You discover water damage in your apartment. The builder says your claim is out of time. You thought you had 10 years from when the building was completed. The builder says the clock started ticking years earlier. Who is right?

A 2022 Victorian Supreme Court of Appeal decision clarified exactly when the 10-year limitation period begins under construction law, and the answer affects anyone buying, building, or renovating property in Australia. Getting a proper building contract review before you sign can help you understand these timing issues and protect your position.

The Basic Rule: 10 Years From What?

Under section 134 of the Building Act 1993 (Vic), you generally have 10 years to bring a claim for building defects. This is often called the "long stop period" because it sets an absolute outer limit, regardless of when you discovered the problem.

The standard limitation period under the Limitation of Actions Act 1958 (Vic) is six years for contract and tort claims. But the Building Act extends this for building work, giving owners more time to identify defects that may not appear immediately, like structural cracks or waterproofing failures.

The question that caused confusion for years: 10 years from when?

The Occupancy Permit Problem

An occupancy permit confirms a building meets National Construction Code standards and is suitable for occupation. You cannot lawfully occupy a new building without one.

For a simple house, this is straightforward. One permit, one date, one starting point for the 10-year period.

Apartment buildings and staged developments are different. A developer might receive an occupancy permit for the first 10 floors in March 2020, then another permit for floors 11-20 in September 2020, and a final permit for common areas in February 2021. Which date starts the clock?

Before 2022, many practitioners assumed the 10-year period ran from the last occupancy permit. This interpretation seemed logical. The building was not truly "complete" until that final permit issued.

What the Court Actually Decided

The Lendlease Engineering case involved the Chevron Apartments in St Kilda. The owners corporation brought a claim for defective building work. The builder argued the claim was out of time.

The Victorian Supreme Court of Appeal ruled that the 10-year period starts from the date of the first occupancy permit for the relevant building work, not the last permit issued for the project.

The court's reasoning focused on the actual wording of section 134. The legislation does not use terms like "final," "last," or "current" when referring to occupancy permits. An ordinary reading of the section points to the permit issued for the specific work in question.

The court also found no evidence that Parliament intended subsequent permits to restart the limitation clock. Each permit relates to specific building work, and the limitation period for that work begins when that particular permit issues.

Practical Consequences for Owners

Say you buy an apartment in a staged development. The occupancy permit for your floor issued in 2016. The final occupancy permit for the building's common areas issued in 2019.

Under the pre-2022 understanding, you might have thought you had until 2029 to claim for defects in your apartment. Under the court's interpretation, your deadline was 2026, three years earlier than expected.

This distinction matters because many building defects appear gradually. Water ingress, concrete spalling, structural movement. These problems often take years to become visible. By the time you notice them, your limitation period may have already expired.

The financial impact can be severe. Rectifying waterproofing defects in an apartment building commonly runs into hundreds of thousands of dollars. If the limitation period has passed, the owners corporation bears that cost directly.

What a Building Contract Review Should Cover

Understanding limitation periods is one reason to get professional advice before signing a domestic building contract. A proper review should identify:

  • The warranty periods specified in your contract and how they interact with statutory limitation periods
  • Whether the contract attempts to limit or exclude warranties (which may be void under the Domestic Building Contracts Act 1995)
  • Inspection rights and defect notification procedures
  • Insurance requirements, including domestic building insurance for projects over certain values
  • Dispute resolution mechanisms and their time limits

The domestic building contract legislation across Australian states aims to protect consumers, but the protections only work if you understand them and enforce them within the applicable time limits.

Off-the-Plan Purchases: Extra Caution Required

Buyers of off-the-plan apartments face particular risks. You may settle on your property months or years after the occupancy permit for your level issued. Your 10-year limitation period has already been running while you waited for settlement.

If you buy an existing apartment in a building that was completed eight years ago, you may have only two years to identify and claim for any defects covered by the statutory warranties. That is a narrow window for problems that may not yet be visible.

Before purchasing, request copies of all occupancy permits for the building. This tells you exactly when your limitation periods started and how much time remains.

Staged Developments and Common Property

The limitation period question becomes more complex for common property in staged developments.

If the car park received its occupancy permit in 2017 but the pool area received a separate permit in 2020, defects in each area have different limitation periods. An owners corporation needs to track multiple dates for different parts of the building.

Building managers and strata committees should maintain a register of all occupancy permits and their dates. This helps ensure claims are brought within time and assists with budgeting for potential rectification works if limitation periods are approaching.

Documentation Matters

The NSW government's review of building industry governance identified poor documentation as a recurring problem in construction disputes. Owners who cannot prove when work was completed or when permits issued face difficulty establishing whether their claims are within time.

Keep copies of:

  • Your building contract and all variations
  • All occupancy permits and certificates of final inspection
  • Progress photos dated throughout construction
  • Correspondence with your builder about defects
  • Reports from building inspectors or engineers

If you are buying an established property, request these documents from the vendor. Their absence might indicate problems worth investigating before settlement.

Getting Advice Early

The 10-year limitation period seems generous until you realise how quickly it passes. A defect that appears in year nine gives you limited time to investigate, obtain expert reports, attempt resolution with the builder, and commence proceedings if necessary.

If you are signing a building contract, reviewing the terms before you commit helps you understand your rights and the timeframes that apply. If you are buying property, knowing the relevant limitation dates helps you assess risk and price your offer accordingly.

This information is general in nature. Contact us for advice specific to your situation.