Building Defects: Why are they a crisis? And why is it important?

sydney at nightThere 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:

https://www.deakin.edu.au/about-deakin/media-releases/articles/deakin-report-analyses-growing-number-of-apartment-building-defects

 

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