Overview

In Succar v Dominium Homes Pty Ltd [2026] NSWSC 1117 (Succar v Dominium), the Supreme Court of New South Wales held that five co-owners who jointly built a 10-dwelling residential project were each a “developer” under the Home Building Act 1989 (NSW) (Home Building Act). As a result, they could not claim under the home building compensation insurance policy after their builder became insolvent, and their proceedings against the insurer were dismissed. The decision is an important warning for anyone co-owning land for a multi-dwelling development, even where they intend to keep only one or two dwellings each.

Background

• In 2015, five related or closely connected individuals, the plaintiffs, became the registered proprietors of land at Rosehill, Sydney, as tenants in common, and later obtained council consent for 10 dwellings with basement parking and a proposed strata subdivision.
• They signed a deed of partition allocating the future units among themselves so that following strata registration and transfers, no one would hold an interest in more than three dwellings. Until then, all five plaintiffs would remain registered proprietors of the whole site.
• They engaged a builder in 2017, and insurance was issued under Part 6 of the Home Building Act. After a dispute, the plaintiffs terminated the contract in 2022.
• The plaintiffs obtained judgment against the builder for about $3.76 million in March 2025, but a liquidator was appointed to the builder just over two weeks later. The development remains incomplete.
• The insurer, NSW Self Insurance Corporation, declined the plaintiffs’ claim because the policy does not cover a claim by a “developer”, a term that takes its meaning from section 3A of the Home Building Act.

The Issue

Under section 3A, a person is a developer where residential building work is done on a development in which four or more of the existing or proposed dwellings “are or will be owned” by that person. Sections 3A(1)–(1A) also deems the work to be done on behalf of the landowner. The question in Succar v Dominium was whether each plaintiff was a developer, despite the deed of partition limiting each to three dwellings or fewer once the units were eventually transferred.

The Court’s Key Findings

 1.Ownership is assessed at completion of construction

Brereton J held that “will be owned” does not refer to any time in the future at large. It refers to who will own the dwellings when construction is expected to be completed, assessed objectively by reference to the legal arrangements in place when the work is done.

Here, at completion all five plaintiffs would still be registered proprietors of the whole site, and so would together own all 10 dwellings. The later strata registration and transfers did not change their status.

2. Ownership at law is enough, whatever the position in equity

The plaintiffs argued that the deed immediately partitioned the land in equity, so each beneficially owned only their allocated units. The Court did not need to decide whether that was correct. The Home Building Act defines an “owner” as a person entitled “at law or in equity”, so a legal owner and an equitable owner can both be owners. As registered proprietors, the plaintiffs would own all 10 dwellings at law, which was sufficient to make each of them a developer.

3. The result supports the Home Building Act’s consumer protection purpose

The Court accepted that the outcome “seems harsh”, given the plaintiffs’ loss from the builder’s insolvency. However, the Home Building Act also protects buyers by imposing statutory warranties on developers. If people building four or more dwellings for later sale could escape developer status, that protection would be seriously undermined. Anyone who buys a unit from these owners would have warranty rights against them as developers.

Outcome

The Court answered “yes” for each plaintiff: each was a developer and excluded from cover. The proceedings against the insurer were dismissed, and the plaintiffs face a costs order in the insurer’s favour unless they sought to be heard on costs. In practical terms, the plaintiffs hold a judgment of about $3.76 million against an insolvent builder, with no recourse to the statutory insurance.

Key Takeaways for parties involved in Residential Construction

• Co-ownership can make you a developer: If you jointly hold title to a site with four or more dwellings, you are likely to be a developer, even if you plan to keep only one or two units. The relevant arrangements are assessed when the work is done, looking forward to who will own the dwellings at expected completion.
• Private agreements may not help: A deed of partition or similar arrangement allocating units will not avoid developer status while all parties remain registered proprietors at completion.
• Do not rely on statutory insurance: Developers are excluded from home building compensation cover, so builder insolvency may therefore leave you without recourse. Assess the builder’s financial strength and consider other protections, such as security and staged payments.
• Structure early: Seek advice on title, ownership structure and timing before signing the building contract, as the test is applied to the legal arrangements in place when the work is done, looking forward to completion.
• Warranty obligations follow: As developers, co-owners may owe statutory warranties to anyone who later buys a dwelling from them.