Changes in legislation needed to fix the construction industry
written by Honan Insurance Group
Déjà vu? Once again, another Sydney apartment block has been evacuated due to observed structural cracking in the building’s underground car park. Mascot Towers, a 131-unit complex at No. 1 Bourke St Mascot was evacuated last Friday evening (14 June) with residents given short notice to vacate their apartments. On Tuesday, there was still no advice on when residents would be able to return to their homes permanently. This follows on from the dramatic Christmas Eve (2018) evacuation of Sydney Olympic Park’s Opal Tower.
The cause of the cracking in Mascot Towers is yet to be determined, and alleged possible causes may include neighbouring construction work or the original design and construction 10-years ago. Mascot Towers was constructed over 10-years ago, meaning that any building defects will not be covered by building warranty insurance (referred to as Home Builders Compensation in NSW), leaving the unit owners to pay for the repairs. If the neighbouring construction project is to blame, then a lengthy legal battle may occur regarding various other insurance covers.
Currently, NSW law states that future owners of a property are covered for the statutory warranty period – six years for major defects in the work and two years for other losses from the date of completion of work. With many building defects appearing after the six-year statutory warranty period, there is a need for major changes to be made to NSW laws to protect property owners buying off a plan or buying buildings younger than 10-years old that were poorly built.
The strata industry and Strata Community Association (SCA) will continue to advocate for change and encourage the government to further regulated the relaxed approach to building completion sign off and hold the construction industry to account for faulty work.
In February of last year, the NSW Government told the COAG meeting that it would introduce new legislation to improve consumer protection if they won the next election, these included:
– Builders needing to sign off that building was constructed in accord with certified plans
– Allowing Owners Corporations to litigate for negligence if building code was not carried out
This new legislation is still to be introduced, and many people in strata see this legislation as not being tough enough on the construction industry who are accountable for this issue. With research finding that 72-85% of owner’s corporations identifying major defects in their buildings, it is important that strata managers and the SCA continue to do what they can to influence the federal and state governments into reforming legislation as soon as possible.