What happens when a renovation uncovers a hidden defect

Open up an older wall, floor or roof and you are looking at decisions someone made 30, 50 or 80 years ago, under standards that no longer apply, by tradespeople whose work was never inspected the way it would be today. Finding something unexpected is not a sign the job is being run badly — it is one of the most normal things that happens in a renovation.

What typically turns up

• Asbestos. Common in sheeting, floor tiles, eaves linings and old flexible flashings in buildings constructed or renovated before the mid-1980s. Under the Work Health and Safety Regulation and SafeWork NSW requirements, removal of more than a small amount generally requires a licensed asbestos removalist, and the work has its own notification and clearance process. This is a program and cost item, not an optional extra, and a good contract allows for the possibility even if it can't price the certainty.
• Undersized or deteriorated structure. Undersized bearers and joists by today's standards, termite damage, or timber that has quietly been carrying more load than it should, often only visible once linings come off.
• Non-compliant or deteriorated wiring and plumbing. Old wiring without the protections required today, or galvanised plumbing well past its working life, found once walls are opened.
• Water damage with no visible sign. Timber framing softened by a slow leak behind tiles or cladding, often found only once the surface finish is removed — related to the junctions we cover in our building envelope post.
• No documentation for past work. Previous renovations done without approval, or not matching what plans show, which can affect both cost and, in some cases, what the current renovation is allowed to do without separate approval.

Why this is a contract issue, not just a construction issue

Whether a discovery is a minor hiccup or a serious cost dispute usually comes down to what the contract says before anyone opens a wall, not what is found inside it.

• Provisional sums and allowances. A sound contract prices known risks — like a likely need for asbestos removal in a pre-1990 building — as a provisional sum, rather than silently assuming the best case.
• A defined variation process. Under the Home Building Act, variations to a residential building contract generally need to be agreed and recorded in writing, including the cost and any delay, before the extra work proceeds. Verbal agreement to "just do it and we'll sort the cost later" is where disputes come from.
• A contingency allowance. It is reasonable to budget a contingency, commonly in the order of 10–20% depending on the age and condition of the building, on top of the quoted price for an older-building renovation. Treat a renovation quote with no contingency discussion as incomplete, not as good news.

What a good process looks like once something is found

1. Stop and assess before covering it back up. Photograph it, and if it is structural or involves hazardous material, get the right person — an engineer, a licensed asbestos assessor — to look at it before deciding what to do.
2. Price the fix as a proper variation. A scope, a cost and, where relevant, a revised program, agreed and signed before work on that item continues.
3. Check whether it changes your approval. Some discoveries change what the renovation needs to achieve — for example, triggering a current-standard upgrade to the affected area — and may need the certifier or designer to look at it again.
4. Keep the paperwork. Asbestos clearance certificates, engineer's assessments and signed variations are what you rely on later, whether that is for a future sale, an insurance question, or a dispute.

What to ask before you start

• Has an asbestos assessment been done, or is one allowed for if the building's age makes it likely?
• Does the contract include a contingency allowance, and what is it based on?
• What is the written process for pricing and approving a variation once something is found?
• Who decides whether a discovery needs the designer or certifier to be involved again?

Getting these answers before the first wall comes off is what turns a hidden defect from a dispute into a managed variation. If you are planning a renovation on an older property and want the contract and scope reviewed first, get in touch.

Sources

• Work Health and Safety Regulation 2017, NSW Legislation
• Home Building Act 1989, NSW Legislation
• SafeWork NSW – asbestos, SafeWork NSW

This article is general information, not legal or technical advice. Asbestos and structural risk vary by building and age — have the property assessed by the relevant licensed professional before and during renovation work. Full website disclaimer