News | Owners Corporation Network


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

Sydney neighbour's $120,000 email spat defamation payout overturned

A Manly apartment building tenant has won her appeal against paying $120,000 in defamation damages to a fellow resident who claimed her email implied he was a "small-minded busybody". Gary Raynor, chair of the Watermark building's strata committee, sued Patricia Murray over a May 2017 email to him, other residents and her real estate agent in which she asked him to stop emailing her about locking her mailbox. Judge Judith Gibson awarded Mr Raynor $120,000 in damages in May after finding the meanings were conveyed and that Ms Murray had not established a defence to any of them. But the NSW Court of Appeal on Wednesday allowed her appeal and set aside the judge's orders. It also ordered Mr Murray to pay her legal costs.
The Sydney Morning Herald
Margaret Scheikowski

Why one Southbank resident keeps baseball bat near his door

After a stranger wandered into his apartment, Marinus van Onselen now lives with a baseball bat near his front door. That, combined with naked pool parties, drunken scuffles and large groups squeezing into small apartments brought on by the rise of short-stay accommodation providers, has left residents of his Southbank high-rise feeling afraid. They're out of pocket too. Freshwater Place's body corporate has invested more than $395,000 this year alone in installing CCTV and listening devices in corridors. The building's insurance excess has increased five-fold after a spike in claims over the past two years.
The Australian
Charlotte Grieve

Trust issues: Can platforms like Airbnb regulate themselves?

Australian residents' groups have rejected Airbnb's promise to overhaul verification procedures and prevent unauthorised parties at properties booked through the site, saying community trust issues caused by the rise of short-term rentals can only be fixed by independent regulation. "We would like to see a strong, effective public record of everyone participating [in the space]. To let your property, you'd need to be registered," chair of the Owners Corporation Network Phil Gall said. "'Party houses' are the tip of the iceberg - there are bigger regulatory issues at play here." The network represents owners and residents in strata schemes in New South Wales.
The Sydney Morning Herald
Emma Koehn

Lack of government enforcement in NSW construction industry propping up 'bad behaviour'

A lack of government enforcement is propping up "bad behaviour" in the New South Wales construction industry, Australia's peak building union says. The Construction, Forestry, Maritime, Mining and Energy Union has told a NSW government inquiry the state's building system is rife with compliance issues. CFMMEU president Rita Mallia said the NSW regulatory system made it difficult to track down and punish those responsible for poor building. "The whole system is designed to prop up bad behaviour," she said. The peak body for Australian public works engineers earlier told the inquiry unqualified engineers who can't work in other states are flocking to NSW. John Roydhouse, the chief executive of the NSW division of the Institute of Public Works Engineering Australasia, urged the state government to adopt a professional engineers register. "The problems we have in not having a registration scheme will become apparent in NSW as other places move down that pathway," he said.
9 News

Airbnb exposed as driver of $9b tax shortfall

Rorts and errors by short-term rental property owners are a “key driver” of a $9 billion income tax shortfall under investigation by the Australian Taxation Office. Some landlords are failing to disclose annual income of more than $70,000 from rental platforms used by an estimated 190,000 individuals renting out homes or apartments, according to ATO analysis. Booming short-term rentals are, according to research group IbisWorld, providing cheap and convenient accommodation, intensifying pressure on hotels, motels and caravan parks. In some cases, the owner of the property is not aware it is being sublet by a tenant. Bnbguard, an agency that helps strata schemes target unapproved holiday lets, has identified 110 operators in NSW who each have more than 30 properties listed on Airbnb. One host alone has listed 420 properties online.
The Australian Financial Review
Duncan Hughes

'Rushed and bogus': Council and developer accused over new tower safety scandal

A Ryde councillor lobbied on behalf of a property developer for the final sign off on an apartment building that failed basic fire safety standards in a "rushed" and "bogus" approval process, a whistleblower has told a parliamentary inquiry. City of Ryde council then "unfairly" pushed the burden of fixing the fire defects onto "unsuspecting owners" who had just paid as much as $1 million for their industry-lauded waterside homes, according to the complaint from an anonymous council employee. While the inquiry into building regulation is yet to fully investigate the allegations, documents obtained by the Herald appear to support the fire safety aspects of the complaint. The inquiry has redacted the names of the individuals involved, and the allegations are not dated in the tabled documents.
The Sydney Morning Herald
Carrie Fellner

Embedded electricity networks see apartment dwellers paying too much for power

If you live in an apartment block with an embedded power network, you are probably paying too much for your electricity. Key points: A new study shows that customers on embedded networks generally pay higher electricity bills Embedded networks are used in multi-resident complexes such as apartments, retirement villages and caravan parks A contractor or owners corporation buys power in bulk and on-sells to individual residents A new study by the Victoria Energy Policy Centre, commissioned by the Victorian Government and released exclusively to 7.30, has found customers on embedded networks in Victoria are paying up to $439 a year more than the best deal they could get if they were able to switch retailers. A typical customer on an embedded network could reduce their bill by 36 per cent if they were able to switch to the best deal on the market.
ABC News
Liz Hobday

Industry split on WA strata manager qualifications

Signalling the biggest shake up of strata regulations since the Strata Titles Act was introduced in 1985, new strata reforms seek to modernise the industry. One way the reforms aim to do this is by introducing minimum education requirements for strata managers.  OCN strongly supports this and the SCA WA call for even higher standards.  Buildings, facilities and communities are evolving at an exponential pace and managers need the skills to manage the complexities.
The West Australian
Rhys Prka

Knowing who to blame is cold comfort to owners of defective apartments

According to NSW Better Regulation Minister Kevin Anderson the Design and Building Practitioners Bill, introduced to Parliament on Wednesday, marks a "monumental step in the reform of the building and construction industry". While we can be thankful something is finally being done, the minister’s assertions are overblown. The bill will have no immediate impact on confidence in the building market because it can only begin to apply to new buildings after about 2022 and it will have no impact at all on existing housing stock. If recent research by NSW, Deakin and Swinburne universities is accurate, more than 70 per cent of strata units less than 30 years old have defects.
The Sydney Morning Herald
Geoff Hanmer

NSW building reforms 'step one of 100' to restore confidence in sector

The government's latest plan to lift construction standards across NSW is a step in the right direction, but will fail to address a lack of transparency and enforcement in the sector, lawyers say. Amid rising pressure to implement large-scale reform in the home building industry, the government this week introduced the first tranche of its construction sector reforms to Parliament. Owners Corporation Network executive officer Karen Stiles said the changes were “step one of about 100” and agreed further reforms and market leaders were needed. “Industry also needs to do its part in rebuilding confidence. Failure to effect a cultural shift will result in an economic armageddon,” she said.
The Sydney Morning Herald
Megan Gorrey

Magnesite floors may be a bigger problem than cladding

As governments and the building industry focus on managing combustible cladding issues, another crisis is looming over the use of a flooring material known as magnesite, experts warn. Potentially affecting tens of thousands of apartments built from 1960 through to the 1980s, the little-known magnesite-related defects are also more expensive and invasive to fix. Marton Marosszeky, director at BCRC, a group of specialist consultants in materials for construction, said owners of older apartments needed to be aware of the problem.
The Australian Financial Review
Nila Sweeney

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 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