Many owners of the 1000 NSW buildings identified with possible non-compliant cladding won't be able to claim against their developer or builder because the two-year window to make such claims will have passed, a property lawyer says.

A change in law two years ago cut the window to make such claims from seven years, in part to reduce the risks for the statutory warranty insurance the state government underwrote.

This meant owners of buildings built under a contract agreed after 1 February, 2012 – which includes many built in the current housing boom – would not be able to claw back the costs of rectifying any non-compliant cladding. This is the view of David Bannerman, the principal of North Sydney-based Bannermans Lawyers.

'It's a significant financial risk': lawyer David Bannerman says NSW law changes give building owners less scope to recoup the cost of rectifying cladding from developers. Ryan Stuart

"For the lot owner, it's a personal safety risk, but also it's a significant financial risk because the cost of rectifying is going to be significant and the ability to recover that cost from the people who were responsible is very limited," Mr Bannerman told The Australian Financial Review on Tuesday. "From a financial point of view, it could have a significant adverse effect on the value of the investment."

NSW Minister for Innovation and Better Regulation Matt Kean late on Tuesday said that Mr Bannerman's interpretation of the law was wrong.