Sunday Herald & The Age
New laws bad news for apartment owners, strata
advocate says
Date September 28, 2014
Leesha McKenny, Urban Affairs Reporter
The Owners Corporation Network say that separate changes to home building legislation fail to deal with poor-quality
workmanship and erode the ability of owners to make claims about defects. Photo: Matt Bedford
Home owners will soon be left paying the price for shoddy apartments, a consumer advocacy group
warns in a scathing assessment of the state government's new building laws.
The peak body representing strata owners is urging Fair Trading Minister Matthew Mason-Cox to
change the Home Building Amendment Act before what it calls the potentially "catastrophic"
legislation comes into force on December 1.
"I guess we haven't had enough deaths yet for this to not be funny any more," said Owners
Corporation Network chairman Stephen Goddard, a strata lawyer.
The criticism comes as the state government is doing more to promote apartment living. This week it
announced new design standards that remove parking requirements in some areas – a measure it said
would make units more affordable.
But critics like the OCN say the separate changes to home building legislation fail to deal with poorquality workmanship and erode the ability of owners to make claims about defects.
"Half a trillion dollars of the national wealth is invested in strata schemes ... and for some reason
government doesn't think consumer protection in the building sector is important," Mr Goddard said.
The OCN has used a submission about regulations to be developed to accompany the new laws to
make its appeal to Mr Mason-Cox about the act, which passed through Parliament this year. OCN said
its requests to meet the minister to discuss its concerns had so far been ignored.
A key change is a new "major defect" definition. As the new act stands, this sets out that a building
would need to be uninhabitable or under threat of collapse for a problem to fall under the maximum
six-year statutory warranty period after December 1.
This potentially omits serious structural problems like fire safety or waterproofing issues, which would
otherwise only be covered for two years.
"The fact that a building is a vertical barbecue doesn't mean you have to move out, it just means you
take your life into your own hands and don't know it until the place catches alight," Mr Goddard said,
who added some owners might lose their right to claim defects even before signs of any problems
emerged.
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Apartments, where volunteer-led owners' corporations have several procedural hurdles to jump before
making a claim, are expected to be particularly affected by the new timeline.
New consumer protections that had been expected to mitigate some of the issues with the act – such as
a 2 per cent defects bond – have been tied up in delayed strata reforms.
Hazel Easthope from the University of NSW's City Futures Research Centre, the lead author of a 2012
study that found about two-thirds of the state's strata schemes had defects arising from their
construction, said this delay created a "limbo" period for home owners.
"I think people are going to be upset and disappointed when they realise that they don't have the
consumer protection they thought they should have when they buy a new property, which is possibly
the biggest and most expensive purchase they're going to make in their lives," Dr Easthope said.
A spokeswoman for Mr Mason-Cox said he "is always happy to meet with stakeholders" and the
government was looking at the definition of a defect in the regulations to accompany the new laws,
which would bring "clarity and certainty" to the home-building process.
Clearer defect definitions would "help reduce the number and complexity of disputes, savings costs for
all parties", she said, adding an "integrated package of reforms" including strata and home warranty
insurance would be introduced next year.
Urban Development Institute of Australia NSW chief executive Stephen Albin said the industry would
have preferred the strata and home-building reforms to be rolled out at the same time.
Urban Taskforce chief executive Chris Johnson said it supported the major defect definition as "a good
balance between consumers and the development industry".
Read more: http://www.smh.com.au/nsw/new-laws-bad-news-for-apartment-owners-strata-advocate-says-2014092710mxpq.html#ixzz3Efo9Mzrx
http://www.theage.com.au/nsw/new-laws-bad-news-for-apartment-owners-strata-advocate-says20140927-10mxpq.html
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