On February 4, residents of the NEO 2000 tower in Melbourne were forced to evacuate after cladding similar to that used on London’s Grenfell Tower caused fire which started on the 22nd floor to spread to the 27th floor.
Six weeks earlier, residents of Sydney’s Opal Tower were forced to evacuate after hearing cracking sounds including a loud bang.
These incidents underscore problems which have affected the quality and safety of building work in Australia for years. In 2012, a major survey of apartment owners undertaken by the University of New South Wales found that 85 percent of owners of apartments constructed between 2000 and 2012 had experienced defects such as leaks, cracking and water penetration from outside.
What’s going wrong?
When it comes to building, Australia has a good start. It has a nationally consistent building code (the NCC) set by the Australian Building Codes Board (ABCBB) and which references more than 100 technical standards produced by Standards Australia.
Despite some criticism, both the Code itself and the standards it references are broadly considered to be robust. Likewise, both the ABCB and Standards Australia are mostly well regarded.
Better yet, the Code has been made more accessible after the ABCB made copies freely available online in 2015. Prior to this, the ABCB had around 12,000 paying subscribers who would receive copies of the Code. Nowadays, the NCC is freely accessed by just over 200,000 registered subscribers.
Despite this, challenges remain.
First, administration of building regulation and builder registration differs across each state and lacks consistency. A Class One builder licence in one jurisdiction may not necessarily align with a domestic builder unlimited or a commercial builder unlimited designation in Victoria, for example. Only one state (Victoria) requires quantity surveyors have a mandatory formal process for registration. Within each state, ministerial and departmental responsibilities which affect building are spread across portfolio areas such as industry, planning, science/technology, infrastructure, housing, employment, environment and innovation.
A further challenge is education. Throughout construction, multiple tiers of builders have the ability to make decisions which affect the safety of others. This ranges from construction managers at tier one builders down to small home builders, bricklayers or carpenters. This presents challenges in how education is delivered. Teaching via textbook may be effective at TAFE or university yet may not be suitable at the more basic end.
Another issue is imported products. Rightly so, Australia maintains an open stance on international trade. Yet in construction, products made elsewhere can create challenges here. Steel imported from overseas can create problems during welding where its carbon content differs from that of Australian made steel and welding rods which are designed for local products are used rather than rods which are needed for the imported material. Imported glass which has different chemical compositions to its locally produced counterpart may not survive Australian conditions.
Finally, in some areas, lack of awareness about standards and requirements is a concern. Take, for example, waterproofing and the laying of ceramic tiles. Whilst there is an Australian standard for waterproofing, some commentators talk of insufficient emphasis during training about both the standard itself and the need for waterproofing detailing.
Geoff Hanmer, managing director of architecture firm ARINA and an adjunct lecturer in architectural construction at the University of NSW, says the industry is performing poorly – especially with Class 1 buildings (detached homes and townhouses) and Class 2 buildings (apartments).
Whilst the Opal case involved structural issues, Hanmer says the most common problem is waterproofing – along now with cladding. In Sydney, he says Sydney Harbour and its river system has a large number of blocks stepping down from the top of the ridge toward the water which feature large terraces with living spaces underneath. In almost all of these cases, Hanmer says waterproofing membranes which have been laid under tiles will fail within five years.
In particular, Hanmer says there are problems with Section F of the Code – Part 1 of which deals with dampness and waterproofing. This, he says, is vague and affords little guidance about the standard of performance which must be met. Rather than have a clear statement that buildings must be waterproof, he says the section contains a range of performance requirements which could be subject to interpretation. In FP1.4, for example, the NCC contains a requirement that roofs and external walls must prevent the penetration of water which could cause unhealthy or dangerous conditions. What, he asks, is an ‘unhealthy or dangerous condition’?
More broadly, Hanmer talks of concerns with both the Code itself and with how building ministers and regulators are discharging their duties.
On the Code itself, Hanmer says this places too much weight on innovation and should instead afford greater emphasis to safety and consumer protection.
On ministers, Hanmer describes a failure to act on issues raised in the Shergold & Weir report. He echoes frustration expressed by others such as the Australian Institute of Architects about the weakness of the most recent communique which followed the last Building Ministers Forum on February 8 – a communique he describes as ‘nothing’.
As well, he says the Australian Building Codes Board and state based regulators have failed to drive implementation of the Code.
(Established under an intergovernmental agreement in 1994, the role of the Australian Building Codes Board is to develop and maintain the National Construction Code and to promote awareness about the Code and its requirements. The ABCB itself does not have responsibility for ensuring that building regulations and NCC requirements are complied with. That task rests with states and the relevant building regulators in each state.)
Others offer different perspectives.
Phil Dwyer, chief executive officer of the Builders Collective of Australia, describes a system in disarray. Dwyer says problems involve weak licensing regimes, a lack of enforcement of existing regulation and a problematic system of builders warranty insurance.
On licensing, Dwyer says inadequate regimes have led to practitioners being able to obtain licences without being able to build properly. In Victoria, for instance, a 2012 report into builder registration found that applicants who failed core stages of competency assessment were allowed to advance to later stages whilst lax administration often saw applicants either sitting the wrong type of test or not taking a test at all.
On enforcement, he says a lack of action from bodies such as Fair Trading NSW or the Victorian Building Authority means that few builders or tradespeople face fear about disciplinary action if they do the wrong thing.
On builders warranty insurance, Dwyer says this makes the builder alone accountable – not architects, engineers or others whose design or workmanship may contribute to problems.
“The whole system is in disarray,” Dwyer said.
“While there are any number of good builders out there who don’t’ have problems, we have an enormous amount of who you refer to not as builders because they are incapable of building a proper building.”
“That is shown up in so many areas.”
Speaking from a viewpoint of owners, Chris Duggan, President of Strata Community Association (NSW), talks of a lack of accountability within the sector along with a gap whereby financial responsibility for rectification of defective work is often left to consumers.
Duggan says some defects will inevitably occur because of the scale and complexity associated with apartment complexes. In fact, he says the 85 percent defect figure above may be an understatement and that defects occur in almost all apartment complexes.
The problem, he says, is that consumers are often left to pay when substandard work occurs.
“I think on reflection the 85 percent of buildings containing defects is a very conservative figure,” Duggan says.
“That’s is played out practically by the experiences of our members …. Anecdotally, I would classify that as close to 100 percent of (apartment) buildings which have defective workmanship or materials on completion.
“That’s in some ways to be expected based on the type of buildings and the scale and complexity of the way they are constructed.
“What hasn’t played out well is the total lack of responsibility and the widening chasm which has occurred between consumer rights and the building development industry which has eroded over time to see the consumer be the one with the least rights but the most obligation to be responsible for rectification post-completion of these buildings.”
Duggan says there are positives. Many builders demonstrate goodwill and willingly attempt to rectify problems, he says. Several developers have dedicated defect handover teams, transition managers and people who stay back to assist owners after completion. Ongoing expansion and development of the strata management profession means that many body corporates now have trusted and experienced advisors in their strata manager when problems arise.
Nevertheless, concerns remain.
First, constrained timeframes under the statutory warranty scheme make negotiation of acceptable outcomes difficult. Under the law in New South Wales (laws may vary in other states), owners of homes within apartment complexes which are four storeys in height or greater are not covered under the state’s domestic building warranty insurance scheme. Instead, these owners and their owners corporations are left to rely on statutory warranties which are provided for under the NSW Home Building Act 1989. Under this regime, builders are forced to warrant that dwellings will be fit for occupation and that workmanship and materials used are suitable and of good quality.
For owners to access this scheme, claims must be lodged within two years for non-major defects or six years for major defects. Given the effort involved to perform an inspection (typically accessing all of the apartments), prepare reports, obtain quotes and negotiate with the builder – all at a time when the owners corporation itself is only newly formed – Duggan says these timeframes can be difficult to meet. Where they are not met, owners cannot use the warranties and are forced instead to rely on expensive common law litigation.
This, he says, places owners corporations under pressure to negotiate an outcome before the timeframes elapse and make negotiating a cooperative outcome more difficult.
On a positive note, Duggan says moves by the NSW government as of the start of last year to require developers to lodge a bond equal to two percent of the building’s construction contract price to cover defects which are identified during an inspection performed between fifteen and eighteen months after the date of the building’s completion is a step in the right direction.
Second, Duggan describes a lack of clarity about who is responsible when defects occur. Determining whether responsibility lies with the builder, developer, subcontractor or anyone else is often difficult, he says. This is especially the case with ‘design and construct’ type contracts, which due to their nature and complexity lean more heavily toward design solutions which are more ‘builder-led’ than being guided by developers or consumers. On this score, Duggan describes a tendency to place excessive blame on subcontractors, whom he says are lack visibility and are often ‘thrown under the bus’, when things go wrong.
Next, Duggan says the law has failed to protect consumers from builder insolvency. Where this happens, owners can be left without anyone from whom to claim recourse. This means they are forced to join multiple parties during litigation in order to reduce their dependence upon claims against individual parties.
Despite the aforementioned goodwill of many builders to rectify defects, finally, Duggan says we have created a system under which defects are normalised. Instead, complexes riddled with defects should be the exception rather than the rule.
He says the Opal case has shone light on a system which has cracks and needs review.
Consumer advocate Anne Paten, who leads the Victoria Building Action Group, is more pessimistic still.
Pointing to data in Victoria from the former Building Commission (replaced in 2013 by the Victorian Building Authority), Paten says the number of home building disputes rose from 35,000 in 2002 up to 256,000 in 2011 – a number she says means that 38 percent of all residential building consumers are impacted by building disputes. Drawing on her own experience in helping consumers who have been impacted by substandard building, Paten says that percentage nowadays would almost certainly be higher
Paten describes a system set up to fail by politicians and regulators who are influenced by large builders and which fails to deliver protection for either subcontractors or consumers.
On specific issues, she talks of a ‘lawless’ industry in which a lack of enforcement means that those who do the wrong thing are rarely punished.
As well, she describes a tendency for builders to shift risk and blame onto subcontractors – many of whom she says are not sufficiently paid to undertake work effectively. Citing one recent case with which she is familiar involving a concrete pour where the slab had failed, Paten says the concreters had understood what would happen but were acting on instruction from the builders and were limited in what they could do by the amount they were paid.
Furthermore, Paten talks of a lack of willingness to change. She cites statements reported by The Guardian in January by former NSW Treasury Secretary Michael Lambert, who was commissioned by the NSW government to look into failings of building regulation following a fire at the Bankstown apartment complex in 2012. Years after his report, Lambert said most of his 150 recommendations have languished.
Going forward, Duggan wants a ‘root and stem’ review of the development cycle with a greater focus on consumers as end product users. This would involve assessment of all steps in the process to ensure that consumer interests are afforded adequate focus throughout the chain of responsibility.
As well, there must be a process for defect rectification which is timely and cost effective. Time will tell, he says, how much impact the defect bond scheme referred to above will have in this space.
Third, responsibilities throughout development and construction must be clear.
Hanmer, meanwhile, would like Section F changed to make clear that all buildings must be waterproof and to spell out the numbers of years in respect of which they need to be waterproof.
More broadly, he wants ministers to drive implementation of the recommendations of the Shergold Weir report.
Dwyer would like practitioners throughout the building chain to be licensed and accountable. This includes designers, contractors, subcontractors and others.
He would also like better enforcement of existing regulation.
Others with whom Sourceable has spoken want action in further areas.
First, all building practitioners should be required to undertake a mandatory course (one or two days) in the National Construction Code and how it operates. Work currently underway to make that Code more user friendly should continue – including through an online platform of NCC related education. Greater clarity is also needed around the role of fire engineers. This includes clarifying their responsibilities and the qualifications which are needed for this role.
Above all, there is agreement about the need to implement all recommendations of the Shergold Weir report. Earlier this month, the Building Ministers Forum published an implementation plan in which all states and territories outlined how they will approach this.
Australia’s performance in delivering safe and reliable buildings leaves much to be desired.
To overcome this, strong action is needed.