Construct NSW Report: What Were The Key Findings? And Are They A Surprise?

The NSW Office of the Building Services Commission and Strata Community Association NSW (SCA) partnered up to obtain information on building defects in NSW class 2 (residential) strata buildings. The report, Construct NSW: Improving Consumer Confidence, was released in September 2021.

A key goal of the investigation and report was to provide data on building defects  to inform policy makers in the construction sector.  A focus was on the impact and the prevalence of serious defects in new strata buildings, that is buildings that were under six years old and over four storeys in height. Serious defects were considered for the purposes of the report to be those relating to waterproofing, fire safety systems, building structure, enclosure and key services.

The findings can be summarised as:

1. 39% of strata buildings reported serious defects. The breakdown of defects was:

(a) 23% of all buildings reported waterproofing defects

(b) 14% of all buildings reported fire safety system defects

(c) 9% of all buildings reported defects in structure

(d) 9% of all buildings reported defects in enclosure

(e)  5% of all buildings reported defects in key services.

2. In addition 6% of all buildings reported issues with non-compliant cladding.
3. A little over a quarter of the buildings (27%) had resolved the dispute with the builder or developer with approx. 3% of buildings resolving the issue through the NSW Civil & Administrative Tribunal or a Court.
4. On average the estimated cost to rectify defects was reported as $331,829 per building.
5. Most strata managers reported that they did not have many of the key documents including as built plans for the building that the owners corporation should possess.

These figures, particularly the estimated cost of repairs, the breakdown of defect types and the dispute resolution path, are surprising. Waterproofing defects and structural defects appear to be low although the report does note that the reported rate of waterproofing defects has significantly dropped since a previous study by Fair Trading. The estimated average cost of repairing these serious defects and the amount of disputes resolved with builders and developers also seem low. This may reflect the size of the strata schemes responding as out of approx. 1450 strata managers asked to respond, data was provided for 492 buildings which may have skewed the sample. This is not a criticism of the report, it is important to obtain information on the building defect situation in NSW.

Author: Allison Benson