Limitation Period of a Building Action Starts from Issue Date of first Occupancy Permit

In the recent decision by the Victorian Supreme Court of Appeal in Lendlease Engineering Pty Ltd v Owners Corporation No 1 [2022], VSCA confirmed that the 10-year limitation period for a building action for defective building work starts as soon as the first occupancy permit is issued.

This means that an owner can only sue their contractor for alleged defective building works within 10 years to the day of the initial occupancy permit’s issue. Any claims past this date will be unsuccessful.

Key takeaways

Subcontractors should keep records of all occupancy permits for the 10-year period following their issue.
Contractors and owners need to work out the date of the first applicable occupancy permit.