Join Australia's most dynamic and respected property investment community

Liability of property developers?

Discussion in 'Legal Issues' started by Syd00, 10th Jun, 2016.

  1. Syd00

    Syd00 Member

    Joined:
    5th Jun, 2016
    Posts:
    6
    Location:
    Sydney
    What risks and legal liabilities may a property developer face when contracting with a builder to build residential apartments? Who is responsible for rectifying major defects in and after the warranty period, in situation
    A. Where the developer sells the apartments.
    B. Where the developer holds on to the apartments long term and rents them out.
    I'm basically looking for info as to what extent a developer can be sued.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,045
    Location:
    Sydney
    You will have to consider these issues when contracting. A developer could be sued easily. The developer may also be able to sue the builder.
     
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,400
    Location:
    Sydney
    The developer in B is not a developer but a property owner ?

    I would expect that the developer should seek legal advice on any building contract to ensure appropriate warranty terms and periods are in the contract. Standard builders contracts often favour the builder eg delays, damages for delays,

    What is a "major defect". I had a property built new and my structural warranty is 25 years. It clearly describes events and issues. ie cracking if defined by size of the crack. I had a pillar start to lean after 10 years. The builder was happy to remedy that, repainted and like new.