If your strata building has construction defects, you might assume the original builder has an automatic right to come back and fix them. Many builders claim exactly that. But the NSW Court of Appeal has now confirmed what experienced remedial contractors already knew: there is no such right. Your owners corporation can engage an independent builder — and in many cases, that's the more prudent decision.

Here's what the Ceerose decision means for your building's remedial works, and how to use it.

What the Court Actually Decided

In Ceerose Pty Ltd v The Owners – Strata Plan No 89074 [2025] NSWCA 235, the NSW Court of Appeal ruled unanimously that there is no automatic or "invariable" rule requiring owners to allow the original builder to return and rectify defects.

The case involved "The Eliza," a 16-storey residential apartment building in Sydney's CBD completed in 2014. The owners corporation identified significant defects and lost confidence in the builder's ability to fix them. Ceerose, the builder, argued the owners had failed to mitigate their loss by refusing to let Ceerose carry out the repairs.

The Court disagreed. Justice Rees held that the onus of proving the refusal was unreasonable sits with the builder — not the owners corporation. The owners corporation's loss of confidence in Ceerose was found to be reasonable, and the Court awarded $1.95 million (excluding GST) for the cost of engaging independent contractors to complete the remedial work.

Why This Matters for Strata Committees

Before Ceerose, many strata committees felt legally obligated to give the original builder another chance to fix defects — even when that builder had already demonstrated poor workmanship, denied defects existed, or proposed inadequate repair methods. The practical result was often a cycle of failed rectification attempts, escalating damage, and frustrated residents.

The Ceerose decision breaks that cycle. It confirms that strata committees can make a reasonable decision to engage an independent remedial contractor when they've lost confidence in the original builder. The key word is "reasonable" — and the Court has set a clear threshold for what that means.

When Is Refusal Reasonable?

The Court identified several circumstances where refusing builder access is justified. Based on the decision and our experience delivering building defect rectification across Sydney strata buildings, these include:

The builder denies the defects exist. If the original builder disputes that defects are present — despite evidence from independent building investigations — there is no reasonable basis for expecting them to fix what they won't acknowledge.

Previous rectification attempts have failed. If the builder has already attempted repairs and the defects have recurred or new ones have emerged, the owners corporation has grounds to conclude that further attempts will produce the same result.

The proposed repair methodology is inadequate. Where independent engineers have identified the correct repair methodology and the builder proposes a lesser standard, the owners corporation is justified in engaging a contractor who will follow the engineering specification.

The builder's conduct has destroyed the relationship. Unreturned communications, aggressive legal posturing, refusal to attend site meetings, or attempts to minimise scope all contribute to a reasonable loss of confidence.

The defects pose safety risks requiring urgent action. Structural defects, water ingress causing progressive damage, or fire safety failures cannot wait for protracted negotiations about who performs the repair. The owners corporation's duty under section 106 of the Strata Schemes Management Act 2015 to maintain common property in good repair takes precedence.

What Engaging an Independent Remedial Contractor Involves

This is where every legal analysis of the Ceerose decision stops — and where the real work begins. Refusing the original builder is a decision. Engaging an independent contractor is a process.

1. Independent building investigation. Before engaging any contractor, the owners corporation should commission an independent building investigation to diagnose defect types, determine root causes, and define the repair methodology. This investigation should be conducted by a structural engineer or building consultant — not by the replacement builder, and certainly not by the original builder.

2. Scope of works and engineering design. The investigation produces a detailed scope of works. For structural repairs, this requires engineering design to AS 3600. For waterproofing remediation, specification to AS 4654 and AS 3740. For facade remediation, methodology aligned to the building envelope assessment.

3. Competitive tender from registered practitioners. Under the Design and Building Practitioners Act 2020, remedial work on Class 2 buildings must be carried out by a registered building practitioner. The owners corporation should obtain at least two independent quotes for work valued over $30,000. Engaging a client-side project manager to coordinate the tender is recommended for scopes exceeding $250,000.

4. Committee approval and funding. The selected scope and contractor must be approved through the appropriate strata process — typically a general meeting resolution for work exceeding delegated authority limits. Funding comes from the capital works fund. This is where the Ceerose decision connects directly to strata capital works planning — buildings with properly funded 10-year plans can act on defects immediately rather than waiting for special levy approval.

5. Construction delivery and certification. Remedial works on occupied strata buildings require careful staging, resident communication, and coordination with ongoing building operations. The completed work must be certified by the engineer and builder, with compliance documentation lodged as required.

Protecting Your Position

The Ceerose decision strengthens the owners corporation's hand, but it doesn't eliminate the need for due diligence. To protect your position if the builder challenges the refusal:

Document everything. Keep records of all communications with the original builder, reports of failed rectification attempts, independent investigation findings, and the reasons for your decision to engage an alternative contractor.

Obtain independent expert evidence. The strength of the Ceerose owners corporation's case was built on independent expert reports that demonstrated the defects existed and the builder's proposed remediation was inadequate.

Follow proper strata process. Ensure the decision to engage an independent contractor is made through proper committee or general meeting processes, with adequate disclosure to owners.

Engage qualified practitioners. Using a registered Class 2 building practitioner for the remedial work demonstrates that the owners corporation acted prudently and sought competent replacement rather than simply refusing the builder access.

What This Means for Your Building

The Ceerose decision doesn't mean strata committees should automatically refuse builder access in every case. There are situations where allowing the original builder to rectify is the most efficient path. But it does mean that strata committees have a legally supported right to exercise judgement — and when that judgement is reasonable, the builder cannot override it.

For buildings with significant defects where confidence in the original builder has broken down, the path forward is clear: independent investigation, engineering-led scoping, competitive tender from registered practitioners, and professional remedial delivery.

Atomic Projects is a Class 2 registered building practitioner delivering building defect rectification, structural repair, waterproofing, and facade remediation across Sydney strata buildings. If your owners corporation is navigating a defect dispute and considering an independent remedial contractor, we can assess your building and provide a clear scope for the work ahead.

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