WHO IS RESPONSIBLE FOR LATENT DEFECTS?

Who Is Responsible for Latent Defects?

Who Is Responsible for Latent Defects?

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Latent defects can create headaches for owners and developers long after a building is completed. So, who is responsible for latent defects? The answer involves legal liability, insurance, and quality control.



Definition


Latent defects are flaws in construction not visible during inspection. They might appear months or years after completion.

Responsibility Timeline



  • Builders/Contractors: Typically liable for 6–10 years under Australian law.

  • Developers: May bear responsibility if defect occurred during project management.

  • Engineers/Architects: Responsible if flaw arises from poor design.


Legal Framework


In NSW, builders must comply with the Home Building Act. Statutory warranties apply for major defects up to six years. Litigation may be required unless Latent Defects Insurance (LDI) is in place.

Benefits of LDI


Latent Defects Insurance shifts financial risk from the builder/developer to an insurer. HMD helps clients arrange LDI at construction stage for complete peace of mind.

Conclusion


When considering who is responsible for latent defects, legal liability usually points to builders or developers. But the best solution is proactive cover—via LDI.





 

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