Two NSW Developers Face Court Over Building Defects

The NSW Building Commission this week signalled its intention to come down hard on developers that do not comply with work rectification orders. 

The commission announced that it had launched two prosecutions this year against developers and their directors for non-compliance with a Building Work Rectification Order.

Between January and November this year the Building Commission issued 32 rectification orders, which are generally aimed at developers of larger buildings apartment blocks and those with serious building defects.

Around 45 per cent of the rectification orders issued were revoked or complied with, the commission said.

But the commission said it was “actively considering” enforcement action against 30 unnamed developers for rectification order non-compliance.

NSW Building Commissioner James Sherrard said the aim was to work constructively with developers and builders.
  
“But where a developer or builder disengages from the process, refuses to comply with these orders or ignores them, we will use the full range of our powers to ensure they are enforced,” Sherrard said. 

He said the regulatory actions should be a “wake-up call” to developers.

“Work with us towards compliance or face disciplinary action, legal proceedings and fines,” Sherrard said.

The two prosecutions have been launched with the NSW Land and Environment Court by the Building Commission.

The first was launched in June against Ross Kenna Developments Pty Ltd and its eponymous director for failing to fix defective work identified in a rectification order for a property at Caringbah. 

The development at 177 Burraneer Bay Road at Caringbah South comprised five townhouses. Its plans were approved by the Sutherland Shire Council in 2014. 

▲ Early plans for the townhouse development at Caringbah South.

The Building Commission inspected the development in 2022. A rectification order made in 2023 outlined insufficient waterproofing in entryways, garages and car parks. 

The commission officer also highlighted a lack of suitable firefighting equipment and a lack of overflow drainage measures on balconies. 

The developer was given 60 days to rectify the issues, with the commission acknowledging that the order required “considerable further construction work that is likely to be costly” but the developer did not rectify the issues.

Meanwhile, in October, Nutek Investments Pty Ltd and its director Nicholas Kalantzis faced proceedings for failing to fix defective work identified in a rectification order for a property at Beecroft. 

The project at 68 Beecroft Road was found in November 2023 to have serious defects including insufficient waterproofing specifically in the electrical switch room, lack of access to external fire hydrants and lack of fire-stopping measures between building elements. 

The project, seven independent seniors living units, was approved to begin work in 2019.

The commission also announced that it had in October made its first disciplinary decision against a builder for non-compliance—a decision against Alta Vale Pty Ltd over its failure to fix defects at a development at Waterloo, 5km from the CBD.

The project at 291 George Street was an adaptive reuse project including a five-storey apartment building. 

▲ The plans for 291 George Street submitted in 2015 outlined 19 apartments in a block behind the heritage-listed Duke of Wellington pub.

Alta Vale was accused at a disciplinary hearing of breaching a statutory warrant by failing to undertake building work with due care and skill to ensure compliance with the law, and received a $50,000 fine. 

Building Commission NSW also issued Alta Vale director Thomas Cull with a $40,000 fine and cancelled his licences from May 1, 2026.

It was also barred from entering into new contracts until the rectification order was complied with and prepared monthly reports on steps taken to comply with the order. 

Alta Vale is seeking an internal review and can challenge the disciplinary action at the NSW Civil and Administrative Tribunal. 

As well as the Building Work Rectification Order, the commission has issued 237 rectification orders aimed at builders of smaller projects such as standalone homes in NSW between January and November this year, and 29 rectification orders were made for apartment buildings.

Of those, almost 70 per cent had been complied with. 

But Building Commission NSW is also “actively considering enforcement action” against 30 unnamed developers for non-compliance with Building Work Rectification Orders.

“We have worked hard to crack down on irresponsible operators, raise standards, and rebuild consumer confidence in the building sector,” a Building Commission NSW spokesperson said. 

Former NSW Building Commissioner David Chandler said bringing the prosecutions into the light of day provided “important visibility”. 

“The public need to see proactive regulation like orders, followed by prosecutions of those that do not comply,” Chandler told The Urban Developer. 

▲ Former NSW premier Gladys Berejiklian appointed David Chandler as the first NSW building commissioner in April 2019.

​​“The continuous stream of named and shamed players was an essential starting point in turning around what was a dire state of mistrust in developers of off-the-plan apartments.

“The result is a growing appreciation of what trustworthiness looks like supported by the uptake of market led products like iCIRT and LDI/DLI 10-year warranty insurance, and I am very enthused by the growing numbers of projects where developers and builders have their trust credentials on display.

“You need both tough, visible enforcement and you need the privileges that come with trust.”