Defects Riddle Half of Sydney Apartment Blocks


At least one in four apartment blocks built in Sydney in the decade to 2017 are likely to have at least one type of defect, but the true figure may never be know, say researchers.

According to a report published by UNSW Sydney and the University of Technology Sydney, 51 per cent of buildings with adequate documentation included in the sample had at least one type of building defect, 28 per cent at least three types of defects, and 12 per cent had more than 10 different types.

The report, which sampled more than 600 strata schemes built between 2008 and 2017, was conducted in three council areas—Sydney, Parramatta and Canterbury-Bankstown.

Lead author, UNSW Sydney senior lecturer Laura Crommelin, said the true number of defects recorded could have been much higher as the result had been masked by inadequate reporting and documentation.

“With the pressures for speed and reduced costs, and the trend towards deregulation, high-quality oversight and documentation can be among the first things to fall by the wayside,” Crommelin said.

“When you look at other types of high rise, like a big commercial building, you don't see the same endemic problems with defects because the clients are powerful—usually big companies—so they can look after their own interests and are often involved in the design and delivery of the building.

“In the apartment market you have a very significant power imbalance between the vendors—in this case developers—and the buyers, who are essentially a fragmented group of individual purchasers.”

Defects identified in sample, schemes with more robust data

Defects identified in sample, schemes with more robust data

^Source: Cracks in the Compact City: Final Report

The report found that water issues had occurred in 42 per cent of builds, cracking was found in 26 per cent and there were fire safety issues in 17 per cent.

Crommelin said the attempts to fix these issues had triggered legal action that resulted in compensation payouts of up to $14.3 million.

“Even good developments have some defects, but it’s about what they [developers] do after their discovery,” Crommelin said.

“The good developers will come back, they'll fix the problems, they want to make sure that their clients are happy because they care about their reputation.

“The real concern is the ones who do everything they can to avoid coming back to fix problems.”

The state has been working to address these issues, which were highlighted by Opal Tower at Sydney Olympic Park when cracks appeared in a 10th-floor precast concrete panel in 2018, and similar concerns at Mascot Towers in 2019.

New South Wales has also been tackling longer-running non-compliant cladding issues in buildings.

It comes as the popularity of apartment living continues to rise, lifting by 78 per cent during the past 25 years to 1.2 million dwellings.

Nearly 10 per cent of Australians are now living in a private apartment. In NSW the figure is higher, with one in five living in a private apartment.

Apartment blocks are also getting taller with almost 40 per cent of all occupied apartments in Australia now in blocks of four or more storeys, compared to less than 20 per cent in 1996.

Unlike for all other new homes, there has been no home warranty insurance available for apartment projects over three storeys across Australia for the past 18 years.
▲ Unlike for all other new homes, there has been no home warranty insurance available for apartment projects over three storeys across Australia for the past 18 years.

Crommelin said measure that needed to be introduced included developers being required to provide new owners with a comprehensive building manual, building inspections post-completion enhanced, a strengthening of the state’s Fair Trading body to respond to reports of building defects; and ensuring that pre-purchase strata reports were of a standard quality.

“During the past 20 years there hasn’t been a thorough process of collecting information about the quality of buildings, and documenting issues with buildings,” Crommelin said.

“So it’s currently almost impossible for a consumer to do proper research about what they’re buying—and this is in a system based on the idea of ‘buyer beware’.

“When you have the kind of market dynamic where the vendors have all the information, you need strong oversight to make sure that power balance doesn’t warp the way the market operates.

“You need government to step in and play that role on behalf of consumers because they can’t play it by themselves.”

To address the systemic issues, NSW building commissioner David Chandler, installed as the state’s first building commissioner in mid-2019, has been overseeing newly-enacted legislation across an industry notorious for poor oversight.

The laws follow a key recommendation of the 2018 Building Confidence Report commissioned by the country’s building ministers, for state governments to take back authority to step on to building sites and intervene where necessary.

In July, ​​the NSW government passed and enacted two new bills, the Design and Building Practitioners Bill 2020 and the Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020, enacted to empower apartment owners and hold developers accountable for their work for the first 10 years of a block’s life.

Chandler told The Urban Developer that 20 per cent of developers were currently underperforming and up for review.

He is now unveiling fresh plans to “name and shame” dodgy developers to further support unit-owners living in already completed complexes that are less than six years old and have been found to have structural faults.

Earlier this month the NSW building commissioner’s own survey of managers in strata complexes found that four in every 10 buildings had “some form of major defects” costing an average $322,000 per building to fix.

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