NSW strata owners keeping apartment faults secret as Fair Trading appoints more inspectors

The NSW apartment construction watchdog, NSW Building Commissioner David Chandler claims a large number of strata body corporate committees are not reporting defects.

It followed a survey by the NSW Fair Trading Department, and the peak body for strata managers, showing that fewer than one in five buildings with serious defects had been reported to the regulator.

"What that is telling us is that a large number of body corporates are sitting on known defects and not reporting them," he said.

Chandler said body corporates risked defects in their buildings becoming revealed in a "very public way" if they did not report them to Fair Trading.

He told the Sydney Morning Herald he believed the main reason they stayed silent was due to fears that reporting would lower the value of apartments and make them harder to sell.

NSW laws require vendors - irrespective of whether they are an existing owner or developer - to disclose serious defects to prospective purchasers in contracts of sale. 

However it is not a current legal requirement for defects to be reported to Fair Trading, a matter that Mr Chandler signalled the state government would now be looking to require.

The NSW construction watchdog was appointed to clean up the construction industry and restore public confidence after the Opal and Mascot Tower disasters.

Last month the NSW Government announced plans to recruit 30 further building inspectors and auditors to join NSW Fair Trading.

Minister for Better Regulation Kevin Anderson said it was part of the progression to lift confidence in residential construction.

“Under this Government we’ve introduced landmark legislation to shake up the industry and prevent risky players from putting substandard properties on the market,” Mr Anderson said.

“The new laws provide homebuyers with confidence that their new home has been designed and built in accordance with the Building Code of Australia. 

The 30 new inspectors and auditors will join an existing team of 30 that have been active in the field since September last year implementing Fair Trading’s new proactive compliance strategy to identify and resolve defects before projects are completed. 

“Having the legislation in place is one thing, but enforcing it is another," Anderson said.

"We want to knock out the dodgy players and make sure that customers can have confidence when they are handed the keys to their new apartments.”

The recent departmental survey of more than 500 buildings in NSW that were built in the past six years found 36 per cent had serious defects, with just 17 per cent reported to the regulator.

Around a quarter related to water leaks and moisture, 15 per cent with fire safety systems and 10 per cent had structural issues, and 6 per cent had non-compliant cladding.

A further raft of protections for apartment buyers in NSW came into effect this month including a requirement for designers, engineers and builders who work on apartment buildings to be registered.