More than half of all apartments in Sydney may have serious defects, a new report has found.

And consumers trying to buy an apartment have little means by which to identify potentially defective dwellings.

In their latest report, researchers from the City Futurees Research Centre at UNSW Sydney analysed more than 600 apartment complexes which were completed between 2008 and 2017 and conducted in-depth interviews with strata management and defect related building professionals.

The researchers aimed to understand the extent of building defects in multi-unit strata titled complexes (MUST) along with the systematic features within the development process which contribute toward defect problems.

All up, the researchers identified clear evidence of defects in only just over one quarter (26 percent) of all buildings studied.

Nevertheless, they feel that the actual number of defects is likely to be much higher as defect identification across many of the buildings studied was impacted by poor documentation.

Restricting their analysis to the 314 strata schemes for which robust data and documentation was available, the researchers found that at least one or more defects had been identified in 51 percent of buildings.

Furthermore, more than one in ten buildings studied had ten or more defects.

Across all buildings with good documentation, the most common defects identified related waterproofing, cracking/structure and fire safety.

Defects of these nature were identified in 42, 26 and 17 percent of such buildings respectively.

source: Cracks in the Compact City: Tackling defects in multi-unit strata housing, UNSW Sydney Built Environment City Futures Research Centre

In addition to the prevalence of defects, report authors say consumers suffer from a lack of transparency surrounding defects which may be present across many buildings.

Dr Laura Crommelin, a planning law expert with UNSW’s School of Built Environment, says the aforementioned inadequacies surrounding documentation make it difficult for prospective buyers to understand which buildings may or may not have defects.

Crommelin adds that it was difficult even for a team of experts to determine which projects had defects along with the nature of any defects.

This is despite knowing what to look for.

“Over the past 20 years there hasn’t been a thorough process of collecting information about the quality of buildings, and documenting issues with buildings,” Crommelin says.

“So it’s currently almost impossible for a regular consumer to do proper research about what they’re buying – and this is in a system based on the idea of ‘buyer beware.

“The drive to construct more buildings more quickly has been a huge part of the urban planning orthodoxy for the past 20 years, not just in Sydney, but in all cities where higher density development rather than ongoing urban sprawl is seen as a way of dealing with population growth.

“But with the pressures for speed and reduced costs, and the trend towards deregulation, high quality oversight and documentation can be among the first things to fall by the wayside.”

In addition, Crommelin says there is a disparity due to the power imbalance between developers and individual apartment buyers.

“In the apartment market you have a very significant power imbalance between the vendors – in this case developers – and the buyers, who are essentially a fragmented group of individual purchasers.

“When you look at other types of high rise, like a big commercial building, you don’t see the same endemic problems with defects because the clients are powerful – usually big companies – so they can look after their own interests and are often involved in the design and delivery of the building.

“But when you’re talking about individual consumers, who don’t know how construction works and don’t have the same negotiating power over the terms of sales contracts, you don’t have the same protections.

“They’re not coordinated, so there’s a lot more room for them to either be taken advantage of, or to make decisions that aren’t in their best interests.”

‘The problem is not simply that there are defects, but also that it is so difficult for prospective apartment buyers to know about defects ahead of purchasing, or to have them rectified once discovered.

“Even good developers have some defects. But it’s about what they do after their discovery. The good developers will come back, they’ll fix the problems, they want to make sure that their clients are happy because they care about their reputation.

“The real concern is the ones who do everything they can to avoid coming back to fix problems.”

(source: ibid)

The latest report comes as New South Wales is undergoing a six-pillar program of building regulation reform to improve the level of quality assurance in the design, construction and delivery of multi-residential apartment towers.

These efforts follow two high profile cases of structural cracking in NSW apartments and the discovery of hundreds of buildings which were clad in flammable material.

The reform efforts also follow a 2019 agreement among all states and territories to implement the reforms of the Building Confidence report prepared for the Building Ministers Meeting in 2018 by Professor Peter Shergold and lawyer Bronwyn Weir.

The report also follows an earlier report released by NSW Building Commissioner David Chandler which found that four in ten buildings have at least one or more serious defects in common property.

Whilst welcoming the above measures, the UNSW researchers have also called for additional measures to better protect buyers and consumers.

These include:

• Requiring developers being required to provide new owners with a comprehensive, user-friendly building Manual
• Continuing to strengthen the building inspection regime, including post-completion
• Strengthening NSW Fair Trading’s capacity to respond to reports of building defects; and
• Ensuring that pre-purchase strata reports are high quality, so that purchasers can do their research about existing buildings.

Crommelin says further action to protect consumers is needed.

“It’s been great to see renewed regulatory activity in NSW in recent years, but there’s still a way to go,” she says.

“We hope the report recommendations will help to keep us moving in the right direction, so that apartment living can feel safer and less stressful in the future.”