Defect
Building work that doesn't meet the contract specifications, the building code, or industry standards. Defects can be cosmetic (paint, finishes), functional (windows that don't close, taps that leak), or structural (foundation cracks, roof leaks).
Definition
A defect is building work that doesn't meet the contract specifications, the building code, or accepted industry standards. Defects range from cosmetic issues (paint imperfections, scratched finishes) through functional issues (windows that won't close properly, taps that leak) to structural issues (foundation cracks, roof leaks, framing not built to code).
Why it matters
Defects determine the difference between a finished build and a finished-and-correct build. The defects liability period and the retention amount are the contractual mechanisms that exist specifically to ensure defects get rectified. Statutory warranties under each state's law extend defect protection beyond the contract for major issues, particularly structural defects.
How it works in practice
Defects fall into broad categories with different treatment:
**Minor cosmetic defects** are often dealt with as part of the snagging list at practical completion or during the defects liability period. The builder fixes them; the owner accepts; the build proceeds. These are the most common type of defect and the easiest to resolve.
**Functional defects** (work that doesn't function as intended) are also typically dealt with during the defects liability period. Windows that don't close, taps that leak, doors that bind. Owners identify them through living in the property; the builder rectifies them.
**Structural and major defects** are different. They're often hidden, may not appear for months or years, and have potentially serious consequences (water damage, foundation movement, structural failure). Statutory warranties under state law typically cover major structural defects for 6 to 7 years regardless of the defects liability period.
When the builder disputes that something is a defect, or fails to rectify within a reasonable time, the owner can escalate through their state's tribunal (VCAT, NCAT, QCAT) or through other dispute resolution channels.
Common misconceptions
A defect requires the builder to rebuild from scratch
It usually doesn't. Most defect rectification is targeted: fixing the specific issue without replacing larger sections of work. The builder is obliged to rectify defects, not to rebuild.
Anything the owner doesn't like is a defect
It isn't. Design choices the owner made and now regrets, expected wear and tear, or items that work as specified but the owner expected differently are not defects.
Defects only matter during the defects liability period
Major structural defects are covered by statutory warranties for years afterward. The defects liability period is a contractual mechanism; statutory warranties are independent statutory protection.