Building Defects

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.

&quot;What that is telling us is that a large number of body corporates are sitting on known defects and not reporting them,&quot; he said.

Chandler said body corporates risked defects in their buildings becoming revealed in a &quot;very public way&quot; 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.

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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.&nbsp;

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.

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Minister for Better Regulation Kevin Anderson said it was part of the progression to lift confidence in residential construction.

&ldquo;Under this Government we&rsquo;ve introduced landmark legislation to shake up the industry and prevent risky players from putting substandard properties on the market,&rdquo; Mr Anderson said.

&ldquo;The new laws provide homebuyers with confidence that their new home has been designed and built in accordance with the Building Code of Australia.&nbsp;

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&rsquo;s new proactive compliance strategy to identify and resolve defects before projects are completed.&nbsp;

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&ldquo;Having the legislation in place is one thing, but enforcing it is another,&quot; Anderson said.

&quot;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.&rdquo;

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.

David 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

jchancellor-FAypfDUnLy

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

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GUEST OBSERVATION
If you own an apartment – or are thinking of buying one – the recent news about building quality <a href="https://theconversation.com/would-you-buy-a-new-apartment-building-confidence-depends-on-ending-the-blame-game-122180">has been worrying</a>. There have been evacuations at the <a href="https://theconversation.com/there-are-lessons-to-be-drawn-from-the-cracks-that-appeared-in-sydneys-opal-tower-but-they-extend-beyond-building-certification-109428">Opal</a> and <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-11-24/mascot-towers-apartment-owners-still-living-in-limbo/12911968">Mascot</a> apartment towers in Sydney, cladding fires at the <a href="https://theconversation.com/lacrosse-fire-ruling-sends-shudders-through-building-industry-consultants-and-governments-112777">Lacrosse</a> and <a href="https://theconversation.com/cladding-fire-risks-have-been-known-for-years-lives-depend-on-acting-now-with-no-more-delays-111186">Neo200</a> towers in Melbourne and the <a href="https://theconversation.com/grenfell-tower-inquiry-expert-explains-four-main-findings-and-how-emergency-services-must-improve-126163">Grenfell Tower tragedy</a> in London. While most buildings won’t have such serious defects, many do have significant problems, and owners must get these fixed so they aren’t a health and safety risk.
Even if the defect doesn’t affect their apartment, this is often the shared responsibility of all owners in the building. It’s essential they have access to good guidance on dealing with defects in strata properties – but this isn’t always easy to find. To help owners, we’ve worked with the <a href="https://nsw.strata.community/">Strata Community Association (NSW)</a> to produce a <a href="https://cityfutures.be.unsw.edu.au/research/projects/defect-rectification/">free guide to rectifying defects</a>.
<a href="https://images.theconversation.com/files/372949/original/file-20201203-23-1770psg.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/372949/original/file-20201203-23-1770psg.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="screenshot of strata defects rectification guide home page"></a> The online guide to rectifying defects takes apartment owners step by step through what they should do. <a class="source" href="https://cityfutures.be.unsw.edu.au/research/projects/defect-rectification/">City Futures Research Centre, UNSW/SCA (NSW)</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a>
This how-to guide takes current and potential owners through the steps of identifying and rectifying defects, with links to helpful resources. It includes advice on getting a defect report, whether the developer or builder might be responsible for fixing the issue, how to choose and manage building experts, and how to manage communication with owners and workers.
The guide has been developed for New South Wales, but may also be helpful if you have a strata property elsewhere in Australia.
So what key things should owners know?
Each building’s experience with defects will differ. But there are some key principles owners should always keep in mind – these underpin all the advice in our guide.
Ignorance isn’t bliss: as an owner, you are automatically a member of the <a href="https://www.fairtrading.nsw.gov.au/housing-and-property/strata-and-community-living/strata-schemes">owners corporation/body corporate</a>. This means you have a legal <a href="https://www.fairtrading.nsw.gov.au/housing-and-property/strata-and-community-living/strata-schemes/responsibilities-of-the-owners-corporation">responsibility to maintain and repair the common property</a>, including dealing with defects.
Information is power: gather all the information you can when investigating defects. For buyers, a good strata report is essential. For owners of new buildings, getting a professional defects report is particularly important. It’s worth the cost.
Focus on potential fire, waterproofing or structural issues. These defects can be hard to see but expensive to fix. They also have major impacts on health and safety.
The early bird catches the worm: you can never start looking for and dealing with defects too early. Be aware of time limits on building warranties.
In NSW, for minor defects, you have two years to start the process of getting the builder or developer to fix the defect. For major defects, you have six years. If your building is outside the warranty period, you may have to fund rectification yourself.
Sharing is caring: make sure you report defects to people who need to know. This will include your owners corporation, but also your insurer(s) and <a href="https://www.fairtrading.nsw.gov.au/help-centre/online-tools/make-a-complaint">Fair Trading</a> (especially if the defect is major).
Keeping good records is also important. Records are needed in case there are disputes and to show future buyers the building is well-maintained.
Look after yourself: dealing with defects can be financially and emotionally draining. Conflict can occur, and collective decision-making can feel very slow.
To help navigate the process, you want the best experts by your side. They include lawyers, building specialists, strata managers and project managers. And always get a second opinion if in doubt.
What else can be done to improve the situation?
While our guide will help apartment owners and buyers to work through defect issues, state and territory governments could also do more to help out owners.
Since the Opal Tower evacuation, the NSW government has <a href="https://www.fairtrading.nsw.gov.au/about-fair-trading/legislation-and-publications/changes-to-legislation/building-industry-reforms">moved to tighten building laws</a> to reduce future defects.
These legal changes are important, but they are unlikely to completely get rid of building defects. And buildings built before the new laws might still have problems down the track.
One way governments can help owners who face such issues in the future is to make it easier for them to get the information they need to deal with defects effectively and efficiently.
Currently, strata buyers and owners suffer from what economists call “<a href="https://theconversation.com/lack-of-information-on-apartment-defects-leaves-whole-market-on-shaky-footings-127007">information asymmetry</a>” – they don’t have access to all the information they need to make informed decisions about building quality. For example, developers might not give new owners all the details about how their building was built, what materials were used, or which builders and tradespeople worked on it.
Developers should be required to give owners better information, as well as taking more responsibility for fixing defects.
Owners corporations should be encouraged to keep building records on defects up-to-date and make this information available to prospective buyers and relevant authorities.
And governments should support further professionalisation of the strata and building management industries, to make sure owners have the best possible support to navigate defects issues and care for their buildings.<img src="https://counter.theconversation.com/content/150292/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/sian-thompson-301831">Sian Thompson</a>, Research Associate, City Futures Research Centre, <a href="https://theconversation.com/institutions/unsw-1414">UNSW</a>; <a href="https://theconversation.com/profiles/bill-randolph-147968">Bill Randolph</a>, Director, City Futures Research Centre, Faculty of the Built Environment, <a href="https://theconversation.com/institutions/unsw-1414">UNSW</a>; <a href="https://theconversation.com/profiles/hazel-easthope-175163">Hazel Easthope</a>, Scientia Associate Professor, City Futures Research Centre, <a href="https://theconversation.com/institutions/unsw-1414">UNSW</a>; <a href="https://theconversation.com/profiles/laura-crommelin-15376">Laura Crommelin</a>, Research Lecturer, City Futures Research Centre, <a href="https://theconversation.com/institutions/unsw-1414">UNSW</a>, and <a href="https://theconversation.com/profiles/martin-loosemore-4690">Martin Loosemore</a>, Professor of Construction Management, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/dealing-with-apartment-defects-a-how-to-guide-for-strata-owners-and-buyers-150292">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Dealing with apartment defects: a how-to guide for strata owners and buyers

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EXPERT OBSERVER
A prestige apartment building in Sydney built by a well-known developer is undergoing a second replacement of a terrace waterproof membrane five years after replacement of the first one, which had leaked from completion. The second membrane almost certainly complied with the <a href="https://ncc.abcb.gov.au/ncc-online/About" target="_blank">National Construction Code</a> (NCC) and was certified as compliant; the first one might also have complied. Yet, for 15 years, owners and tenants living under the terraces have put up with mouldy walls, carpets and ceilings because the code does not adequately control waterproofing materials and methods.
A key assumption made by governments and regulators has been that confidence will return to the market if apartments are built to meet National Construction Code requirements. As the story above shows, complying with the code alone will not be enough to fix many common defects. Public confidence will still be lacking.
In 2017, the <a href="https://www.industry.gov.au/regulations-and-standards/building-and-construction/building-ministers-forum" target="_blank">Building Ministers’ Forum</a>, the group of federal, state and territory ministers responsible for building regulation in Australia, commissioned a report from Peter Shergold and Bronwyn Weir. Their <a href="https://www.industry.gov.au/sites/default/files/July%202018/document/pdf/building_ministers_forum_expert_assessment_-_building_confidence.pdf?acsf_files_redirect" target="_blank">report said</a> there was “… diminishing public confidence that the building and construction industry can deliver compliant, safe buildings which will perform to the expected standards over the long term”.
Since then, the high-profile structural failure and <a href="https://theconversation.com/the-big-lesson-from-opal-tower-is-that-badly-built-apartments-arent-only-an-issue-for-residents-109722" target="_blank">evacuation of Opal Tower</a> on Christmas Eve 2018, the <a href="https://theconversation.com/cladding-fire-risks-have-been-known-for-years-lives-depend-on-acting-now-with-no-more-delays-111186" target="_blank">cladding fire at Neo200</a> in February 2019 and the structural failure and <a href="https://theconversation.com/buck-passing-on-apartment-building-safety-leaves-residents-at-risk-119000" target="_blank">evacuation of Mascot Towers</a> in June 2019 have kept this issue in the media spotlight. If anything, the public <a href="https://www.afr.com/news/politics/national/the-apartment-building-crisis-explained-20190716-p527k0" target="_blank">crisis of confidence</a> has deepened.
<h2>Part of the problem is the code itself</h2>
The National Construction Code originated as a minimum standard to deliver structural integrity and fire safety. It was never intended to provide effective control over all the aspects of building work that make houses or apartments liveable and durable. This might come as a surprise to many people, including those in government, but it is inherent to the “minimum standard” approach that underpins the structure and objectives of the code.
The objectives on page 9 of volume 1 of the code, which covers apartments, are instructive:
<blockquote>
1) ensure requirements have a rigorously tested rationale; and
2) effectively and proportionally address applicable issues; and
3) create benefits to society that outweigh costs; and
4) consider non-regulatory alternatives; and
5) consider the competitive effects of regulation; and
6) not be unnecessarily restrictive.
</blockquote>
In attempting to consider “competitive effects”, avoid being “restrictive” and by encouraging “non-regulatory alternatives”, including self-certification and self-regulation, the code has opened the door to an “anything goes” mentality on many fronts.
Waterproofing requirements for houses and apartments under section F of the code are clearly ineffective, for a start.
The relevant Australian Standards, <a href="https://infostore.saiglobal.com/preview/315369811573.pdf?sku=120285_SAIG_AS_AS_252122" target="_blank">AS 4654.1</a> and <a href="https://infostore.saiglobal.com/preview/315378204076.pdf?sku=120284_SAIG_AS_AS_252120" target="_blank">AS 4654.2</a>, were written with a lot of input from the building materials supply industry. The standards permit the use of unsuitable waterproofing membranes in many situations, particularly where ceramic tiles are directly bonded to an inappropriate liquid-applied membrane. As the example at the start of this article shows, this solution rarely lasts longer than four or five years and considerably less in some cases.
Rectification is expensive and inconvenient. It involves hacking up and replacing all the tiles.
In addition, every apartment building built without a step in the slab at the junction between walls and floors will probably develop leaks within a similar timeframe.
These practices are driven by the desire to save a few dollars in construction cost, not by a commitment to deliver a required standard of durability. Durability is not part of the code objectives.
<h2>How can the code be fixed?</h2>
We could improve the code in a number of simple ways:
<ol>
<li>
Class 1 (houses) and class 2 (apartments) buildings should both be in volume 2, which would be dedicated to housing intended for sale. Houses and apartments should be required to be “fit for purpose” with a clearly stated objective to provide protection to the buyer. These should include a mandatory minimum statutory warranty of seven to ten years, backed by government.
</li>
<li>
The required durability of waterproofing membranes and details for all housing, and class 2 apartments in particular, must be clearly stated. Waterproofing should be required to last at least 25 years without significant maintenance, and perhaps 40 years for buildings where access to the waterproofing element requires demolition or is fundamentally difficult. Details that are not durable, including slabs without steps at wall junctions, or terrace and balcony tiles directly bonded to liquid-applied waterproof membranes, should be banned.
</li>
<li>
The structure of an apartment should be required to last with no substantial maintenance for at least 50 to 60 years. The minimum expectation for durability for any envelope component and associated finishes on buildings over three storeys should be 25 years, and perhaps 40 years for taller buildings.
</li>
<li>
The “performance requirements” of section F of the code, “Health and Amenity”, should be expanded to ensure apartments are comfortable, economical to maintain and <a href="https://theconversation.com/dont-forget-our-future-climate-when-tightening-up-building-codes-113365" target="_blank">sustainable</a>.
</li>
</ol>
Some developers are already delivering well-designed apartment buildings that are durable and fit for purpose. They are to be commended. The <a href="https://theconversation.com/lack-of-information-on-apartment-defects-leaves-whole-market-on-shaky-footings-127007" target="_blank">problem for buyers is identifying these</a> amid a sea of dross.
For new houses and apartments, we need to ensure the National Construction Code matches community expectations on fitness for purpose and durability. This requires a return to more active and interventionist regulatory framework, including putting independent “eyes on the site” to inspect work during construction.<img src="https://counter.theconversation.com/content/126678/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/geoff-hanmer-90647" target="_blank">Geoff Hanmer</a>, Adjunct Lecturer in Architecture, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/to-restore-public-confidence-in-apartments-rewrite-australias-building-codes-126678" target="_blank">original article</a>.
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To restore public confidence in apartments, rewrite Australia’s building codes

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EXPERT OBSERVERS
The litany of <a href="https://theconversation.com/australia-has-a-new-national-construction-code-but-its-still-not-good-enough-113729" target="_blank">defects, poor building standards</a> and <a href="https://theconversation.com/ministers-fiddle-while-buildings-crack-and-burn-120592" target="_blank">regulatory failures</a> has serious implications for apartment owners, occupiers and buyers alike. Fears of a <a href="https://www.afr.com/news/politics/national/the-apartment-building-crisis-explained-20190716-p527k0" target="_blank">loss of confidence in the sector</a> have unfortunately come true. Our research suggests a lack of reliable information about building defects is a critical factor in the crisis.
About a year ago, we started a research project with <a href="https://cityfutures.be.unsw.edu.au/documents/536/defects_project_overview.pdf" target="_blank">six industry partners</a> in New South Wales entitled <a href="https://cityfutures.be.unsw.edu.au/research/projects/defects-strata/" target="_blank">Cracks in the Compact City: Tackling Defects in Multi-Unit Strata Housing</a>. The context is compact city planning policies and a rapid shift towards apartment living in Australian cities.
The urban development strategies of NSW and other states rely on higher-density cities with many more multi-unit strata title dwellings. The <a href="https://theconversation.com/its-not-just-the-building-cracks-or-cladding-sometimes-uncertainty-does-even-more-harm-120662" target="_blank">human</a> and <a href="https://theconversation.com/flammable-cladding-costs-could-approach-billions-for-building-owners-if-authorities-dither-118121" target="_blank">economic</a> impacts of the building defects crisis could undermine these strategies.
Even with our resources, obtaining data on the extent and nature of defects in NSW apartment buildings has been a challenge. Individual buyers and owners must face even greater obstacles.
This lack of access to information poses a clear challenge to the principle of “buyer beware” that underpins property sales. The imbalance it creates between buyers and sellers is a prime example of what economists call “<a href="https://en.wikipedia.org/wiki/Information_asymmetry" target="_blank">information asymmetry</a>”.
<h2>Why does this matter for the whole apartment market?</h2>
Nobel laureate George Akerlof <a href="https://www2.bc.edu/thomas-chemmanur/phdfincorp/MF891%20papers/Ackerlof%201970.pdf" target="_blank">explained</a> how the price and quality of goods traded in a market affected by information asymmetries tend to gradually reduce to the point where only lowest-cost “lemons” remain. When buyers can’t tell the difference between products of good and bad quality, they typically prefer the cheapest available. This forces higher-quality products out of the market.
Sellers can also exploit this situation to hide poor-quality products from consumers. They might even charge the same as competitors selling higher-quality products.
While some unscrupulous sellers might profit in the short term, overall profits fall for everyone as confidence and links between price and quality are undermined. Ultimately, the entire market can collapse.
The risks are highest in markets with these two features:
<ul>
<li>sellers are not rewarded for delivering information to buyers or cannot disclose it effectively</li>
<li>buyers cannot discriminate between the quality of different products, as is often the case in apartment developments.</li>
</ul>
These problems are more likely when buyers cannot easily inspect products at the time of sale – as with apartment units bought off the plan.
When a vendor sells a product to multiple buyers, again typical in apartment developments, that can multiply the impact of information asymmetries.
The buyer of a standalone house might be able to make the sale conditional on an independent inspection of the entire building. But such clauses are very difficult to negotiate in off-the-plan sales for apartments in multi-unit buildings.
It would also be too costly for each buyer to commission such an inspection. Buyers are unable to organise a joint inspection of the building until after they have settled, which greatly increases their risk. While NSW’s new <a href="https://www.fairtrading.nsw.gov.au/housing-and-property/strata-building-bond-and-inspections-scheme" target="_blank">defects bond scheme</a> does require an inspection, it happens after ownership is transferred.
The negative impacts for buyers have spill-over effects as information asymmetries mean risks are perceived to increase across the entire apartment housing sector. <a href="https://www.afr.com/property/residential/the-opal-tower-effect-sydney-high-rise-site-sales-crash-50-per-cent-20191024-p533t4" target="_blank">Negative publicity</a>, such as the <a href="https://www.news.com.au/national/stalemate-leaving-fireprone-ticking-time-bombs-around-australia/news-story/7b26701bd6a690238a98e590c7d9a76a" target="_blank">flammable cladding</a> and <a href="https://www.smh.com.au/national/we-ve-had-ceilings-collapse-sydney-s-30-million-in-defect-payouts-revealed-20190705-p524kq" target="_blank">defects</a> scandals, can cause values to fall market-wide, regardless of the quality of individual developments. At the same time, <a href="https://www.smh.com.au/politics/federal/berejiklian-calls-for-national-solution-amid-building-crisis-20190715-p527gj" target="_blank">finance and insurance costs increase</a>.
The issue persists for subsequent buyers too. Information about defects is often unavailable due to <a href="https://www.afr.com/property/residential/a-bigger-problem-than-building-defects-20190724-p52a6g" target="_blank">poor record-keeping</a> or <a href="https://cityfutures.be.unsw.edu.au/documents/424/Case_Study_Poster_-_Defects_3.pdf" target="_blank">confidentiality agreements</a>. Ironically, this adds to the information asymmetries that contributed to the problem in the first place.
<h2>What can we do about the problem?</h2>
To reduce information asymmetries, sellers and buyers tend to engage in two main types of behaviour: <a href="https://www.semanticscholar.org/paper/Job-Market-Signaling-Spence/c63c6222735629d0e232d5b2532152bf3b0880a8" target="_blank">signalling and screening</a>.
Signalling involves sellers flagging the higher quality of their products to buyers indirectly. For example, a reputable developer may use warranties and brands or quality marks, certificates and awards as a sign of their high-quality work. Buyers may well be prepared to pay more for higher-quality products that won’t cost more in the longer term.
Crucially, signalling only works if the signal is credible. At present, there are no construction-specific quality certifications and warranties, only <a href="https://www.propertyobserver.com.au/https://www.iso.org/standard/62085" target="_blank">generic standards such as the international ISO 9001: 2015</a>. And the administrative burden and costs of independent third-party certification make it unviable for many small companies. So instruments like ISO 9001 are likely of very limited value for effective signalling in the apartment sector.
The NSW Building Commissioner is supporting an industry rating system that will enable better signalling. Data mining will be used to identify risky players and <a href="https://www.theage.com.au/politics/victoria/phoenixing-in-crosshairs-amid-crackdown-on-dodgy-building-operators-20191028-p5351a" target="_blank">phoenix operators</a>. It should take effect in the apartment sector by 2021.
Screening involves buyers investing time and resources to uncover the likelihood of defects. This includes examining available records and the behaviours of sellers and their representatives. But this adds to buyers’ costs, which disadvantages them in the marketplace.
Stakeholders in the building development process should be compelled to release this information. NSW’s <a href="https://www.registrargeneral.nsw.gov.au/news/new-requirements-for-off-the-plan-contracts-from-1-december-2019" target="_blank">new law</a> on off-the-plan contract sales will increase sellers’ disclosure obligations and provide stronger protections for buyers. Importantly, sellers will have to identify material changes made during the development process at least 21 days before settlement.
A similar requirement involving an independent expert building inspection would help buyers better understand the risk of defects before they finalise their purchase.
Another positive move is the requirement in the new <a href="https://www.fairtrading.nsw.gov.au/consultation-tool/design-and-building-practitioners-bill-2019" target="_blank">Design and Building Practitioners Bill</a> for declared designs and as-built drawings to be lodged with the government. The Building Commissioner has said these will be made available on an easy-to-access platform.
This would enable buyers to check information as the development progresses, before the crucial building handover. It’s a step towards creating a “<a href="https://www.thefifthestate.com.au/columns/spinifex/new-nsw-building-legislation/" target="_blank">digital twin</a>” for everyone licensed to perform construction work, making it easier for the public to check their record.
While the devil is likely to be in the detail, the NSW government is on the right track in tackling the information asymmetry problem. However, the various information gatekeepers will still have to be persuaded – or required – to release information they have long withheld in their own interests.<img src="https://counter.theconversation.com/content/127007/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/martin-loosemore-4690" target="_blank">Martin Loosemore</a>, Professor of Construction Management, <a href="http://theconversation.com/institutions/university-of-technology-sydney-936" target="_blank">University of Technology Sydney</a>; <a href="https://theconversation.com/profiles/bill-randolph-147968" target="_blank">Bill Randolph</a>, Director, City Futures Research Centre, Faculty of the Built Environment, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>; <a href="https://theconversation.com/profiles/caitlin-buckle-399322" target="_blank">Caitlin Buckle</a>, PhD Candidate in Human Geography, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>; <a href="https://theconversation.com/profiles/hazel-easthope-175163" target="_blank">Hazel Easthope</a>, Associate Professor, City Futures Research Centre, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>, and <a href="https://theconversation.com/profiles/laura-crommelin-15376" target="_blank">Laura Crommelin</a>, Research Lecturer, City Futures Research Centre, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/lack-of-information-on-apartment-defects-leaves-whole-market-on-shaky-footings-127007" target="_blank">original article</a>.
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Lack of information on apartment defects leaves whole market on shaky footings

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Financial comparison site mozo.com.au has found new homeowners have been charged $10.5 billion in repair costs over the past decade due to poor construction standards.
Their <a href="https://mozo.com.au/home-loans/articles/property-pain-building-defects-report-2019" target="_blank">building defects report, Property Pain</a>, found owners were left battling leaks, cracks and an assortment of other issues.
The issues also found most new and newly renovated apartment and house owners surveyed were in a similar position, plagued by defects that have cost them $6,434 and $5,839 respectively.
<img src="https://www.urban.com.au/images/2019/9/2/Property%20Pain%20Infographics-Update_3-05-02.png" alt="">
Source: mozo.com.au
To deal with the issues 60% of apartment owners facing defects had to contribute to a sinking fund and 24% were forced to pay special levies to fund the repairs.
The findings come as regulators continue to grapple with the fall out over the serious safety issues plaguing apartments in Melbourne’s Southbank and Olympic Park, Erskineville, Zetland and Mascot in Sydney.
Mozo Property Expert Steve Jovcevski said: "While buying a bright and shiny new property might seem like a good idea, the reality for many Australians is one of costly repairs and years of remediation.
"While the average cost of apartment repairs was $6,434, Mozo found 4% of owners had to pay above $50,000.
"With 670,197 apartments completed in the past 10 years, Mozo estimates, buyers have had to pay out $4.3 billion on repairs."
<img src="https://www.urban.com.au/images/2019/9/2/Property%20Pain%20Infographics-Update_3-05-04.png" alt="">
Source: mozo.com.au
"Those buying houses fared slightly better on average forking out $5,839 on repairs," Jovcevski said.
"However, 32% had to pay more than $5,000. Mozo estimates that with 1,059,913 houses completed over the past decade, buyers have had to pay $6.2 billion on repairs.
"Most apartment repairs (57%) were completed in under three months but 21% had to wait up to six months and 9% are still waiting for the defects to be fixed.
"If you are still waiting to have your apartment or house repaired it’s time to act.
"With fixed building warranties across the country, once the regulated time period to claim has passed you’ll struggle to get a developer or builder to fix defects with your property."
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New home owners slugged with $10.5 billion building defects bill: Mozo

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GUEST OBSERVATION
The building defects crisis is undermining confidence in the construction industry and causing heartbreak and financial difficulty for owners and residents of affected multi-storey buildings.
A number of apartment buildings in the City of Sydney have recently made the news due to defects that, in some cases, have left them unfit for occupation due to faults that have occurred in the construction process. These include structural cracks, problems with water proofing, inadequate fire safety and soil contamination.
It is utterly irresponsible that successive state governments have allowed this to occur by removing independent certification and professional supervision of construction sites.
In 1997, as Member for Bligh in State Parliament, I was one of only two MPs to oppose changes to the Environmental Planning and Assessment Act 1979 that handed over authority to private certifiers to approve certain categories of development.
I told the NSW Parliament that self-regulation would not work, and that public interest would be put at risk by time and cost saving pressures put on private building certifiers to keep the person who pays their wages on side.
These warnings were sadly prophetic. Now the NSW Government must act urgently to reinstate independent onsite construction inspectors, and ensure engineers and similar professionals are adequately accredited.
It is essential that certification of all buildings, particularly multi-storey residential buildings, be carried out by a third party independent of the builder. This would ensure proper checks and balances to protect amenity and the environment, and address the conflict of interest that currently exists when private certifiers are being paid by the building contractor.
It is right that the NSW Government has established a Public Accountability Inquiry into the regulation of building standards, building quality and building disputes.
The City has made a <a href="https://www.parliament.nsw.gov.au/lcdocs/submissions/64615/0143%20City%20of%20Sydney.pdf" target="_blank">submission</a> (see here) to the inquiry and we look forward to seeing its recommendations for independent and professional oversight acted on as a matter of great urgency.
CLOVER MOORE is an Australian politician, She has been the Lord Mayor of the City of Sydney since 2004
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Crisis in building and construction sector: Lord Mayor Clover Moore

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The developer of an apartment block neighbouring the beleaguered Mascot Towers has disputed claims it could be to blame for the building's cracks.
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<div id="article-titan-mobile-pos1" class="advertisement">The Mascot Towers residents have been presented preliminary findings from a report into what may have caused the cracking, but the case has not been expressly pinpointed.</div>
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<div class="advertisement">A meeting that lasted nearly 5 hours was held on Thursday night, attended by more than 300 people who were evacuated on June 14 due to worsening cracking and movements that date back many years.</div>
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There had been earlier engineering advice that potentially linked the building's issues partly to Aland's next-door development called Peak Towers.
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But Aland on Friday said it was "completely confident that an independent investigation will confirm that the failures at Mascot Towers are unrelated to construction nearby."
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"We believe the comments of the building commissioner at the NSW parliamentary inquiry support Aland's contention that the problems at Mascot Towers pre-date any work undertaken by Aland."
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After visiting Mascot Towers last week, the newly appointed building commissioner David Chandler told an upper house committee that he'd not seen many building as poorly built.
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"I'm quite certain the builder didn't know how to read any construction plans because the faults that are in that building are simply someone who didn't pay any attention to them," Mr Chandler told MPs.
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A dilapidation report prepared in 2017 for Aland's pending construction found parts of the Mascot Towers complex were in "reasonable-to-poor" prior to the construction of Peak Towers.
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It noted cases of cracking, material loss, material separation and efflorescence - the deposit of white crystalline salts on concrete.
The Daily Telegraph reported Aland rejected a request for access­ from lawyers representing the Mascot owners corporation for access because it “did not demonstrate a genuine need from an engineering perspective as to why it was required”.
“The information sought could either have been obtained­ from plans and associated reports relating to Peak Towers, or bore no relevance to the access that was requested,” it said.
Legal proceedings <a href="https://www.urban.com.au/news/100080-not-us-says-aland-as-mascot-towers-crack-concerns-investigated-in-2011" target="_blank">against the adjacent ALAND-built Peak Towers building</a> are being considered after engineers were denied access to the site.  
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Aland deny any Mascot Towers culpability but refuse access to neighbours

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Residents of Sydney’s Mascot Towers won't return to their apartments until 2020.
The earliest timeline is January 2020 while the crack remediation work proceeds.
Residents of the complex’s 132 apartments were <a href="https://www.urban.com.au/news/99854-mascot-towers-residents-await-causes-of-cracking" target="_blank">evacuated in mid-June</a>.
They have since been living in <a href="https://www.urban.com.au/news/100225-mascot-towers-residents-given-temporary-accomodation-assistance-by-nsw-government" target="_blank">temporary accommodation</a>.
Engineers investigating the cause of the problems told last night's extraordinary general meeting of unit owners that some residents
The main item on the EGM agenda was vote on a special levy to pay for remediation work on the complex.
It was for the first of four stages.
The meeting voted to raise a special $7 million levy on the decade-old building which is no longer covered under warranty for major defects, which expires after six years in NSW. 
The quote from Sydney engineers Top Consulting covered fixing general defects, water­proofing and rectification work on an expansion joint and transfer beam. 
Earlier on Thursday, residents were told the NSW government has agreed to extend rental assistance for the displaced residents another six months, out to March 2020, subject to an agreed funding deed.
“The decision has been made following a meeting between the building commissioner, strata manager, building manager and engineers which has led to a more focused line of inquiry for the root cause of the issues faced by the buildings,” Better Regulation Minister Kevin Anderson said in a statement.
Legal proceedings <a href="https://www.urban.com.au/news/100080-not-us-says-aland-as-mascot-towers-crack-concerns-investigated-in-2011" target="_blank">against the adjacent ALAND-built Peak Towers building</a> are being considered after engineers were denied access to the site. 
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No return to Mascot Towers until 2020

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Bronwyn Weir, the co-author of a report on how to fix Australia's defect ridden building industry, has said she would not buy a newly built apartment.
"If I was going to be investing in an apartment, I'd buy an older one. It's common sense, isn't it? It's just logical," Bronwyn Weir told Four Corners.
"I wouldn't buy a newly built apartment. No."
Ms Weir, and the former senior public servant Peter Shergold, co-wrote the Building Confidence report commissioned by Australia's federal, state and territory building ministers.
The report was delivered in February last year.
It made 24 recommendations including a crackdown on private certification of buildings and registration of every person involved in the building process.
Finally at a meeting in July this year, the <a href="https://www.urban.com.au/news/102946-how-the-nsw-government-gutted-tougher-laws-on-non-conforming-building-products-four-corners" target="_blank">building ministers committed to implementing the reforms</a>.
But Ms Weir told Four Corners that it would not fix the legacy of decades of inaction.
"Probably the prevalence of noncompliance has been particularly bad, I would say in the last say 15 to 20 years. It's gotten worse over that period. And that means there's a lot of existing building stock that has defects in it.
"[The new reforms] won't improve existing building stock unfortunately. So there'll be legacy issues for some time and I suspect there'll be legacy issues that we're not even fully aware of yet."
Ms Weir said for those looking to buy an apartment, it was more prudent to opt for a building "that maybe is, say, five years plus [of age]".
"You would like to think that if there are major issues with that building, they'll have started to show," she said.
"So I think if people are looking at investing, there are ways to do good due diligence. Buying off the plan is a really tricky proposition at the moment."
But she hoped some better builders would give people assurances it was safe to buy "and try to salvage what has been a pretty damaging impact of these latest news stories".
Watch Sean Nicholls' investigation, Cracking Up, on Four Corners on iview.
 
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Building defects report author Bronwyn Weir wouldn't buy a newly built apartment

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New laws to police dangerous building products in NSW — also called non-conforming products — were whittled down by the NSW Cabinet.
The laws — known as chain of responsibility laws — were meant to ensure every person who used or supplied a product on a building site could be held personally responsible if it failed.
NSW showed a draft bill of its own proposed law privately to building industry groups.
It was based on recent Queensland legislation.
But when the bill entered the NSW Parliament, Four Corners reported the industry was shocked to see it had been "absolutely gutted."
"We counted up about 80 clauses that had been pulled out of the documentation," Rodger Hills, the executive officer at the Building Products Industry Council, said.
"They had taken a lot of time to incorporate all the learnings and findings from the Queensland experience and wrapped it up into a piece of legislation that was robust, it was easy to use, and it would have done its job. 
"The industry representative left that meeting very hopeful that this was something that was going to be useful and it actually worked properly."
Many of the 80 clauses pulled out of the documentation of the proposed bill were clauses around non-conforming building products.
"In fact, the definition of a non-conforming building product wasn't even in the bill," Hills said. 
"All of the clauses to do with chain of responsibility and duty of care, they were all taken out. As were all powers, the recall powers the minister had to recall defective products."
Four Corners confirmed the NSW Cabinet rejected the proposed chain of responsibility law due to concerns it would impose more red tape on the building industry, potentially slowing it down.
The NSW Minister for Innovation Kevin Anderson would not comment on Cabinet deliberations but said: "The NSW Government is currently implementing the largest reform to the building and construction industry in the history of the state."
"As part of those reforms, the Government is considering a raft of measures that will improve the transparency, accountability and quality of work within the sector," he said.
Mr Anderson said the current situation "is a collective making of industry and the need for more modernised legislation".
The 2017 Queensland laws to police dangerous building products — also called non-conforming products — included flammable cladding that was responsible for the fire spreading in the UK's Grenfell Tower.
Watch Sean Nicholls' investigation, Cracking Up, on Four Corners on iview.
 
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