[+] Building Commissioner Warns Developers to ‘Listen Up’

Two developers, who have narrowly avoided being named and shamed, are expecting to be slapped with expensive rectification orders as NSW Building Commissioner David Chandler’s clean up of the state’s construction industry continues. And in a social media blast, Chandler has warned industry players it is “time to listen up” or face "very significant” consequences. “One has to wonder what rock some developers and builders have been living under for the past two and a half years,” he posted on Linkedin. The audited developments identified with defective works were started almost a year after Chandler’s appointment to oversee the implementation of sweeping building law reforms. The two developers behind the projects are now feeling the wrath of the New South Wales building commissioner and his hardline approach to stopping rampant apartment development fails. “Safe to say … [they] got a serve that I hope is still ringing in their ears,” Chandler said. “Simply, this stuff is not on. “Both pleaded not to be named in this post.” However, he indicated the developers were likely to receive formal notices to rectify, which would be posted on the NSW Fair Trading website in due course. “In the interim, both will be facing very expensive rectifications of structures, external brick cladding, passive fire installations, roof access, fire door installations, and waterproofing,” Chandler said. One of the developers, he said, had been “a regular at my industry briefings and claims to have over $1 billion in current projects”. “All will now be audited,” he declared. ▲ A render of Sydney’s Opal Tower. As part of Chandler’s crusade to restore confidence in the construction sector following a spate of evacuations of defect-riddled buildings—including Sydney’s Opal Tower saga —the roll-out of a public register rating developers and builders has begun in a bid to weed out shoddy operators. “The power card [has] moved in the favor of off-the-plan apartment purchasers,” he said following the release of the first tranche of developers and builders rated as trustworthy through the industry’s new Independent Construction Industry Rating Tool (iCIRT) star-rating regime. “Consumers now have an independent measure to help them make one of their largest purchasing choices.” Technology and data company Equifax collates the register, which so far lists 19 firms that have achieved the three gold-star minimum benchmark and have agreed to share their rating publicly. Some of the high-profile names on the list include Deicorp, Helm and Platino Properties - but more developers and builders will be added to the register in coming months. The rigorous review process rates industry players from one to five stars depending on their assessed ability to deliver a reliable outcome based on criteria including if they have had judgements made against them, and if they have a sound history of paying creditors. "A rating will not be an assurance that there will be no defects in a project," Chandler said. "But they do point to entities that are most likely to be around to rectify defects if they arise. A rated entity is making an investment in their brand and the assurance they want to give to their customers." Chandler said more than 90 developers and builders had committed to being rated and a further 120 additional entities have reached out to Equifax to discuss starting the process. "Of course the flip side to this story is that the regulator will be able to dedicate more resources to auditing unrated developers and builders." The latest data from Equifax showed that in April construction insolvencies were 47 per cent higher nationally than the same period last year. Chandler said Fair Trading audits were now focusing on those players “with the most underlying risk profiles”. “These will include their builder's safety record during construction, the riskiness of their certifier, the history of directors and license holders amongst many other risk factors.” Ending his post, which included photos of building defects uncovered in the recent audits, he said: “Surely the message … must soon sink in. “For those who have not got the message, it is time to listen up. The consequences are very significant and are likely to set project players who continue to live under a rock, back in time and cost.” According to the Fair Trading orders register, Toplace Group—a Sydney developer led by Jean Nassif with a multi-billion-dollar pipeline of projects—has been slapped with three building work rectification orders in as many months. The orders were issued after compliance officers uncovered what they deemed to be “serious defects or potential defects” in two of its residential developments. The latest order issued in May against its subsidiary JKN Hills relates to inspections conducted by Fair Trading on the high-profile developer’s 378-apartment Atmosphere tower complex at Castle Hill in Sydney’s north-west. It cites problems with the installation of the external cladding as a “serious defect” along with a failure to comply with respective performance verification requirements under the building code. The order warned the failure could result in potential risks not being identified, including the possibility of panels detaching, which “may affect the structural integrity of the building”. ▲ The troubled Atmosphere tower in Castle Hill. The cladding and compliance issues were also raised as part of a previous building work rectification order issued in June 2021, when the development was also hit with a prohibition order preventing an occupation certificate being issued. Toplace has previously stated the remediation work required was "minor in nature" and would be completed "promptly". In February and April this year, building work rectification orders were also issued against a 10-storey building in Toplace’s Vicinity complex at Canterbury in the city’s south-west. Inspectors detected serious defects in the construction of load-bearing walls in the building’s basement car park, which it found “did not support a ground floor slab”. They also noted defects relating to “ponding” of water on the roof and insufficient waterproofing on external walls to prevent leaks into apartments. Toplace was contacted by The Urban Developer for comment but did not respond. Chandler recently confirmed he had extended his term as NSW building commissioner for another year. Initially appointed for a two-year term, he has already had a one-year extension in the job—with this second extension he will now stay on until September 2023. “I really was set on going fishing on September 30,” Chandler told a recent Property Council gathering. “And then I heard that a whole bunch of these guys, over here in this corner, had already ordered champagne for a party on October 1. “And I thought wouldn’t it be fun to give them a reason to put the champagne back in the cabinet.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Building Commissioner Warns Developers to ‘Listen Up’

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