There has been much in the news lately about building defects. In between reports on dangerous cladding causing fires (Grenfell in the UK, Neo200/Spencer Street in Melbourne) and structural cracking & waterproofing issues (Opal Towers, Mascot Towers, Sugarcube in Erskinville, Garland Lofts in Zetland) it is hard not to know there is an issue in the Australian building industry. As a strata lawyer acting in the building defect area for owners corporations the interest is a welcome sign.
Two key questions I have been asked, and whose answer should not be overlooked, are”why is the media saying there is a building defect crisis? and “why is it important?”
The cause of the building defect crisis is multifaceted. For those interested a recent report by Nicole Johnson (Deakin University) and Sasha Reid (Griffith University) titled “An Examination of Building Defects in Residential Multi-owned Properties” is an excellent start to understanding the issue.
Why building defects are important is much simpler. It comes down to demographics. In a May 2018 report by UNSW’s City Futures Research Centre it was revealed that in NSW as at 2018 there:
- were 80,664 strata schemes (note that was 2018, there are more now);
- were 1,129,464 people living in apartments (the vast majority of which are strata titled);
- was 38% of all strata schemes had been registered since 2000 (meaning there is a large amount of new building stock);
- was $366,464,778,788 of strata property as estimated by strata insurers.
For a copy of this report see: https://cityfutures.be.unsw.edu.au/research/projects/national-strata-data-analysis/
For details of the building defect report see: