Off-the-plan defects targetted by new law

NSW apartment buyers can have greater confidence in their off-the-plan purchases under new laws that came into effect last week (July 1), claims the state government.

New laws mean that  the designers, engineers and builders involved in every new residential apartment building being constructed, will have to be registered and comply with “robust” new requirements, according to a press release from Minister for Better Regulation Kevin Anderson

Somewhat ironically, the new laws came into force on the same day that it was reported in the Sydney Morning Herald that the developer of two 22-storey apartment towers in Parramatta’s CBD has been issued with orders preventing it from allowing owners and tenants to move in after serious defects were discovered.

According to the SMH story, the towers at 9 Hassall Street contain 179 units between them. The towers, known as the Imperial, were nearing completion and are still unoccupied but a number of apartments have been sold off the plan.

Mr Anderson says the NSW Government’s Design and Building Practitioners Act 2020 (DBP Act) will revolutionise the way professional engineers, designers and builders work on multi-unit, multi-storey residential buildings.

It also directly responds to the Shergold Weir Building Confidence Report which found that non-compliant design and poor design documentation were the single greatest driver of defects in these buildings.

This report landed just hours after it was revealed that residents of the collapsed Champlain Towers apartment block in Miami Beach, Florida, had been warned that the building was in great structural danger.

In turn, that has led to calls for existing blocks of similar vintage and design in Australia to be subject to structural checks.

“For the global apartment market, Florida is the canary down the mine,” said Cathy Sherry, UNSW Associate professor of law and strata expert in a comment piece in the Sydney Morning Herald.

“Building defects are rife with many purchasers buying into a world of pain. In all the fuss and noise around building defects, a basic point seems to be forgotten. It is entirely reasonable to assume that a brand-new apartment building will be defect-free.

“This is because developers are perfectly capable of building defect-free buildings; they do so in the commercial sector all the time. They fail to do so in the residential sector because of split ownership, and because they have been allowed to get away with it. The future consequences could be our own Champlain Towers.”

The NSW state government is clearly hoping its new laws on transparency and accountability will go some way to addressing that very issue.

“In the past consumers have been wary about buying new or off-the-plan apartments because of the risk of poor building work and design standards – but that ends today,” Mr Anderson said.

“We are transforming the building sector by making it more transparent and accountable so homebuyers can have peace of mind.”

“Under the changes the days of poor quality design are over – designs for a high-rise apartment will have to be to a minimum standard and lodged with the regulator before construction begins,” Mr Anderson said.

“We’ll also be undertaking targeted audits of those designs, so that issues can be identified and addressed before building works commence, saving everyone involved time and money, and avoiding disappointment and stress for buyers.”

NSW Building Commissioner David Chandler OAM will continue to lead the Fair Trading inspections teams responsible for undertaking compliance audits across the State. 

“We’ve put the responsibility back onto the designers and builders to ensure their work is up to scratch and will take a proactive regulatory approach to protect the interests of apartment purchasers,” Mr Chandler said.

Under the DBP Act, from today:

• Designers must declare that their designs comply with the Building Code of Australia and other relevant standards;
• Builders must declare that their building work has been constructed in accordance with compliant designs; and
• Declared designs must be lodged on the NSW Planning Portal before construction can begin.

Mr Anderson said the commencement of the DBP Act, along with the new powers given to the regulator and Building Commissioner through the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 provides NSW with the strongest regulatory regime in Australia for apartment buildings.

“We’ve already been stepping in to stop purchasers being forced to settle on defective buildings through our tough new occupation certificate audits; today we start our efforts even sooner in the construction process by honing in (sic) on the quality of the designs,” Mr Anderson said.

Actually, it’s “homing in”, Minister. But, hey, if this really does boost confidence in apartment building what’s an eggcorn between friends?

For more information visit: https://www.fairtrading.nsw.gov.au/trades-and-businesses/construction-and-trade-essentials/design-and-building-practitioners

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