Diverse FMX: How to Guarantee Your Capital Works Warranty

Image: Mosaic Property Group – Liberty on Archer

Your professional Project Manager is the key to a successful warranty for your capital upgrade works.

An effective Project Manager does not just administer the Contract and “supervise” the works. They ensure the Body Corporate is delivered of a reliable warranty at the end of the project. That is to say, a warranty that the Body Corporate can use to make a successful claim upon if needed, down the track.

What is a “Warranty”?

There are two (2) common types of warranties relevant to capital upgrade works on common property: –

  • Statutory warranties
  • Voluntary warranties

These statutory and voluntary warranties apply to both the supplier [of the materials, plant and/or equipment] and the contractor [for workmanship].

What Warranty should we have?

If the project works involve any structural upgrade or change to a structural system, statutory warranties apply. The Body Corporate should be getting the following certificates at Practical Completion of the works.

  1. Practical Completion Certificate (contract document)
  2. Form 16 (QBCC Aspect Certificate)
  3. Sub-contractor’s workmanship warranty (QBCC Licensee warranty)
  4. Supplier’s product warranty (e.g. Dulux warranty for paint supply, or Rheem warranty for hot water system)
  5. Certificate of Test (for electrical works)
  6. Safe to Operate Certificate (for lift works)

Structural Upgrades

A structural upgrade would include any works associated with the following: –

  • Fire safety installations
  • Waterproof membranes and planter boxes
  • Painting
  • Lift
  • Roof
  • Curtain wall or cladding
  • Plumbing or drainage systems
  • Electrical systems
  • Mechanical, air conditioning or ventilation systems
  • Penetration of fire separating walls/ceilings
  • ETC

How long should a warranty be?

All structural works are warranted for six years + six months under the QBCC statutory builder’s warranty. This means that the QBCC licensee should provide a Form16 for these works, which gives the six year + six months warranty. A Form 16 is required for waterproofing, crack repairs, planter box repairs, etc. The Project Manager should be harvesting these statutory Form 16’s on behalf of the Body Corporate for all structural works.

A sub-contractor’s warranty is required for works that are not subject to Form 16 reporting – for example: – painting. The painter should be providing you with a workmanship warranty for the painting work. The QBCC minimum warranty for painting is 12 months, however quality painters1 will provide up to 10 years warranties on their works. A great Project Manager will only invite accredited sub-contractors to tender on works, so they can provide extended warranties to the Body Corporate. It is the Project Manager’s role to ensure these warranties are harvested and passed on to the Body Corporate prior to release of final payment for the works.

The supplier’s warranty is a voluntary product warranty offered by the supplier or manufacturer – generally applied in accordance with consumer legislation. Again, an excellent Project Manager will only include fully warranted products in their tender scope/specification, and ensure supplier warranty certificates are harvested for the best interests of the Body Corporate.

A certificate of test, or safe-to-operate certificate, or regulator certificate should be supplied for any plumbing, electrical and lift upgrade works.

Why is the Certificate of Practical Completion so important?

A qualified Project Manager will ensure that, in addition to a common commercial tendering process, a formal Contract (preferably a QBCC Contract) is entered into on behalf of the Body Corporate for capital works. A fundamental aspect of contract administration is the Practical Completion certification formality. The date of Practical Completion is the start date for all warranties. Without this date, the defect liability period cannot be calculated.

What do we do with our extended warranties?

It’s great to know that as a Body Corporate we can get a reliable [up to 10-25 year] warranty via our professional Project Manager, but how do we keep a record of all warranties for longevity and prudence? What happens when Committees change, Caretakers change and the strata manager changes?

We ask that the warranty is saved on the Reserved Issues Register and reported to Committees routinely by the strata manager. That way, the warranty information is always readily available and not “lost” or “forgotten” by subsequent stakeholders.

Author: Diverse FMX