9 September 2026
It’s a question we’re hearing a lot in the Illawarra at the moment, and it deserves a plain answer.
The short version: the defects survive, and so do most of the legal rights that attach to them. What changes is who has to drive the fix. Before a collapse, owners can at least chase the developer. After it, administrators or receivers are running what’s left of the company for its creditors, not for your building. Nobody from their office is going to ring your committee with a plan. Whatever happens next happens because someone on the owners’ side makes it happen.
Here’s what survives, what doesn’t, and what a committee should actually do.
The rights that survive a collapse
Statutory warranties. Every residential building contract in NSW carries warranties implied by section 18B of the Home Building Act 1989: the work is done with due care and skill, materials are good and suitable, the work complies with the law. Those warranties attach to the work, not to the health of the company, and the owners corporation can enforce them for defects in the common property. The time limits matter: six years for a major defect, two years for anything else, and the clock runs from completion of the work (sections 18B and 18E, Home Building Act 1989).
The honest caveat: a warranty claim against a company in liquidation usually joins the queue of unsecured creditors, which is a long queue for a short blanket. That’s why the next three matter more than most owners realise.
The duty of care that reaches past the company. Since 2020, everyone who carries out construction work on a building like yours, and that can include designers, engineers, project managers and others, not just the builder, owes a duty of care to the owners corporation for economic loss caused by defects (section 37, Design and Building Practitioners Act 2020). The developer’s collapse does not erase the other parties in the chain. Working out who else was involved in your building is often where a real remedy lives.
Insurance, for some buildings. The Home Building Compensation Fund exists for exactly this situation: the builder is insolvent and the work is incomplete or defective (section 92, Home Building Act 1989). The catch is significant: it is generally not required for buildings over three storeys, which puts many apartment buildings outside it. If your building is three storeys or under, find the certificate. If you can’t, that’s a question for your manager this week, not eventually.
Rectification orders. Building Commission NSW can order serious defects in apartment buildings fixed, generally within ten years of completion (Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020). An order against a collapsed company can’t swing hammers. But the Commission’s inspections and orders document the defects with a rigour few owners corporations could fund themselves, and that record supports every other claim above.
What a committee should do, in order
Keep every piece of paper. Contracts, the occupation certificate, inspection reports, expert reports, correspondence, even the marketing material. Once the developer is gone, the paper trail is the asset. Nothing gets thrown out, nothing lives only in one committee member’s inbox.
Get an independent defect report early. Not the builder’s consultant, yours. The clocks above do not pause for an administration, and a report obtained in year two is worth far more than the same report in year six.
Map the parties. Developer, builder, certifier, engineer, designer are usually different entities, and the insolvent one is rarely the only one. This is where proper legal advice earns its fee, and it is cheaper early.
Put one person in the driver’s seat. Defect claims fail from drift more often than from law. Somebody, a committee member or the managing agent, holds the timeline, chases the experts, and reports back on it at every meeting until it’s done.
If you’re buying into a newer building
A strata search before you buy will show the owners corporation’s records: defect reports, orders, insurance, correspondence, and whether anyone is actually driving the issues or just minuting them. A building with documented defects and an organised response can be a better buy than a building with no paperwork at all. Silence in the records is not the same as nothing being wrong.
The question to ask
Whoever manages your scheme, the question for your next meeting is simple. Who is driving our defect claims, and when do our time limits expire? You’re entitled to a straight answer, with dates in it.
Buildings never sort themselves out. Someone drives, or nothing moves.
John Martin (JM), Founder and Managing Director, Bettr Strata
This article is general in nature and reflects our approach. It is not legal advice. For advice on your scheme’s position, speak to a construction or strata lawyer, and do it before the deadlines rather than after.