Levies shock: the crippling cost of compliance

In the great league table of law changes and their unintended consequences, the fall out from the Design & Building Practitioners Act (DBPA), is up there with the effects of self-certification on building defects, and Airbnb on affordable rents.

Flat Chat readers have long complained about the DBPA and its inflationary effects on even the simplest renovations. Designed (in part) to ensure strata schemes weren’t saddled with defective renovations, it has also reputedly doubled or tripled the costs of basic defect remediation.

Keen Flat Chat reader and registered town planner Tracy Davey, in an article entitled When Special Levies Rise, Affordability Falls: The Unspoken Financial Shockwave in NSW Apartments, argues that ordinary apartment owners are having to pay unexpectedly high costs for little or no appreciable benefit and it’s time for a rethink to achieve a balance between.

A New Era of Regulation and Its Unintended Consequences

The Design & Building Practitioners Act (DBP Act), introduced in New South Wales in 2020, was meant to restore trust in apartment construction after a series of headline-grabbing failures, like Opal Tower and Mascot Towers. The public demanded accountability, and policymakers responded with a framework designed to lift standards, tighten oversight, and ensure qualified professionals were responsible for the designs and decisions shaping our buildings. On paper, it was a turning point.

In practice, it has delivered something far more complicated—a financial shockwave that is quietly rippling through apartment-owning communities across NSW. For many owners, the unintended consequences are becoming impossible to ignore.

The Hidden Cost of Compliance

The DBP Act ushered in a new era of regulated designs, compliance declarations, and mandatory engagement of registered practitioners. These reforms were meant to prevent defects—and in many cases, they do. But they also come with a price tag:

  • Engineering reports that once cost a few thousand dollars now routinely cost tens of thousands.
  • Remedial projects that previously required a builder and a consultant now require a suite of registered professionals, each carrying higher insurance premiums and greater liability.
  • Documentation has multiplied.
  • Quality assurance has intensified.

Every additional hour of professional time is ultimately paid for by the owners or passed on to renters. For owners’ corporations, these costs don’t sit quietly in the background. They land directly in the Capital Works fund—and when that fund can’t cope, they land in the form of special levies.

Across NSW, special levies can vary from $5,000–$80,000 plus per lot. Many of these levies are tied to remedial works reclassified under the DBP Act, triggering new compliance obligations that owners never anticipated. For some buildings, the levies arrive in waves: one for investigation, one for design, one for compliance, and one for construction. For others, the levy is so large it becomes a breaking point.

A new layer of vulnerability

The most troubling consequence of the DBP Act isn’t only the cost—it’s the vulnerability it creates. Many apartment owners are not investors with deep pockets. They are first time home buyers, retirees, single parents, and long-term residents who bought into the dream of secure, low-maintenance living.

They budgeted for manageable strata fees. They expected occasional repairs. They did not expect a regulatory shift that could suddenly require them to find tens of thousands of dollars at short notice.

For some, the choice becomes stark: pay the levy or sell the home. This is where the DBP Act’s unintended impact becomes most visible. A law designed to protect consumers is, in some cases, pushing them out of their homes.

Preofessionals aren’t the villains

It’s important to be clear, the financial pressure owners are experiencing is not the fault of engineers, strata managers, or even builders. These professionals are navigating a system that has fundamentally changed the way building work must be documented, certified, and insured.

Engineers are now carrying greater legal risk. Strata managers are administering levies they cannot avoid. Builders are working under stricter oversight. Everyone is operating within a framework that prioritises safety—but seemingly at the expense of affordability.

Balancing safety and affordability

The DBP Act has raised standards, but it has also raised barriers. The challenge now is to find a balance that protects both buildings and the people who live in them. Apartment owners across NSW are now facing a level of financial vulnerability that few anticipated. They are being asked to shoulder the cost of a regulatory system that was designed to protect them. And for some, the burden is simply too heavy.

It is time this issue is spoken about more openly with the intent of exploring practical solutions.

Special levies, once rare, are now a primary driver of the affordability crisis in NSW strata. The unintended consequences of regulation are pushing some owners to the brink, forcing difficult choices, and creating a new layer of vulnerability.

As the financial shockwave continues to ripple through apartment communities, it is essential to acknowledge the issue and seek practical solutions. Open dialogue, policy review, and targeted support for owners are needed.

If this issue resonates with you, the thread on the Flat Chat Forum is now live for your comments and questions.

Tracy Davey – Registered Town Planner (Planning Institute of Australia)

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  • #82976 Reply | Quote
    Jimmy-T
    Keymaster

      In the great league table of law changes and their unintended consequences, the fall out from the Design & Building Practitioners Act (DBPA), is u
      [See the full post at: Levies shock: the crippling cost of compliance]

      If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.
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      TD
    Viewing 13 replies - 1 through 13 (of 13 total)
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    • #82980 Reply
      chesswood
      Flatchatter

        I can see two problems with the D&BPAct. The first is that someone decided that building consultants were part of the problem and should be eliminated. So no provision was made for the registration of building consultants even though some of them had been helping strata plans for decades. The work they did had to be placed with engineers or architects who had no knowledge of particular buildings that might have been using the same consultant for ten years.

        Another problem with the Act is that it assumes that unqualified residents are incapable of making long-term decisions correctly. False – many buildings have long-term owners who well understand the issues with the building and trust the tradesmen they have used many times before. Tradies who take short cuts needn’t expect return business nor personal recommendations.

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        TD
        #82990 Reply
        TD
        Flatchatter

          Hi thanks for your feedback.

          Yes, it appears in the drafting of the DBP Act, the implication is that ‘ building consultants’ were not doing a sufficient job, hence the requirement to now have all works over $5,000 designed and managed by a ‘Building Practioner for Class 2, 3 and 9c buildings. I would assume that all builders and trades carry insurance and indemnities which is should provide a level of assurance of quality for apartment owners.

          More responsibility needs to go back to these trades and consultants.

          #82987 Reply
          UberOwner
          Flatchatter

            Let’s not forget the flow-on effect of these costs to renters, who are increasingly noisy about rent inflation. Compliance costs create upward pressure on the costs associated with investment properties, which inevitably make their way through to the cost of renting.
            Many property investors will try to absorb costs rather than increase rents and lose a good tenant. But eventually the costs reach a point where the investor has to sell or increase rents. And we talk of “investors” as if they are trying to make money out of renters. Many are not. They are making their property available for rent while they work interstate or overseas, or while they wait to sell a property that’s tied up in a deceased estate. But they can’t afford to do that if the rent doesn’t cover the expenses.

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            TD
            #82988 Reply
            Ziggy
            Flatchatter

              I totally agree with Chesswood. Our strata complex consists of two buildings, one small and one large. The large building’s roof is  double the size of the small building.

              In 2022, using a company very familiar with our buildings, we replaced all the ducting, vents etc with new ones as well as the waterproof membrane of the large building . Cost: $38,500.

              The quote for the small building, has just come in: around $200,000. Those extra costs are purely caused by the DBPA. It’s a system designed for new buildings but not older, established ones. It’s a scandal.

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              #82989 Reply
              Strata Ken
              Flatchatter

                I’d love to see $80,000, our best quote is $200,000 per lot. We are seeking more quotes.

                There are obvious problems with what is happening. We have about 40 bathrooms that have water leakage. If it was a home then we would pay about a $1,000 to use something like Megaseal or retile the shower at about $5000, and it would usually bey fix any problems.. The regulations say that the waterproofing has to be one continuous seal, so all fixtures are to be removed, all tiles removed and the sealing and retiling. This was something like $30-40k per bathroom and they aren’t big bathrooms.

                Balconies are a disaster. They are to be stripped back to concrete, checked for concrete cancer and then everything is replaced. Brick walls on balconies need to replaced, as now required to be reinforced.

                When I first read the tender, I thought the engineers response to all problems was to replace everything, but that is what they have to do.

                Anyway, many of our owners couldn’t afford to pay even $50-100k, so we are all going to be removed kicking and screaming from the building, due to an appointed strata manager. It isn’t going to be nice when eventually we have to do everything and the only choice is to sell to a developer at less than half what people have paid.

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                #83004 Reply
                Strata Ken
                Flatchatter

                  One question is whether anyone has made or is likely to make this a political issue. Does the OCN have any position on this? Or maybe the opposition? Maybe the government is getting worried? I sent an e-mail to my local member about Christmas and got a reply that they were all very busy, and nothing since. Where I am, if they checked for waterproofing problems in unit blocks it would range from a few units to we have to redo every balcony.

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                  TD
                  #83020 Reply
                  TD
                  Flatchatter

                    Hi Strata Ken

                    I do think there is a political aspect to this issue. The DBP Act was developed by the Office of the Building Commissioner, introduced into Parliament by the NSW Minister for Better Regulation and passed by the NSW Parliament on the 10 June 2020. There are proposed amendments to the Act due this year, 1 July 2026.

                    The bodies which have the most influence however, are Engineers Australia (EA), the Strata Community Association) (SCA  NSW),  – it might be possible to access them via your Strata Managers, Owners Corporation Network (OCN) and put forward suggestions.

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                    #83036 Reply
                    rembren
                    Flatchatter

                      Hi Folks,

                      The steep increase in the cost of remedial works doesn’t just result from the introduction of the DB& P Act, it is a combined result of the Home Building Act, in particular the imposition of HBCF insurance at a staggering cost, the RAB Act and it’s introduction of a 10 year duty of care, and yes, the design and documentation requirements of the DB & P Act and, to top it all, as remedial builders we are now forced to interact with the NSW Governments Planning Portal. A more dysfunctional and opaque system has yet to be developed.

                      As an engineer and project manager I once enjoyed my work, planning and executing complex remedial projects on sick buildings but now my days are spent battling through the cluster of complicated bureaucratic creations.

                      But wait, the situation is about to become far worse as the new NCC 2025 comes into being with its new waterproofing provisions that will be impossible, or at the very least highly costly, to implement on existing buildings.

                      Perhaps, way back when, the focus could have been on better educating tradesmen, builders and designers through an enhanced and well-funded system of technical colleges (TAFE?), instilling a sense of pride in their work, and ensuring our seats of higher learning turn out design professionals that understand how buildings work and fit together to fulfil their basic functions. Provide that better educated workforce with clear and concise technical guidelines provided through a re-written NCC and set of Australian Standards and just perhaps the cluster of complicated bureaucratic creations could have been avoided.

                       

                       

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                      #83038 Reply
                      Quirky
                      Flatchatter

                        Another critical issue is that the engineer or architect who under the DB&P Act has overall responsibility for the project has to guarantee the outcome for 10 years. If a large strata building gets its windows replaced (say) and the DB&P law applies, the window company only guarantees the outcome for 6 years. Therefore the engineer or architect has to carry the risk that the new windows will have problems for the final 4 years. So they over-engineer the project – to minimise the risk that they will liable to repairing the failed water-proofing (say) 8 years after the project is completed. The resulting new windows will be very high quality, but will obviously cost a high amount to achieve this outcome, or more than may be needed and sensible!

                        #83040 Reply
                        sleepless in strata
                        Flatchatter

                          My take on the DBP and the sleeper issue Fire Compliance!

                          • For existing strata buildings — particularly older, smaller schemes — the consequences of DBP are significant and likely largely unintended, however that does not ease the pain!
                          • The Act operates alongside the Environmental Planning and Assessment Act 1979.
                            The threshold question is whether works require development consent. If they do, DBP obligations may follow.
                            Owners corporations have rarely had to interact with planning law or planners — this is unfamiliar territory for both volunteer committees and strata managers.
                            In practice, confusion is rife. Roofers are advising that routine roof repair works are automatically subject to DBP requirements, when in many cases the first and critical question is whether planning consent is required at all. The result is paralysis and delayed maintenance.
                          • Many 1960s–1980s buildings must have major structural elements renewed if they are to last another 40–50 years — balconies, concrete, roofing, waterproofing and services. This is essential renewal to preserve housing stock.
                          • If renewal is delayed due to compliance cost and uncertainty, buildings risk sliding into “fire sale” territory — and we are already seeing this dynamic emerge in the context of fire compliance on well-located sites, where financial distress creates acquisition opportunities.
                          • Most strata schemes were never funded for today’s construction pricing let alone the added costs of DBP compliance and implementing new fire standards in older buildings once major works trigger planning and DA approvals.
                            Capital works funds are insufficient. Special levies are now common — and often substantial & I cannot see this changing.
                          • For many residents in older walk-ups, typically the affordable end of the market, the financial burden is overwhelming. Compliance intended to make buildings safer is, in practice, forcing owners to sell. Usually the more vulnerable & elderly – the irony is inescapable.
                          • The objective was stronger buildings. But a one-size-fits-all regulatory approach is not working. Without a proportionate, risk-based framework for existing strata schemes, compliance costs risk destabilising the very communities the legislation seeks to protect.
                          1 user thanked author for this post.
                          TD
                          #83041 Reply
                          ruben
                          Flatchatter

                            As an example, our strata complex is 35 years old and has 35 units. One of the units has a tiled terrace that is about 40sqm. Around two years ago, water appeared to be leaking into the ceiling of the unit underneath. We asked our consulting engineering firm for a brief on how best to deal with the apparent leak. The cost came in at a projected $120K to lift all the tiles, replace the waterproofing and re-tile (new tiles) and by the way, replace the balustrade because it was 10cm short of current standards. For a leak? The explanation was that the job could only be done under the supervision of an engineer because it involved waterproofing, and the balustrade came into the picture because the tiles came up to the lower edge of the balustrade which brought it into the scope of works. Needless to say, we didn’t go ahead with that job. Rather, we had the whole terrace re-grouted at a cost of $19K. So far, no further leakage has been reported. Something is seriously wrong here.

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                            #83043 Reply
                            Strata Ken
                            Flatchatter

                              One thing about these remediations is that the costs are so high that very few strata will be able to get enough votes to see them go ahead, and that means we are at the mercy of the developers.

                              If we assume $650k for a sale price per unit, and remediation costs of $200k, developers costs of $90k (loan, stamp duty, marketing) and profit of $60k, that makes their buying price about $300k. Land valuation is $140k. Is that a reasonable breakdown of the price, or is a developer just going to offer the land valuation and make lots of money? Or maybe somewhere in between.

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                              TD
                              #83052 Reply
                              Strata Ken
                              Flatchatter

                                The cost came in at a projected $120K to lift all the tiles, replace the waterproofing and re-tile (new tiles) and by the way, replace the balustrade because it was 10cm short of current standards. For a leak? The explanation was that the job could only be done under the supervision of an engineer because it involved waterproofing, and the balustrade came into the picture because the tiles came up to the lower edge of the balustrade which brought it into the scope of works. Needless to say, we didn’t go ahead with that job. Rather, we had the whole terrace re-grouted at a cost of $19K. So far, no further leakage has been reported. Something is seriously wrong here.

                                You are probably not allowed to do that anymore. The whole thing is ridiculous. We have 40 leaking bathrooms, but all of them will be the shower. We could replace the grout for about $1000 a shower, or retile the shower for $5,000 but that is not allowed, we have to remove all tiles in the bathroom, which means removing the fixtures, seal the whole bathroom and replace the tiles and fixtures at at least $30,000 per bathroom. I’m not certain what happens if we have one badly leaking shower because that puts us above the $5K limit.

                                 

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                                TD
                              Viewing 13 replies - 1 through 13 (of 13 total)
                              Reply To: Levies shock: the crippling cost of compliance
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