The NSW Building Commissioner’s Hard Hat Brigade in Action
How does this help fix strata defects in new NSW buildings?
It’s great to have a ‘watchdog’ in NSW trying to find and get defects fixed before building completion by site inspections, prohibition/rectification orders, and withholding occupation certificates. But is this just chipping away at the corner of the strata defect problem given its size, the complexity of building defects, the new building-only focus, and, patently inadequate legal rights?
[8.5 minutes estimated reading time, 1723 words]
Introduction
In 2019 the News South Wales government created Construct NSW and the role of NSW Building Commissioner and appointed David Chandler AOM to that role to improve the quality of construction and restore trust in the industry through leading the delivery of Construct NSW.
David Chandler OAM has a forty-year career in the Australian construction industry including project management of major developments, as Adjunct Professor in the School of Computing, Engineering, and Mathematics at Western Sydney University, as the founder of the Centre for Smart Modern Construction, as Deputy Chair of the BER Implementation Review, and as a regular industry commentator and presenter.
He’s a senior, capable and personable figure.
But can the NSW Building Commissioner and his hard hat brigade fix the problem of strata building defects in New South Wales?
Details about roles, powers, and activities
But most people don’t know what the NSW Building Commissioner can [and can’t] do under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020.
So, let’s look at some of the details since that’s where the devil is.
Powers to issue orders
The NSW Building Commissioner can, after inspecting buildings during construction issue:
1. A building work rectification order if he reasonably believes that building work could result in a ‘serious defect’ and it can require building work to be done or stopped or ‘to eliminate, minimise or remediate the serious defect or potential serious defect’.
2. A prohibition order if satisfied that a ‘serious defect’ in exists the building exists which prevents an occupation certificate from being issued.
Both types of orders can be issued at the same time or separately.
Typically, and as far as I can determine so far, building work rectification orders are issued, work is done to satisfy the order, and then the development can proceed to get an occupation certificate.
Appeal rights against orders
A building work rectification order or a prohibition order can be appealed in the Land and Environment Court within 30 days and hearings can be expedited where there are significant costs or if a completed building remains idle for an extended period.
The Land and Environment Court can revoke building work rectification orders or prohibition orders.
This is a merit-based appeal, so the Land and Environment Court can consider legal issues, facts, and discretion.
There’s also a separate right to judicial review in the NSW Supreme Court within 3 months for challenges to the NSW Building Commissioner’s interpretation or application of statutory powers or obligations.
So, far I’m not aware of any legal challenges to a building work rectification order or a prohibition order. But I’m sure they’ll come soon enough.
What’s a ‘Serious defect’
The NSW Building Commissioner’s powers depend on the existence (or the potential existence) of a ‘serious defect’ which can be one or both of the following.
1. A defect in a building element that is attributable to a failure to comply with the performance requirements of:
the Building Code of Australia,
the relevant Australian Standards, or
the relevant approved plans.
2. A defect in a building product or building element that is attributable to defective design, defective or faulty workmanship, or defective materials, but only if it causes (or is likely to cause):
the inability to inhabit or use the building (or part of the building) for its intended purpose,
the destruction of the building or any part of the building,
a threat of collapse of the building or any part of the building, or
the use of a building product in contravention of the Building Products (Safety) Act 2017.
So, there are a few qualifications that apply to valid building work rectification orders or prohibition orders that involve all the usual ‘expert and technical issues that always come up in building disputes. Plus, the definition of a ‘serious defect’ does not pick up or match the statutory warranties under the Home Building Act 1989.
What does David say about it?
David Chandler OAM, as NSW Government Building Commissioner, has been very active and vocal about his role, work, and intentions.
Here are some things he’s said that stand out to me.
That he is ‘absolutely serious’ and that he ‘wants consumers to understand that I am their dog in the fight. I will be out there every single day to make sure they are getting what they paid for’,
According to Sue Williams reporting in the SMH Domain in the article ‘A day with NSW Building Commissioner David Chandler, who is lifting standards in the construction industry’,
that he ‘has issued orders on nearly 1000 apartments in 10 developments to either fix them up or stop work, and deny them occupation certificates’,
he has ‘a goal of 100 audits a year’,
that ‘bathrooms and facades are … main concerns as … they often have the most critical problems’.
There’s also a series of YouTube videos featuring him like the recent one below.
And, I’ve already written about what David Chandler OAM has said about Project Remediate here – link
But, not all reporting about the NSW Building Commissioner is favourable as this SMH article ‘Not in my domain’: Commissioner powerless to help woman at centre of Sydney defects debacle’ reveals.
It seems that despite major defects and an investigation into the construction by the NSW Department of Fair Trading because an occupation certificate was issued by a private certifier, the NSW Building Commissioner is powerless saying:
‘that once an occupation certificate had been issued the developer could rightly or wrongly force buyers like Ms. Behrouz to settle’, and
‘that he couldn’t get involved at that point and it was not in his domain at all’.
So it’s mostly, but not completely, a good news story.
The good stuff
So, what’s good about the NSW Building Commissioner’s activities?
In a relatively short timeframe, there’s been a lot of public-facing activity by David Chandler that brings attention and increases awareness of the strata building defect problems. Plus, it’s presented in common sense and positive ways.
It’s also clear that the NSW Building Commissioner is targeting builders who he has identified as having repeated examples of unsatisfactory building work. Which has a training effect on them [you know the carrot and stick method].
New buildings are getting fixed before strata owners take over [at least for the defects that the NSW Building Commissioner finds] at developer or builder cost so that reduces future pain for the strata buildings and strata owners.
The government and public feel good that things are happening and the serious problem of strata building defects is being addressed [at least in part].
The not so good stuff
But, what’s not so good about the NSW Building Commissioner’s activities?
The NSW Building Commissioner ins’t and can’t do anything for existing buildings with defects or on the new buildings where an occupation certificate gets issued. So, the existing problem isn’t being addressed and [as a cover below] the number of completed but defective strata buildings keeps increasing. Remember there are already more than 80,000 New South Wales strata buildings.
Even if the NSW Building Commissioner inspects 50 [or even 100] new strata buildings per year] that’s a fraction of the new strata buildings being created every year in New South Wales. As I reported in the article ‘7 + 3 Insights into 2020 Australian Strata Data’ there have been more than 1,700 new strata buildings registered in New South Wales per year since 2018. So, we’re talking about less than 6% of new strata buildings being inspected; meaning most strata buildings will not benefit from the program.
In my experience and based on what I’m hearing about the NSW Building Commissioner inspections it’s going to be virtually impossible to check every likely defective element of buildings given the size and complexity. So, even if a building work rectification order is issued and the work done, there’s no guarantee the strata building won’t have other defects. It’s also possible the defect identified in the building work rectification order might not be properly rectified.
It will be impossible for NSW Building Commissioner inspections to identify latent defects [defects in hidden elements of the building or defects that develop over time] before the building is completed. No level of inspections or even investigation of design documentation can be extensive enough to do that. So, presumably, when those latent defects appear many years later, the strata building will be left in the same position it’s always been.
Nothing has changed in relation to the legal rights of strata buildings over defects or in relation to home building insurance which remains woefully inadequate as I wrote about in ‘The Saga of NSW Strata Defect Claims’.
What happens when a developer or builder disputes a building work rectification order or a prohibition order and wins? It’s going to happen sooner or later unless you believe the NSW Building Commissioner is infallible and when it does, it will create political, financial, and timing impacts on the process.
And finally, what happens when David Chandler retires? Where’s his successor or successors?
Conclusions
The work being done by the NSW Building Commissioner will help prevent some new strata buildings experience some defects by pre-completion inspections, orders and holding up occupation certificates.
And it may force some developers and builders [especially the ones that are targeted to improve some parts of their construction processes].
So, I’m all for it.
But, given the size of the existing strata building defect problem in Australia [see my article ‘How Big is the Australian Strata Defect Problem?’] and the small fraction of new strata buildings that will get inspected, it’s just chipping away at a small corner of the problem.
I also know that inevitably a developer will challenge the NSW Building Commissioner’s refusal to allow the issue of an occupation certificate over a disputed defect that holds up hundreds of apartment sales and causes significant losses which will challenge the technical and legal bases for the issued orders.
Who will win that fight and, what will the New South Wales government do then?
There might be lessons in their approach to Project Remediate.
May 14, 2021
Francesco Andreone