11 JULY 2019

With state planning ministers meeting this month, informed in part by a behind-closed-doors meeting of development “stakeholders” in NSW last week, you can be sure that building defects in their myriad forms will be on their agenda. From the crumbling Opal and Mascot towers in Sydney to the estimated thousands of apartment blocks across the land that are clad in deadly flammable composite, there will be plenty to talk about. But the problem may be even worse than we thought.

As was revealed in a Sydney Morning Herald story last week, millions of dollars in defects claims are quietly being settled out of court. But that only works if there is someone there to sue. If the developer, like Monty Python’s parrot, has ceased to exist, then the apartment owners can be left high and dry.

Leading strata lawyer Stephen Goddard, who is also spokesman for the Owners Corporation Network, the peak body for strata owners, is in no doubt what the main issues are. He says, in broad terms, it’s the lack of a duty of care. Under current law, builders have no responsibility to the purchasers of apartments – their responsibility begins and ends with the developer. If that developer has gone into voluntary liquidation (often to “phoenix” into a new entity) there is no one there to sue or settle with.

This is such a massive hole in consumer law that it represents part of the business plan of many small, self-styled developers and get-rich-quick schemes. Goddard believes the largely unregulated development industry – anyone can call themselves a developer – needs proper certification … and fast.

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Jimmy Thomson