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Commissioner’s Plan to Cut Legal Battles Over Dodgy Buildings

By Yellow Van  
Published September 16, 2024  

Owners' corporations in New South Wales now have the ability to report defective buildings up to six years old and receive government assistance to resolve disputes outside of the courts. This initiative was introduced by the state's first Building Commissioner, David Chandler.

Chandler, who initially resigned but returned after the sacking of his minister Eleni Petinos, launched the program, called *Project Intervene,* which he expects will cover "a swag of buildings."

Under the scheme, owners’ corporations can report defects in common areas of their buildings to Chandler’s team. The team, using the authority of NSW Fair Trading, will assess the defects and then sit down with the developer to demand that they make the necessary repairs.

“We're pulling these cases out of the courts and focusing on getting the work done rather than wasting money on legal battles,” Chandler said.

Developers with an iCIRT rating can also report defects through the program and will be shielded from legal action. Chandler emphasized that he doesn’t want reputable developers to be exploited by "some lawyer who wants to go on a folly."

According to Chandler's office, 39% of NSW apartment buildings have serious defects, yet only 4% of litigation cases succeed in fixing those issues. Legal fees often soar into the hundreds of thousands of dollars. For example, in the *Otto 2* apartment project in Rosebery, homeowners spent $2 million on legal and expert fees without even stepping foot in court.

Karen Stiles, head of the Owners Corporation Network, welcomed the initiative. She said that strata owners have been "crying out for help" to avoid long and expensive legal battles.

“There’s been nowhere to turn,” Stiles said. “Developers have deep pockets and just wait it out... or the builder goes bankrupt, and it’s all a waste of time.”

To qualify for the new program, the building must be less than six years old, have four or more storeys, and the developer must still be in business. Chandler acknowledged that roughly 20% of cases involve developers who are no longer trading and said he is working on alternative solutions for those situations.

The defects targeted by the program must be serious, such as structural failures like cracking slabs, leaks, cladding problems, and issues with essential services like ventilation, lifts, and plumbing.

Chandler’s appointment as Building Commissioner in 2019 followed several high-profile construction scandals, including *Opal Tower* and *Mascot Towers.* His original mission was to improve construction standards, but he recognized the need to address existing building defects.

“No matter how much good we do moving forward, if we don’t fix the problems in already-built structures, they’ll come back to haunt us,” Chandler said.

*Project Intervene* opened earlier this month and has already received 30 applications. Traditionally, only about 15% of building owners reported defects to Fair Trading, which had a poor track record for resolving such complaints, according to Chandler.

He made these remarks at *Billbergia’s* Rhodes office while awarding the developer a gold-star iCIRT rating from Equifax, an independent rating agency for the construction industry. Chandler warned developers that a good rating is "not an immunity pin" against scrutiny from his office.

About one in five developers who applied for an iCIRT rating has been rejected, Chandler noted.

Owners’ corporations have until June 30, 2023 to report their buildings to *Project Intervene,* but Chandler indicated the initiative could be expanded in the future.