09 April 2013
The Owners Corporation Network, the Urban Taskforce Australia and the Property Council of Australia have agreed on a set of reforms to the Home Warranty Scheme in NSW that will give owners and builders more confidence about building quality and the resolution of defects.
The reforms, if adopted by government, will bring back into the apartment market in NSW one of Australias largest builders and developers, Brookfield Multiplex, who have refused to build apartments in NSW because of the lack of certainty over defect claims.
The Owners Corporation Network wants the quality builders and developers to deliver new apartment buildings rather than phoenix companies that disappear when problems occur, says Stephen Goddard, Chair of the Owners Corporation Network. We are very impressed that the development industry has come to us to say we need a better system that ensures quality construction and establishes independent assessment processes for defects if they occur. We welcome this open approach to work with the building and development industry.
“Building regulation without compliance incurs social and or economic costs that are not sustainable. This initiative will generate good public policy which is in the public interest,” says Stephen.
The development industry understands that owners corporations do not want buildings with excessive defects but the current operation of home warranties is leading to very large amounts of funding going into legal fees and consultant costs rather than on fixing defects, says Urban Taskforce CEO, Chris Johnson The problem seems to be that each side is building up legal battles rather than solving the problems. Our proposed reforms appoint an independent expert to determine the extent of defects. The development industry is prepared to fund the reasonable costs of this inspection generally undertaken 2 years after completion.
Glenn Byres, Executive Director of the Property Council in NSW says, We understand that owners expect quality but this often requires maintenance as well as good supervision. The package of reforms we have proposed addresses the whole process from construction to supervision, certification and maintenance. It includes singling out the right issues for categorisation as major defects and prioritising them in warranty inspections.
The key reforms that the parties have agreed to include:
- A better licensing system of builders.
- Improved construction certification.
- Clearer definitions of types of defects.
- Waterproofing and compliance with fire standards to be major defects.
- Completion of a building to be clarified.
- Handover of maintenance schedules, contract plans and related documents to the owners corporation.
- Maintenance schedules to be implemented.
- Independent experts to resolve defect disputes.
- Register of independent construction experts to be established.
- Developer to provide reasonable funds for future mandatory inspection.
- Mandatory inspection before 2 years.
- Reports filed with the Office of Fair Trading.
- Builder allowed access for rectification work.
- Notice attached to the licence of builders who fail to rectify.
- Accreditation of Independent Industry Experts.
- Public register of builders.
- Public register of HOW policies.
- Government Inspectors on Queensland model be considered.
- Enforceable penalties for non- compliance.
