COMMENT: The NSW Building Commission’s policy of prosecuting rather than shutting down dodgy developers is seriously defective with more than half of all apartment builders ignoring defects directives.

However, the state has launched just two prosecutions since June, which must raise serious questions about enforcement and build quality amid the state-wide and national push to accelerate housing construction.

With the current housing crisis uppermost in politicians’ minds, the focus has clearly shifted from building better apartment blocks to simply constructing more of them.

According to the Building Commission’s own figures, of more than 200 building work rectification orders issued since the Residential Apartment Buildings (Compliance and Enforcement) Act came into force, approximately 60 per cent remain unfulfilled, with builders simply disregarding instructions to repair substandard work.

This is a perennial problem with fewer than half of the 32 orders issued this year complied with. Despite this, the Building Commission has taken only two developers to court in the six months since mid-year, according to a story in the Sydney Morning Herald.

A commission spokesman said, “as part of its work to lift standards across the sector”, the commission was actively considering enforcement action against around 30 other developers for non-compliance with Building Work Rectification Orders (BWROs), which are issued for serious defects in apartments.

NSW Building Commissioner James Sherrard said last week that these developers were “in the crosshairs” but with a current prosecution rate of four per year compared to a non-compliance figure of more than 15, the only people who will be shaking in their shoes are the purchasers of new apartments.

And we should not forget that each of those 15 failures to fix defects represents dozens if not hundreds of ordinary people’s homes. And for many developers, it’s clearly worth rolling the dice on potential prosecutions rather than doing the right (and expensive) thing and fixing defects.

The minimal prosecution rate stands in stark contrast to the scale of the problem and marks a significant departure from the enforcement approach established under former NSW Building Commissioner David Chandler, who frequently issued stop-work orders on defective buildings.

Today, with housing supply identified as a critical government priority, enforcement appears to have taken a back seat to construction targets.

The commission’s reluctance or inability to pursue legal action in significant numbers has created what property law experts describe as a compliance vacuum. Builders who ignore rectification orders face little practical consequence, emboldening others to similarly disregard regulatory directives while home owners are left waiting for repairs that may never come.

Since 2021, the Building Commission has issued almost 100 building rectification orders around the state, yet the regulatory body has not imposed penalties on the majority of developers who have failed to comply. The enforcement gap has widened even as the backlog of defective apartment buildings continues to grow.

The dramatic shift from Chandler’s interventionist approach reflects the tension between maintaining building standards and meeting ambitious housing construction targets. Stop-work orders, while effective for preventing further defective construction, halt projects entirely—an outcome increasingly seen as unacceptable when thousands of new homes are urgently needed.

However, the current strategy of issuing orders without following through with prosecutions has produced its own problems. With only two court cases initiated since June despite and more than half of all rectification orders being ignored, the regulatory framework appears toothless, potentially undermining building quality across the state’s apartment sector.

The Building Commission, established in December 2023 to provide integrated oversight of residential building quality, possesses significant powers including inspecting sites, preventing occupation certificates from being issued, and ordering rectification work. Yet the statistics reveal these powers are rarely deployed in any meaningful way.

As NSW grapples with a severe housing shortage and pressure mounts to deliver more apartments quickly, the Building Commission faces a fundamental question: can building quality be maintained when half of all rectification orders are ignored and prosecutions remain virtually non-existent? The answer will have lasting implications for thousands of apartment buyers and the integrity of the state’s residential construction industry.