothing to do with me? What about the after the 7 years warranty period (in VIC). Thanks.
Should be in the contract you have with the builder - the builder is responsible. As "developer" you are "just" facilitator. BUT if the buyers have no direct contractural relationship with the building it will be you, then you will need to arrange rectification by the builder
In your handover you should give buyers instructions of how and when to send maintenance requests to the builder. Also advise the builder of the new owner's details. Hopefully this will take the burden off you and they can go directly to the builder so they can contact them directly. There's always difficult people and difficult situations though!
The buyers contract with you, not the builder, therefore you may have to organise the necessary repairs and ensure they are carried out. I would imagine that you can't just wash your hands of any responsibility. Legal advice may be advisable on this issue. Marg
Isn't that the reason you should deregister the development vehicle asap after settlement? If the developer has closed down the trading entity the purchaser will need to deal with the builder. One reason not to purchase in your own name.
No, its within the same trust, your just deregistering one of your companies when the business is finished. Its common practice for liability protection. I've never had it affect finance.
Does this in effect mean that any repair action is based on good will? No developer and no contractual relationship between builder and owner?
@sydprop - the builder has a legal liability (statutory obligations under Fair Trading) which passes with title not the building contract.
