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Cracked towers spark widespread safety fears about high rises: poll

Eight in 10 Sydneysiders have safety concerns about the structural soundness of high-rise apartment buildings in the wake of the crisis sparked by the cracked Opal and Mascot towers. An Ipsos poll of residents for advocacy group the Committee for Sydney found the quality of construction and the structural integrity of towers were by far their biggest safety concerns, followed by fears of becoming trapped in a fire. Both easily outranked crime as major concerns. Of those surveyed, 36 per cent were concerned and 48 per cent a little concerned about the structural integrity of high-rises. Only 16 per cent did not have any safety concerns. Karen Stiles, the executive officer of the non-profit Owners Corporation Network, said there needed to be “root and branch reform” of the building industry to restore public confidence. “We need rigour in the system to ensure that buildings are delivered fit for purpose,” she said.
The Sydney Morning Herald
Matt O'Sullivan

'Opal' Law to Fix the Shonks

Developers and builders who have been "red flagged" will not be able to sell high-rise apartments without a new mandatory inspection.  It is a move the state government desperately hopes will avoid a repeat of the Opal Tower and Mascot Towers defective building debacles. The inspections are part of an interim measure to prevent homebuyers from being stuck with a poor quality apartment.
The Daily Telegraph
Linda Silmalis

Unit Dwellers Powerless to Stop Electricity Rip-Off

People living in apartments are being treated as “second class citizens” by paying more for electricity after the state government abandoned plans for reforms which would have saved people thousands of dollars on power bills.  The NSW government is being blasted for allowing developers and electricity providers to continue to run monopolies in new buildings. Owners Corporation Network's Karen Stiles said the government had let down unit owners.
The Daily Telegraph
Ben Pike

One year on, Opal Tower still a construction zone

On Christmas Eve last year, Jenny (not her real name) carried her baby down to the ground floor after being told to evacuate Opal Tower, moments after she heard a loud bang while she was in her apartment. "They told us all to "back off, back off"," she said. "The police said the building was going to fall down and that we had to walk away from the building." Nearly seven months later, she moved back for the first time since she left her Christmas cooking unattended in her kitchen. A year after its spectacular evacuation amid "cracking sounds", Opal Tower was still a construction zone for its 392 owners and residents while builder Icon hadn't fulfilled all its promises including making rental compensation to owner-investors who couldn't rent out their units. The Owners Corporation Network was disappointed with how the Opal Tower crisis was handled. "Some of these residents have been displaced for almost a year," executive director Karen Stiles said. "Self-regulation has failed spectacularly. Governments must step up and govern."
The Australian Financial Review
Su-Lin Tan

Taxpayers paid $200m last year to prop up government fund against dodgy builders

Taxpayers forked out more than $200 million last year propping up a NSW government insurance fund that offers consumers protection against dodgy builders in an industry so broken that private insurers have fled the market. And in an effort to bring taxpayer liabilities that have topped $600 million under control, the Government has proposed that compulsory insurance premiums on some new homes and renovations will almost double within 18 months. "There is no appetite from any insurer to provide this insurance or to cover designers and principal contractors," Greens MLC David Shoebridge, who led a parliamentary inquiry into building defects, said. "Home-building warranty insurance has an accumulated deficit of about $640 million, paid for by taxpayers." The Owners Corporation Network has argued that the "scourge" of phoenixing - where $2 companies are used to build apartments and are then wound up to avoid paying the defects bill - is contributing to the skyrocketing deficit and is why the market was abandoned by private insurers. A 2017 study by the network found that in 63 per cent of cases where the "insolvency" of a building company had triggered an insurance claim for defects, that builder simply continued working through another company. They also found that only 18 per cent of licenses to build homes in NSW belong to companies, but they account for 85 per cent of all insurance claims lodged due to insolvency. “There cannot be an innocent explanation for such an extremely disproportionate statistic,” Owners Corporation executive officer Karen Stiles said. The network is pushing for the licensing of builders and developers, with conditions including track records of financial performance.
The Sydney Morning Herald
Nigel Gladstone and Carrie Fellner

Small business flattened by 'dodgy' builders in phoenixing epidemic

NSW construction companies collapse at levels not seen elsewhere in the country with more criminal misconduct allegations made against them than in other states. Administrators found evidence of wrongdoing in 561 construction industry businesses that failed in NSW in 2017-18, reflecting a pattern of "phoenixing" that is difficult to prosecute because it is not illegal in all cases. Illegal "phoenixing" occurs when company directors move assets from one company to another to avoid debts or liability for issues like building defects leaving creditors with the bill when the company is liquidated. It costs the economy up to $5 billion each year. Australian Restructuring Insolvency and Turnaround Association CEO John Winter said phoenixing has been "endemic" for decades. "It's become a learned behaviour in the property market because it's gone on for so long (and) because nobody has really been prosecuted to any great extent," Mr Winter said.
The Sydney Morning Herald
Nigel Gladstone and Carrie Fellner

'Six-year nightmare': Shattered investors left with no one to sue for faulty units

A "defective" business model that experts say has reached epidemic levels in the NSW building industry is leaving investors financially broken. Aidan Ellis, 75, was stunned when the developer and builder of his apartment block could "walk away scot-free" after his companies went into liquidation midway through a battle over defects estimated to be worth in excess of $2 million. The "six-year nightmare" has forced Mr Ellis into temporary accommodation while his apartment is a demolition site. Stanton Legal told the inquiry that phoenixing was the “most significant factor” in the cascading number of defective buildings. Associate Professor Hazel Easthope from the University of NSW said it left fixing defects contingent on the “goodwill of those developers and builders”. Former treasury secretary Michael Lambert, who led a landmark review into NSW building regulations in 2015, said it was "very disappointing" that phoenixing hadn't been addressed. “It’s quite clear that the building regulation is defective,” he said.
The Sydney Morning Herald
Carrie Fellner and Nigel Gladstone

Builder blames engineer for cracks in Opal Tower

Builder Icon has pointed the finger at engineer WSP for the structural cracks that developed in Sydney's Opal Tower. It says the consultancy's design failures led to damage in the structural beams, which forced residents to evacuate the newly completed residential building and has made the units hard to lease.
The Australian Financial Review
Michael Bleby

New laws to protect off-the-plan buyers

NSW home buyers who purchase off-the-plan will be able to terminate contracts or claim compensation if they're materially impacted by changes made to their properties, under proposed changes announced by the state government. Property Minister Victor Dominello on Saturday announced the reforms aimed at creating stronger protections for off-the-plan buyers. "Buying off-the-plan has become increasingly popular. But there are risks involved, and buyers can't just rely on lavish display centres and glossy brochures," Mr Dominello said in a media release.
Channel 9 News
Liz Daniels

Hobart faces rental crisis as average households struggle to pay

Rental affordability has nosedived in Hobart over the past year, falling by 7.4 per cent and bucking the improvement seen in other capital cities, the latest Rental Affordability Index shows. Greater Hobart held on to its crown as the least affordable city in Australia for the second year running, as rents continued to climb amid stagnant wage growth. "Hobart is in the midst of a rental crisis, the worst in the country," said Ellen Witte, partner at SGS Economics and Planning. "The rents have been increasing by 10 per cent per annum over the last three years. No matter how hard you work, you won’t be able to keep up with price rises like this. "There is a lack of new supply, while stock is being lost to the short-term holiday accommodation market."
The Australian Financial Review
Nila Sweeney

New Zealand's cladding-affected buildings aren't a secret

Litigation funder IMF Bentham is drumming up clients for a combustible cladding class action in New Zealand, a task made easier by the fact that the two largest cities across the Tasman publicly list all buildings affected by the flammable polyethylene core panels. The lists show the addresses and extent of cladding and mitigation measures, where known, of each building. The public availability of this information casts further doubt on claims by Australian state and territory governments that to identify such buildings in this country would expose them to risks of arson or terrorism.
The Australian Financial Review
Michael Bleby

Lack of information on apartment defects leaves whole market on shaky footings

The litany of defects, poor building standards and regulatory failures has serious implications for apartment owners, occupiers and buyers alike. Fears of a loss of confidence in the sector have unfortunately come true. Our research suggests a lack of reliable information about building defects is a critical factor in the crisis. About a year ago, we started a research project with six industry partners in New South Wales entitled Cracks in the Compact City: Tackling Defects in Multi-Unit Strata Housing. The context is compact city planning policies and a rapid shift towards apartment living in Australian cities. The urban development strategies of NSW and other states rely on higher-density cities with many more multi-unit strata title dwellings. The human and economic impacts of the building defects crisis could undermine these strategies. Even with our resources, obtaining data on the extent and nature of defects in NSW apartment buildings has been a challenge. Individual buyers and owners must face even greater obstacles.   This lack of access to information poses a clear challenge to the principle of “buyer beware” that underpins property sales. The imbalance it creates between buyers and sellers is a prime example of what economists call “information asymmetry”.
UNSW City Futures Research Centre
Martin Loosemore Bill Randolph Caitlin Buckle Hazel Easthope Laura Crommelin

Apartment buyers holding out for a hero, says MP

The job of fixing the construction industry is too big for  just one person and NSW needs a standalone building commission, not just a single commissioner, to fix the state’s construction industry Greens MP David Shoebridge. And apartment owners have called on the goverment to close the loopholes that allow the developers of sub-standard buildings to shut up shop before they have to repair defects, and even “phoenix” into new companies intent on doing the same thing. The Owners Corproation Network (OCN), has issued a qualified welcome to Government amendments proposed to the Design & Building Practitioners Bill 2019 currently being considered by the NSW Parliament, saying they still want action on “disposable” developers and phoenixing. However, a spokesperson for the OCN, the largest organisation run by apartment owners for apartment owners, says the amendments to the Bill proposed this week “begin the vital process of providing much improved consumer protection for people buying new apartments”. “The Statutory Duty of Care proposals, in their revised form, more effectively deliver on promises made by Government before the State election and are most welcome” said OCN Chairman Philip Gall. “They restore some much needed building industry accountability to its consumers to the benefit of tens of thousands of new apartment owners” he says.
Flat Chat
Jimmy Thomson

'Commissioner in a superhero cape not enough': calls for building commission

NSW needs a standalone building commission, not just a single commissioner, to fix the state's troubled construction industry and give homeowners faith in building standards. That's one of the key recommendations in a new report from a NSW parliamentary inquiry into building standards calling for the establishment of a "sufficiently resourced" commission. It would be an "independent statutory body" led by the building commissioner with "broad powers" to oversee and regulate the construction industry, the report, released on Wednesday, says. The report also calls for statutory warranties for major and minor defects to be extended to a minimum of seven years and the Building Act to be overseen by a senior building minister.  
The Sydney Morning Herald
Alexandra Smith

What Members Say

"The whole strata community owes a huge debt of gratitude to you and the OCN executive. Much appreciated."

Robert, Darlinghurst

"I am very pleased with my membership of OCN, the discussions through sharing emails is very valuable in increasing my knowledge of strata living, the laws and EC responsibilities. I think I am better armed to tread the minefield of the managing agent responsibilities and the necessary action of the EC to monitor the contradictory interests of the agent."

Jim, Wollstonecraft

"I so appreciate being part of the OCN email forum. It provides a great opportunity for sharing ideas and learning"

Ingrid, Neutral Bay

"I must say that I have enjoyed and found consolation in the discussions that have been part of the email chain (forum). I did attend one general meeting and found that it was informative and the people "running the show" were knowledgeable and dedicated to the tasks that had taken on. In short, well done. You and the committee have and continue to support the Strata Community in a very professional manner."

Greg, Parramatta

"Nothing is easy in Strata World and we have been in building defects “mode” for some years – hopefully almost at an end but that process has been most demanding and difficult but again – greatly helped by the experience and wise counsel of other members of OCN."

Pat, St Leonards

"Keep up the good work, as many (if not most) strata schemes need your help, advice and representation at all levels of government."

Jann and John, St Ives

"I belong to OCN because of its professionalism.  I have found the meetings I have been to extremely well presented, to the point, and of course very topical and informative. Speakers on the whole certainly know their topic.  My role of Secretary last year was certainly assisted with the coverage regarding TPG & other subjects. Member newsletters are also of benefit as the topics are specific to strata matters."

Graham, East Balmain

I have enjoyed attending the quarterly OCN meetings and the exchange of emails between other Executive Committee Members and think OCN is playing an increasingly important role as a voice for strata dwellers and representing us at Government level. I wish the organisation continuing success in the future."

Pauline, Kings Cross

"The [forum] response to my question was amazing and really useful.  The OCN community is wonderful so thanks."

Jenny, Killara

"I would like to thank you all for the important effort that you are all putting in to look after apartment owners and tenants. It is so valuable and you are heroes. I would not have been able to deal with my duties as a strata chairman without your advice and assistance." 

Angela, Mascot

"The OCN is invaluable – many thanks."

Bill, Surry Hills

"OCN is proving invaluable"

Sue, Neutral Bay

"Thanks to all at OCN for your continuing efforts to keep us up to date with current strata information and advice...it has been very helpful to us"

Kate, Coogee

"When my wife & I first encountered a problematic Executive Committee I heard that OCN was a great help (from a Strata manager whom I knew) so we both joined and have gratefully used the on-line information sources. We continued to happily rely on OCN’s assistance when we progressed to Committee status & later as Chair & Secretary of our Committee. I still use OCN in my current role as Treasurer."

Peter, Chiswick

"Thanks to OCN for being such a rich resource of trustworthy information about strata matters."

Peter, Chiswick

"I wanted to extend my personal thanks for the very informative & interesting event today. The OCN team did an outstanding job in the organisation of this event & I enjoyed it thoroughly. The quality of speakers, the flow of conversation & interaction from the attendees - first class …& of course, the amazing Jimmy T - always a delight."

Sue, Epping

"OCN does a great job in providing a really valuable service to Strata owners."

Lois, Wollongong

"I am sure my appreciation of your good works is echoed by many in the Stratasphere. Keep up the good work."

John, Elizabeth Bay

"The OCN is probably one of the best, most informed and most informative groups I have been involved with."

Alan, Maryville

"Once again, being able to discuss such things through this forum, helps clear the mind, puts things into perspective and helps one to understand their rights and to form a strategy if needs be. As a simple EC member trying to do what is in the best interests of lot owners, I truly value OCN and am grateful."

Pamela, Point Lookout