A new build rental can still have defects. In South Australia, you can claim against the builder under statutory warranties for up to five years after completion. You also owe your tenant a property in a reasonable state of repair from day one, whether or not the builder has fixed the problem yet. The safe approach is to inspect before the tenancy starts, document everything in writing, notify the builder early and keep the tenant's repair requests moving in parallel.
This guide is written for Adelaide landlords and investors, including interstate and overseas owners who rely on an agent to be their eyes on the ground.
TL;DR
- South Australian statutory warranties apply to domestic building work and can be claimed for up to five years after completion.
- Your duty to your tenant is separate from your claim against the builder. A tenant can take unrepaired defects to SACAT.
- Inspect and photograph the home before the first tenant moves in, and lodge defects with the builder in writing.
- Keep a dated defect register. Late or undocumented claims are the most common way owners lose leverage.
- A professional manager can run routine inspections and trade coordination so defects are caught while the warranty is still live.
Table of Contents
- What counts as a defect in a new build
- Defects landlords most often meet in new rentals
- Your two obligations: the builder and the tenant
- How long you have to claim in South Australia
- Before the first tenant: a pre-tenancy inspection
- Reporting defects to the builder
- Defects, provisional sums and contract traps
- Perspective: what we see managing Adelaide rentals
- Choosing a manager who protects your warranty position
- A defect timeline for the first five years
- FAQ
- Sources
What counts as a defect in a new build
A defect is any part of the home that fails to meet the plans, the specifications or the legal standard. That ranges from cosmetic issues, such as paint finish or a misaligned cupboard door, to structural and water-related faults.
In South Australia, the builder's statutory warranties require that work meets the plans, specifications and legal requirements, is finished in a reasonable time and uses good and suitable materials. Those warranties give you a practical yardstick. If something does not match the signed plans or fails because of poor materials or workmanship, it is a defect you can raise.
Note that other states use different terms. New South Wales, for example, separates major and minor defects with a 6-year and 2-year liability period respectively. Much of what ranks online for this topic describes the NSW system. It does not apply to an Adelaide property, so do not rely on those timeframes for a South Australian rental.
Defects landlords most often meet in new rentals
Exact patterns vary by builder and site, but these categories turn up repeatedly in new homes and apartments:
- Water ingress and waterproofing. Bathrooms, laundries, balconies and window flashings. These tend to show up after the first heavy rain or after a few weeks of showers.
- Cracking. Hairline cracks in plaster and cornices are common as a new slab and frame settle. Wider or stepped cracks in brickwork need a professional opinion.
- Roof, gutters and drainage. Pooling water, overflowing gutters or poor falls around the slab.
- Doors, windows and seals. Sticking sashes, gaps, poorly fitted locks.
- Finishes. Tiling, grout, paint, flooring joins and cabinetry.
- Services. Hot water, air conditioning, electrical fittings and smoke alarms that were installed but not properly tested.
Soil movement is a particular local issue. Many Adelaide suburbs sit on reactive clay, and footing or slab problems may appear in the first seasons as the ground dries and wets. If cracking is wide, growing or accompanied by doors that no longer close, get an engineer's or building consultant's report before assuming it is cosmetic.
Your two obligations: the builder and the tenant
This is where many investors get caught. You have a right against the builder, and a duty to the tenant. They run on separate clocks.
Under the Residential Tenancies Act 1995 (SA), a landlord must keep the premises in a reasonable state of repair. The state government's repairs and maintenance guidance says landlords and tenants share responsibility: the tenant tells the landlord what needs fixing, and the landlord must arrange it. Nothing in that duty pauses because the fault is the builder's.
If you do not act, the tenant has a path. They can apply to SACAT for an order that repairs be carried out, for compensation or to end the tenancy. Before that, the parties generally need to try to resolve the issue using a formal notice to remedy a breach.
In practice, that means:
- Fix urgent or habitability issues promptly, using your own trades if needed.
- Keep all invoices and photographs.
- Pursue the builder for the repair or reimbursement in writing.
Waiting for a builder who is slow to attend is not a defence if the tenant has no working shower or the ceiling is leaking. For more on where your duties start and stop, see our guide to landlord obligations in South Australia.
How long you have to claim in South Australia
The statutory warranties under the Building Work Contractors Act 1995 (SA) can be claimed for up to 5 years after completion. The Law Handbook notes that the warranties transfer to later owners, so a buyer of a new build is protected even though they did not sign the building contract.
Two practical points follow from that:
- The clock starts at completion, not at settlement. If you buy a home that is already a year or two old, you have less time than you think.
- Plan for early detection. A problem noticed in year four with no written record is much harder to run than one logged in month three.
There is also building indemnity insurance. The government explains that it protects owners and future owners in certain situations, such as when a builder becomes insolvent or disappears. It is a fallback, not a substitute for acting early. Confirm whether the work you own was covered, and keep the certificate with your records.
We do not give legal advice. For a significant structural or water issue, speak to a building consultant and, where a dispute is likely, a lawyer experienced in South Australian building matters.
Before the first tenant: a pre-tenancy inspection
The best moment to find defects is before anyone lives in the home. You have clean surfaces, empty rooms and no argument about who caused what.
Walk through with a checklist and photograph everything with date stamps:
| Area | What to check |
|---|---|
| Wet areas | Tile fall to the waste, grout, silicone, signs of damp on adjoining walls |
| Ceilings and walls | Cracks, stains, nail pops, uneven paint |
| Windows and doors | Operation, locks, seals, flyscreens |
| Roof space and gutters | Insulation coverage, flashings, downpipes |
| Services | Hot water, power points, lights, smoke alarms, air conditioning |
| External | Drainage, paving falls, fencing, retaining walls |
| Floors | Squeaks, gaps, lifted joins, scratches |
Also check the property against the state's minimum housing standards, because a new home that fails a basic standard is a tenancy risk as well as a building one.
A builder's final clean often leaves dust and residue that hides marks and makes inspection harder. A thorough post-construction cleaning checklist helps you get surfaces clear enough to see and record defects properly before the tenant takes possession.
Reporting defects to the builder
Good records decide most building disputes. The ACCC's guidance on the Custom Care initiative stresses that clear communication and written records are the best protection, and that acting early preserves legal rights.
A workable process:
- Write it down. Email the builder a numbered defect list with photos, locations and the date you found each item.
- Refer to the contract. Where possible, connect each item to the plans or specifications.
- Set a reasonable date. Ask for an inspection and a repair program.
- Follow up in writing. Phone calls are useful but leave no record.
- Escalate calmly. If the builder stalls, Consumer and Business Services (CBS) is the next stop, then SACAT if the dispute cannot be resolved.
- Keep the tenant informed. Tell them when trades will attend and give proper entry notice.
On that last point, entry rules matter even for defect repairs. Our guide to tenant privacy laws in SA sets out how to arrange access, and professional tenant communication keeps relationships steady while work is under way.
Defects, provisional sums and contract traps
Many defects trace back to the contract. The ACCC has warned that disputes often arise where a contract relies on provisional sums and vague variations, because the real price and quality standard are not fixed when you sign.
CBS also points out that reputation and documented recent work should weigh more heavily than the lowest quote. A very low quote may reflect an inexperienced builder or missing items, which raises the chance of defects and disputes later.
If you are building to rent, or buying off the plan, review these items:
- Which fixtures and finishes are named and which are "allowances"?
- Are site conditions, such as rock or soil, dealt with explicitly?
- What are the handover and defect-reporting steps?
- Who attends warranty calls and how fast?
CBS publishes a building, extending and renovating guide that explains how items such as excavation and footings can vary when the final scope is not yet known. Read it before you sign.
Perspective: what we see managing Adelaide rentals
We focus only on property management, not sales, and that shapes how we see new builds. Owners often assume a new home needs little attention for years. In our experience, the first months are when small faults are easiest to catch and easiest to prove.
We approach it in three layers. First, a documented condition record at the start of the tenancy. Second, routine inspections that look for early signs such as damp, cracking and failing seals, not only tenant damage. Third, a single point of contact for trades, so a defect is reported, scheduled and recorded rather than lost in an email chain.
The 24/7 owner portal matters most for interstate and overseas investors. You can see inspection findings, maintenance requests and outcomes without chasing anyone, and you have a dated trail if a claim needs to go to the builder. Our proactive maintenance scheduling approach applies directly to warranty periods: book a defect review ahead of the deadline, not after it.
Tenant quality also protects the property. A careful tenant reports faults early and keeps the home in good order. That is why we use a four-layer screening system and offer drug testing as part of our tenant selection.
— HOSO
Choosing a manager who protects your warranty position
If you want the property watched closely while the builder's warranty runs, our property management services cover routine inspections, maintenance coordination, lease administration and rent collection for Adelaide landlords. We also offer tenant screening and drug testing so that a new home goes to a tenant who will report issues and care for it. If you are weighing up a new rental, you can start with a rental appraisal.
For premium properties, our guide to luxury rental maintenance standards explains what a higher finish expectation means for upkeep. Also see our overview of Adelaide rental compliance requirements so that smoke alarms, safety checks and paperwork are in order before listing.
A defect timeline for the first five years
The warranty window is long enough to feel comfortable and short enough to miss. A simple rhythm helps:
- Handover: inspect, photograph, list defects and send them to the builder in writing.
- First three months: watch for leaks after rain, settlement cracks and doors or windows that bind. Log any tenant reports with dates.
- Months 6 to 12: a full inspection after a complete seasonal cycle. Send a second defect list.
- Years 2 to 3: check wet areas, roofing and external drainage. Reactive soils tend to show their behaviour across several seasons.
- Year 4: a final, thorough review by a building consultant if anything remains open, well before the five-year limit.
- Before any sale or refinance: gather your records so the buyer inherits a clear file, since the warranties pass on.
This timeline is a practical routine, not a legal requirement. Your contract and the Act govern your actual rights.
FAQ
How long is a builder liable for defective work in South Australia?
Domestic building work carries statutory warranties under the Building Work Contractors Act 1995 (SA), and you can claim for up to five years after completion. The warranties pass to later owners. Other states have different periods, so ignore NSW or Queensland figures for an Adelaide property.
Can a tenant take me to SACAT over a builder's defect?
Yes. The tenant's claim is against you as the landlord, not the builder. If repairs are not done, they can apply to SACAT for a repair order, compensation or termination of the tenancy, usually after a notice to remedy a breach. You then pursue the builder separately.
Should I wait for the builder before repairing something in a rental?
Not if it affects safety, habitability or the tenant's reasonable use of the home. Arrange the repair, keep invoices and photos, and claim from the builder in writing. For minor cosmetic items, a scheduled builder visit is usually fine if the tenant agrees.
Does building indemnity insurance replace the statutory warranty?
No. It is a safety net for situations such as a builder becoming insolvent or disappearing, as the government explains. While the builder is operating, you pursue them under the warranties first.
Sources
- SA.GOV.AU: Builder responsibilities
- Law Handbook: Building Work Contracts
- SA.GOV.AU: Building indemnity insurance
- SA.GOV.AU: Repairs and maintenance in private rental properties
- SACAT: Breaches
- NSW Government: Building defect complaints
- ACCC: Custom Care for home builders
- ACCC: Damages for victims of home design company and builder
- Consumer and Business Services SA
- CBS: Building, Extending and Renovating a home