Construction Defects and Disputes in Low-Rise Residential Buildings

Abstract

Across the major cities in Australia, there has been a remarkable increase in population that has yielded a significant boom in the building construction sector. Despite the rigorous process governing building construction activities in Australia, data shows that there has been corresponding increase in noncompliant work that has led to significant latent defect cases and protracted disputes. The purpose of the research reported in this paper is to analyze the sources and effect of residential construction defects and disputes using selected defect cases between 2008 and 2018. A review of the literature yielded a list of the most recurrent defects incidences. The caseload of the Victorian Consumer and Administrative Tribunal from 1998–1999 to 2018–2019 financial years were examined to understand trends in defect dispute and types. Subsequently, we reviewed the decision transcripts of 10 selected landmark cases on defects to explore in depth the proximate causes, root causes, and triggers of defects and the impact of the disputes on parties. Findings from this research highlight the inadequacy of the current regulatory framework and confirm the importance of project monitoring and supervision of works as well as construction skills development. Recent legislative changes and trends in residential building dispute resolution are discussed. Insights from this paper will assist builders and building regulators to identify ways of minimizing defect causes and defects, thereby reducing defect-related disputes and their impact.