The quality and safety of new apartment buildings in NSW appears to be improving, with a new survey of strata managers suggesting that the number of serious defects which are occurring in new apartment buildings may be in decline.

Conducted by the Office of the Building Commissioner (now called Building Commission NSW as of the beginning of this month) and Strata Community Association (NSW), the survey aimed to identify the nature and prevalence of serious defects which are occurring on common property in new apartment complexes throughout the state.

This comes two years after a similar survey was completed in 2021.

All up, the survey involved responses from strata managers covering 642 apartment complexes. These covered new buildings that have been registered in 2016 or later.

At first glance, the results may appear to indicate that standards in apartment construction have in fact deteriorated rather than improved.

All up, 53 percent of buildings that were covered in the survey have at least one serious defect on common property.

This is up from 39 percent during the same survey in 2021.

However, caution should be observed when interpreting this result.

For the latest survey, strata managers were given a list of specific defect types when asked about serious defects. This helped to ensure that those completing the survey were fully aware of the types of defects that were covered.

By contrast, no such list was provided in the 2021 survey.

Accordingly, the variation in results between the two surveys is most likely a reflection of the wording of survey questions.

Moreover, the survey results appear to show an improvement in building quality and safety following the commencement of the state’s program of building safety reform in 2019.

As part of the 2023 survey, the registration year of buildings which are covered in the survey was recorded.

As shown in the chart, the occurrence of serious defects appears to have been on a downward trend since the commencement of the Design & Building Practitioners Act and the Residential Apartment Buildings Act (RAB Act) and June 2020 and September 2020 respectively.

As with the above, caution should be observed when interpreting these numbers.

This is particularly the case as defects from some buildings that were constructed over more recent years may not yet have been identified.

Indeed, anecdotal evidence suggests that defects in regard to fire safety are commonly uncovered during the building’s first annual fire safety inspection. For other defect types, these are commonly uncovered when owners commission technical reports prior to the expiration of the building’s two-year statutory warranty period for minor defects.

As a result, data quoted in the chart is likely to understate the true extent of defects for buildings which have been registered in 2021 and 2022.

Despite this, the results do appear to indicate that the prevalence of serious defects has trended downward since the reform program began.

In another pleasing result, there has been a more than doubling in the proportion of defects which have been reported to NSW Fair Trading from 15 percent in the 2021 survey to 34 percent in the latest survey.

This likely reflects greater awareness about the ability of the regulator to assist in building disputes as well as greater resourcing which has been given to the regulator over recent years.

(Note: As of the start of this month, the newly formed Building Commission NSW has assumed responsibility for building regulation across NSW. Previously, that responsibility lay with NSW Fair Trading and the Office of the Building Commissioner.)

In other survey outcomes:

• As in 2021, waterproofing and fire safety systems (passive and active) were the most prevalent types of serious defects. Defects of this type were present on 42 percent and 24 percent of buildings covered in the survey respectively. This was followed by building enclosures (facades, doors, windows – 19 percent), structural (15 percent), services (mechanical/plumbing/electrical/acoustic – 14 percent) and non-compliant cladding (8 percent. The prevalence of waterproofing defects has declined in recent years.
• The most common method through which owners are being able to resolve defects is by agreement with the builder or developer. Almost half of all defects are resolved within one year.
• All up, 48 per cent of strata managers surveyed agreed that introduction of new laws in NSW have increased consumer confidence in residential apartments.  This far outweighs the 18 percent who do not agree that this is the case.

The latest survey results come as New South Wales has been pursing an active program of building safety reform which commenced under the former Coalition Government in 2019 and has been continued by the newly elected Labor Government this year.

A key part of these reforms involved the Design and Building Practitioners Act which commenced in June 2020 and the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020, which came into effect in September 2020.

The former piece of legislation introduced a range of measures to improve the quality, safety and compliance of new building design and construction.

The latter gave new powers to the Office of the Building Commissioner (now called the NSW Building Commission) to audit and enforce compliance on building sites.

Other reform initiatives include have included development of the new Independent Construction Industry Rating Tool (iCIRT) to assist both insurers and consumers to identify trustworthy developers and the introduction of 10-year latent defects insurance – which is currently voluntary but is expected to be mandatory by 2028.

At the beginning of this month, the Office of the Building Commissioner and the building functions of NSW Fair Trading were brought together into the new Building Commission NSW. This is a new regulator with dedicated resources and a specific focus on the building industry.

In 2024, legislation to create a new Building Act is expected. The aims to consolidate and modernise all current building laws and regulations.

(Introduced in 2020, the Residential Apartment Buildings Act allows the Building Commissioner to inspect the quality and safety of new apartment buildings – a power which has recently been extended to low-rise residential buildings as well. These audits are often coordinated with Safe Work NSW to audit the safety of the workplace at the same time)

NSW Building Commission David Chandler OAM welcomed the latest findings.

“While this survey delivers an important reminder of the legacy issues that reside in apartment buildings completed before the Construct NSW reform strategy commenced in 2019, it demonstrates that these reforms have shifted the dial in the right direction for newer buildings,” Chandler said.

“This survey presents some promising findings. It demonstrates a steady decline in the reported defects since 2020, and strata communities and future apartment purchasers should be increasingly confident that NSW is the most attractive state in which to purchase a new apartment.

“The incidence of waterproofing defects is declining, supported by what building inspectors are seeing in the field. The reported incidence of non-compliant fire safety and key building services installations has increased, possibly due to increased awareness of these building elements.

“Developers and builders associated with the construction of apartment buildings with serious defects have increasingly been held accountable to fix them since the commencement of the NSW Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act) and the Design and Building Practitioners Act 2020 (DBP Act).”

Strata Community Association President Stephen Bell agrees.

“Many people across NSW live in vibrant, thriving and diverse strata communities, and they play a pivotal role in our society,” Bell said.

“With the number of strata schemes rapidly increasing in NSW, SCA continues to support the NSW Government’s commitment to enhancing the quality of life for strata residents.

“I’m proud of the role our members have played in providing valuable insights as part of this research completing 642 surveys, up from 492 in 2021. This represents a 41 per cent survey response rate.

“The data and findings in 2023 point to a backlog of legacy defects. Project Intervene, an outcome of the 2021 survey, is making inroads into these buildings with over 150 buildings registered for the program.

“Addressing building defects remains a formidable task, however, I feel that the establishment of the Building Commission NSW demonstrates how serious the government is in restoring confidence in NSW apartment buildings.”