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New rating system could help buyers avoid dodgy apartments

The New South Wales government is planning to introduce a new ratings system for builders and developers in an attempt to protect consumers from buying dodgy apartments. The tool will create a risk profile for every planned project based on the track records of the builders, designers, developers and certifiers involved in the development. And the legal reforms accompanying it will give the government stronger powers to stop occupancy certificates being issued on dodgy buildings. Karen Stiles, chief executive of the Owners Corporation Network (OCN), described Mr Chandler’s ratings system as an “exciting” development. “It will assist prospective purchasers to make better purchasing decisions. And it’s certainly going to help the regulator identify risky projects early on,” Ms Stiles told The New Daily. “Because the problem we’ve had for so many years is that everybody’s tried to mop up the problems at the end, instead of preventing them in the first place.”
The New Daily
Euan Black

NSW plans ratings tool for developers, builder and certifiers

Developers, builders and certifiers will be rated on their record of building failures, finances, complaints, insurance claims and other such factors under a new tool being developed by NSW Building Commissioner David Chandler and data company Equifax. "This will start to join up the players," Mr Chandler told The Australian Financial Review. "When you look into a project that is about to be developed, it’s useful to people like regulators, to people like banks, to people like insurers and people who might be purchasing off the plan, to have some sort of view of what is the composite riskiness of the players who are about to make the project. Consumer advocates welcome the idea. "It’s part of a jigsaw that’s starting to come together to re-regulate and recalibrate the industry," said Karen Stiles, chief executive of the Owners Corporation Network. "This is a really powerful tool for the building commissioner to identify risky developments and be able to act on that before they become the problem of the innocent purchasers."  
The Australian Financial Review
Michael Bleby

Airbnb-style accommodation in Broome targeted in council crackdown

Authorities in the West Australian tourist town of Broome are cracking down on Airbnb and other sharing economy accommodation, telling owners to stop operating or face enforcement action. It is understood the clampdown will mainly affect people who rent out whole apartments and houses in Broome's residential suburbs, which is not allowed under local laws. People sharing a room or part of their property with visitors will now be forced to seek approval as a bed and breakfast and comply with rules in relation to things like parking and swimming pools. "We're not really the same as a bed and breakfast," the operator said. "We're just doing home-sharing on a home-sharing platform. "Formal B&Bs have got advertising signs out the front, which is not something that we intend to do."
ABC News
Claire Moodie

Unit buyers to pay for ratings check on dodgy apartments under reforms

Having grappled for more than 12 months with the fallout from three evacuated buildings and abandoned apartments that have trashed confidence in the industry, the Berejiklian government announced on Monday new powers for the Building Commissioner to use the rating tool to select sites to audit and halt dodgy apartment projects. In a blog post last week, Building Commissioner David Chandler said: "By 2025, it should be possible to provide a high level of compliance and resilience confidence for new buildings." Karen Stiles from the Owners Corporation Network, which represents apartment buyers, said the power for the Building Commissioner to block occupation certificates from being issued was "game changing".
The Sydney Morning Herald
Carrie Fellner and Nigel Gladstone

Risk rating system for builders proposed to prevent defective towers

A risk-rating system for builders and new powers for the building regulator to stop suspect high-rise apartment towers are among measures the NSW government wants introduced to avoid further incidents like Sydney's cracked Opal and Mascot towers. The government used the release of the measures to renew pressure on Labor and the crossbench to pass its building reform legislation, which stalled in the NSW Upper House late last year. While the risk-rating system can be more easily rolled out, the legislation needs to be passed to give NSW Building Commissioner David Chandler the power to withhold occupation certificates from developers. Without a certificate, a developer would have to refund deposits on apartments because residents could not move in. Karen Stiles, the executive officer of the non-profit Owners Corporation Network, said the measures were an important step towards re-regulating and recalibrating the industry but more needed to be done. "We have to get the Bill through the Upper House. We need regulating of other engineers and disciplines," she said.
The Sydney Morning Herald
Matt O'Sullivan

Blitz on dodgy developers of high-rises

NSW regulators will be given powers to block suspect developers from erecting high-rise unit towers and builders will be subjected to a quality-rating regime.
The Australian

'Angry, depressed': Owners in dire straits years after roof ripped off

Robin Son had planned to move out of his parents' West Ryde home soon after he bought an apartment in a Lidcombe building in late 2014. But ever since a storm ripped off the building's roof in January 2016, causing millions of dollars in damages, the 34-year-old has been unable to afford to move with his wife into the two-bedroom apartment they poured their savings into. Instead, they have been forced to rent it out so they can cover strata fees, which have soared five-fold to pay for the building's repairs, and a large mortgage.
The Sydney Morning Herald
Matt O'Sullivan

If you’re a dodgy builder in NSW get set for a new risk tool that will expose you

By 2030 the NSW construction landscape will be very different, and it won’t much matter what the industry’s past gatekeepers think they can do to maintain the status quo. The forces driving this are different. Here are some reasons why: Loss of confidence – Construction’s customers have lost confidence in both the industry’s public and private institutions Hype – Promises of how new legislation, the latest construction technologies and changing construction methods would change the game have underdelivered Global and digital forces – The influence of local jurisdictions has been permanently diminished by the changing forces of a global marketplace, smarter buildings and the digital economy Educational failings – Outdated vocational and tertiary education models have failed to adapt to deliver a modern construction workforce. These short comings have been aided by professional bodies who have tolerated these indifferent offerings New tools with potential to join up information such as planning, strata registration and insolvencies have the potential to apply a series of data validation and matching capabilities to join up elements such as planning consents, strata plan registrations and insolvencies with developer, builder and certifier histories. Stage two of this data matching is anticipated to extend to consultants, registered training organisations and manufacturers. Imagine a tool like this being able to join up all construction phases from development applications, coming strata plan registrations, settlements and past defaults. Life for those habitual phoenixing players would become sharply more difficult. Beyond these risk tools are those that can create assurance of supply chain trustworthiness and certification. By 2025, it should be possible to provide a high level of compliance and resilience confidence for new buildings.
The Fifth Estate
David Chandler

Certifier accused of letting people live in tower while 'still a building site'

A prolific building certifier is fighting to save his career after allegations he allowed people to move into two Sydney apartment towers while they were "still a building site". Valerio "Vic" Lilli is challenging the Building Professionals Board's decision to reprimand him and strip him of his accreditation for five years for signing off on the "Atmosphere" buildings at Castle Hill. The Building Professionals Board has alleged the private certifier employed by Toplace, Mr Lilli, issued a final occupation certificate allowing people to move into the towers while they were a building site in 2018, posing a "hazard" to residents.  
The Sydney Morning Herald
Carrie Fellner

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

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