It’s no secret that Sydney is undertaking a major property development boom, with high-density housing accounting for the majority of this boom. So it’s no surprise that “Strata” is one of the fastest growing forms of residential property ownership in Australia. With this rapid rise in apartment construction, unfortunately comes a plethora of apartment blocks riddled with building defects.
Building defects refer to cosmetic, amenity, structural, and safety issues within a complex/building. These defects can manifest as cracks, water leaks, fire non-compliance, electrical and plumbing faults, and façade issues, just to name a few.
Residential building defects occur in many forms, to different extents, and in all types of buildings irrespective of age within the warranty period. As reported by the Federal Government, up to 85% of strata units in NSW are defective upon completion. It is therefore imperative that Owners Corporations carry out an independent building inspection within the 2 and 6 year warranty period, from when a building is completed. This ensures the best chance for the Owners to have the builder/developer rectify these defects rather than the Owners themselves.
Building defects, if left unresolved or undetected, have the potential to create large holes in the hip pockets and the amenity of homeowners. Not only does it become more costly to rectify over time, but building defects also have the potential to pose a significant health and safety risk.
Given the money already invested by Owners, choosing not to act in identifying and ignoring building problems is negligible for sustaining an investment. Owners Corporations must be mindful of their obligations and take proactive action on building defects to preserve the amenity of the building and protect the financial interests of all strata property owners!
The introduction of the Strata Building Bond is a step forward in ensuring building defects are addressed by the Builder/Developer, whilst eliminating the upfront financial burden on the Owners Corporation. However, it will be a number of years before we begin to see the enactment of this bond and its reaction in the industry.