If you own or buy a home in NSW, there are laws to protect you if the building turns out to be defective. One of them is the statutory duty of care under the Design and Building Practitioners Act 2020 (NSW) (DBP Act). In plain terms: builders, developers and other people who carry out “construction work” must take reasonable care to avoid causing you economic loss caused by defects – and, depending on the circumstances, you may be able to bring a claim in negligence if they don’t (Duty of Care).
It sounds great (and it is), but it wasn’t always that simple. The Duty of Care was brought into force after, among other things, an owners corporation in Chatswood took its builder to the Supreme Court of NSW for building defects.
The case was Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185, and it was taken all the way to the High Court of Australia to determine whether the builder owed the owners corporation a duty to exercise reasonable care in the construction of the building to avoid causing the owners corporation to suffer economic loss resulting from latent defects in the common property.
In a decision that would significantly reduce consumer confidence, on 8 October 2014, the High Court held that no such duty of care existed, which heavily impacted the rights that owners had against builders when it came to defects.
The statutory Duty of Care was introduced as part of reforms intended to improve consumer protection and provide greater certainty concerning liability for defective building work. The NSW Parliament described the key reform as necessary to:
- significantly improve the redress available to consumers for building defects; and
- eradicate any uncertainty that may exist in the common law that a duty is owed to the end user and in respect to liability for defective building work.
Although this isn’t an article on the Brookfield decision, it’s important that we keep in mind why the NSW Parliament established the Duty of Care in the first place – to restore consumer confidence and to provide owners with a new avenue for recourse against those who carry out “construction work”.
Is the Duty of Care changing, and if so, when?
On 4 August 2026, the NSW Parliament passed the Building (Approvals and Practitioners) Bill 2026 (NSW), which represents a major restructuring of NSW’s building regulatory framework. The Bill received royal assent on 14 August 2026, meaning that NSW’s newest building law, the Building (Approvals and Practitioners) Act 2026 (NSW) (Building Act), has just been enacted.
Although the Building Act has been enacted, it won’t formally commence until proclamation – we need to wait a little bit longer until its substantive provisions kick in. The delay appears to be tied to the fact that its supporting regulations aren’t yet ready.
The Building Act will repeal and replace the DBP Act once its substantive provisions commence. The statutory Duty of Care will be carried across into Part 8 of the Building Act, with the duty itself contained in section 179. In the second reading speech, Parliament made clear that the Building Act “reproduces the statutory duty of care established under the DBP Act” and that “whilst recent legal cases have led to much debate surrounding the existing statutory duty of care, the bill seeks to uphold the existing operation, application and interpretation of the duty”.
That said, we wouldn’t be surprised to see some further changes to the Duty of Care once the dust settles with the Building Act, given Parliament’s statement that “now is not the right time to overhaul our established duty of care system for construction”.
Despite Parliament’s suggestion that the Duty of Care remains largely unchanged, the new definition of “construction work” might change the way cases are framed against directors of companies who aren’t necessarily involved in the works.
In The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659, the Court observed that a person could be found to have carried out “construction work” under the DBP Act (and, in turn, be caught by the Duty of Care under section 37) if they were in a position where they were able to control how the work was carried out, notwithstanding that they didn’t actually exercise any control over the works.
The new definition of “construction work” under the Building Act might just change how cases are framed against those categories of persons, particularly directors of companies (builders and developers).
Practical implications
The Building Act does not abolish the statutory Duty of Care established under the DBP Act. Instead, section 179 of the Building Act largely reproduces the existing Duty of Care, meaning that builders, developers and other persons who carry out “construction work” will continue to be required to exercise reasonable care to avoid economic loss caused by defects. In practical terms, owners will continue to have a statutory avenue to pursue those responsible for defective building work, subject to the scope of the new definition of “construction work”.
The new definition of “construction work” may create a new area of uncertainty, particularly concerning the potential liability of directors and other persons who exercise, or are considered capable of exercising, control over construction work. The scope of that change will ultimately depend on how the courts interpret the Building Act once it commences.
Accordingly, all participants should not assume that the transition from the DBP Act to the Building Act is merely administrative. While the statutory Duty of Care has been carried across, the new legislative framework may change the way liability is analysed and the parties who may be exposed to claims for defective building work.
Builders
For builders, the Building Act reinforces the importance of quality assurance, documentation and supply-chain management. Subcontracting will not eliminate responsibility, and builders should maintain appropriate records concerning design decisions, inspections, products and compliance. That said, the new definition of “construction work” may affect claims against persons who are in a position to exercise substantive control over how construction work is carried out, even if they do not in fact exercise that control.
Developers
For developers, the Building Act may create particular uncertainty regarding the circumstances in which individuals involved in a development may fall within the Duty of Care. This is especially relevant to directors and other persons who may have had the ability to control how construction work was carried out, even if they did not personally perform the work.
The decision in Pafburn illustrates the potential breadth of the concept of “construction work”. The new definition under the Building Act may alter how responsibility is attributed and, consequently, how claims are framed against developers and their directors. Developers should therefore carefully review their corporate structures, contractual arrangements and respective roles in construction projects to understand where potential liability may arise.
Owners
For owners, the key practical implication is continuity. The Building Act preserves the statutory Duty of Care, providing owners with a statutory pathway to seek compensation for economic loss arising from defects caused by a failure to exercise reasonable care.
Owners therefore do not lose the protections that were introduced under the DBP Act simply because that legislation is being replaced. Where defects arise, owners should consider whether the person or entity responsible falls within the scope of the Duty of Care under section 179 and whether the relevant work falls within the new definition of “construction work”.
The Building Act may also affect the way claims are pleaded and the parties against whom proceedings are brought. Owners should therefore carefully consider the roles played by builders, developers, directors and other participants in the project when assessing potential claims.
Project Lawyers regularly advises builders, developers, owners corporations and individual lot owners in relation to defective building work and claims under the statutory Duty of Care.
If you require advice regarding the Building Act or a potential claim for defective building work, please contact our office.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
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Author: Maysaa Parrino, Alex Ostermayer & Guy Spring
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