Strata defect laws need an injection of Fair Go

With Sydney Olympic Park’s Opal building crumbling on one side, and buildings in Melbourne going up in flames on the other, NSW Better Regulation Minister Matt Kean had to do what it says on his letterhead … come up with some better regulations.

And so he has devised a set of plans that will, apparently for the first time, make everybody involved in the construction of a new apartment block directly responsible for the work they do.

He showed the plans to some of his interstate colleagues at a building minister bunfight in Hobart last weekend, they all nodded approvingly, so a version may eventually be adopted in other states too.

They could certainly use it in Canberra where, according to this story, a complete failure of basic consumer protection laws have left unit owners high and dry with millions of dollars worth of defects while the developer sails off into the sunset.

Back in NSW, Minister Kean insists his plan has been in the pipeline for months. The need for a review was first mooted when an August 2017 Building Ministers’ Forum commissioned an independent report into the industry.

But, like the heroes in an action movie, nothing gives you a hurry-up quite like crumbling walls and flames ripping up the side of a building.

The essence of the plan is that, if it survives the imminent election, the government will appoint a Building Commissioner to act as a “consolidated building regulator … with responsibility for licensing and auditing practitioners”.

Meanwhile building practitioners – designers, architects, engineers, builders etc – will be required to be registered and take legal responsibility for their work.

Also the law will be clarified to “ensure there is an industry-wide duty of care to homeowners and owners corporations so that they have the right to compensation where a building practitioner has been negligent.”

There could be no better time to institute radical change in the building industry.  New apartment approvals have dropped 40 per cent so there’s unlikely to be a skill shortage if the government is serious about clearing out dead wood.

But what do all these new rules and regulations mean for the apartment buyer? What happens when your newly licensed, certified building practitioner stuffs up? What exactly does “the right to compensation” mean. Don’t we already have those rights through existing channels?

Yes and no.  Cracked walls and burning decorative panels are pretty convincing signs that someone has made a mistake.  But you could grow old trying to break the daisy chain of finger pointing when you are trying to turn blame into responsibility.

Will that change when an industry-wide “duty of care” has been established?  It can only be an improvement.

But ultimately, unless those at fault meekly pay up, the enthusiastic amateurs of a strata committee still have to take on high-powered corporate lawyers over claims that can run to millions of dollars.

Trust me, that’s not a fair fight.  I’ve seen it up close and it’s ugly, messy, destructive and a huge financial risk with no guarantees, even when you win.

So hats off to Minister Kean. But there’s a missing piece in this legal Lego. We must remove the need for ordinary home owners to go to court just to get what they paid for.

What consumers need is a Strata Advocate who assesses defects claims and has the authority to force the culprit to pay up.

And if the builder, developer, architect or engineer doesn’t like the result, it’s the Strata Advocates office that their big-bucks lawyers fight, instead of people who bought off the plan chasing multi-national corporations through the courts.

When you’ve been robbed, the police don’t expect you to conduct your own investigation and then prosecute the perp using your own money. It should be the same for people who’ve been ripped off by building professionals.

A version of this column appeared in the Australian Financial Review.