News | Owners Corporation Network


Victoria to fund cladding rectification of privately owned buildings

Victoria will fund the rectification of privately owned buildings with combustible cladding, a move that could cost billions of dollars and makes it the first state to take a step industry commentators said was inevitable.
The Australian Financial Review
Michael Bleby

Flammable cladding: Latest government move leaves owners with ‘no one to pay’

The Victorian government’s latest move to prop up the building industry could spell financial disaster for owners of apartments with combustible cladding. And that’s because  allowing building certifiers and inspectors to operate with insurance policies that contain cladding-related exclusions – leaves owners hoping for a payout with even fewer legal avenues to pursue.  Simon Lockrey, an industrial design lecturer at RMIT University who owns a property with non-compliant cladding, says owners – some of whom face repair bills of up to $3 million – feel like they have “been thrown under a bus” following the government’s latest move. The way he sees it, the decision shows the government cares more about greasing the wheels of industry than protecting the rights of citizens. “The signal it’s sending is that they just want the building industry to keep going… and that they don’t care how that happens,” he said. “Someone’s got to provide some serious leadership and say ‘enough’s enough, we need to stop this industry right now, fundamentally change it, and then keep going’. “Because if they keep doing things like this, it’s just compounding and compounding the pain.”
The New Daily
Euan Black

Immediate reforms: Triguboff's Meriton wants building industry change

Harry Triguboff's Meriton wants immediate reforms to the construction industry in NSW to stop substandard buildings from going up, as a growing number of experts argue the government should issue low-interest loans to apartment owners battling defects. The perception of a crisis in Sydney’s residential apartment market snowballed this week after the Herald revealed another evacuation of a unit block at Zetland, while the Premier conceded that self-regulation had failed. Stephen Goddard, a spokesperson for the Owners Corporation Network, said the possibility of low-interest loans was a “public conversation worth having to protect the interests of the innocent.” “Access to low interest loans, repayable over five to 10 years, is an important lifeline to consider,” he said.
The Sydney Morning Herald
Jacob Saulwick and Tom Rabe

How to avoid buying a dodgy apartment

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.
The Australian Financial Review
Jimmy Thomson

An elderly woman was advised not to return to her Charlestown apartment before her death on Sunday

AN elderly woman found dead on Sunday in her penthouse apartment at Charlestown's Landmark building received an anonymous letter exposing one of the ugliest secrets in the state's apartment building crisis. "Don't play the defenceless little old lady while you are stabbing everyone here in the heart. As if our and your levies are not high enough," said the letter in February, 2018 before the woman was forced to move out of her apartment in August for more than six months, while defects described as "dangerous and in need of urgent attention" were addressed. The Landmark's 59 residential apartment owners were levied thousands of dollars each for the repairs and the cost of a $650 a week temporary unit where the woman lived until February when the work was completed. She reluctantly returned after the letter warned "I'm living in hope that when you do move out you consider your options about coming back.  If I was you I would use this time to look for another place to live. You are so not capable of adjusting to strata living," the letter said. The woman, in her 70s, was found dead on Sunday after failing to answer phone calls or attend church. A cause of death is yet to be determined.
The Canberra Times
Joanne McCarthy

'No way of knowing' how many strata buildings in Australia could crack

The alarming rise in New South Wales apartment buildings found with cracks is a nation-wide issue that 'has been building over the last 20 years.' Strata lawyer Stephen Goddard from the Owners Corporation Network has told Sky News the discovery of cracks in three NSW buildings has raised alarm bells in the building industry. 'One building is an accident, two’s a coincidence and three is systemic failure,' he says. Mr Goddard has accused the building industry of being 'self-serving without oversight' and has called for a building commissioner to be appointed to regulate the industry. Mr Goddard also says there is 'no way of knowing' how many other buildings in NSW or Australia could be found with cracks jeopardising their structural integrity.

Danger Sydney apartment defects revealed in Zetland block

A third Sydney apartment block is under scrutiny over building and safety issues after it was revealed its residents were evacuated last year. Residents from the 30 loft-style apartments at 19 Gadigal Avenue in Zetland, in Sydney's southwest were evacuated late last year, while City of Sydney staff had inspected the building in February and found it had "extensive and severe water damage", a city spokesman said.   Stephen Goddard from the Owners Corporation Network also told 9News he was distressed after people were made homeless by the defects. "We have lived with building defects for the last 20 years, but we're now having structural defects that are a threat to live (with) safely - causing people to evacuate," he said. "(There is) no silver bullet solution - there's no 20-minute solution to this story."
9 News

'It hasn't worked': Premier admits Sydney's building industry is failing

Premier Gladys Berejiklian says the system of regulation in the building industry is not working, after the Herald revealed the evacuation of a third apartment building in Sydney. As the state opposition called for an immediate response to the growing number of building defects emerging in the city, Ms Berejiklian said she wanted to "assure the community that we know there's a problem. "We know there's a gap in legislation," she said. "We allowed the industry to self-regulate and it hasn't worked. There are too many challenges, too many problems, and that's why the government's willing to legislate." One of the reforms proposed by the Berejiklian government is the creation of a "building commissioner" position, which would have power to investigate construction sites. Ms McKay called for that role to be established immediately, and described the situation as a "ticking time bomb". "I think we will have more and more of these buildings come to light," she said. "Right now we have no building commissioner in place because this government won't release the details. "If you are serious ... then tell us about the building commissioner. Put that commissioner in place right now, ensure they are resourced, and ensure they have the power to be there."
The Sydney Morning Herald
Jacob Saulwick Megan Gorrey and Lisa Visentin

Zetland apartments abandoned in secret evacuation over 'severe' defects

An inner Sydney apartment building remains abandoned eight months after its occupants were evacuated over water and fire safety defects, in revelations expected to deliver a fresh blow to confidence in the city's building standards. The emergence of a third residential unit building with severe defects will intensify pressure on the state government to address concerns about building standards. Cracking forced the evacuation of Sydney Olympic Park's Opal Tower on Christmas Eve and the Mascot Towers on Bourke Street last month. Less than a month ago, the minister responsible for the building industry, Kevin Anderson, said there was no "great cause for alarm" about building quality with no need to rush into reforms. Owners Corporation Network spokesperson Stephen Goddard said there has been a "conspiracy of silence" around building defects for years due to confidential legal settlements and owners' fears of damage to property values.
The Sydney Morning Herald
Carrie Fellner Laura Chung Jacob Saulwick

How cost-cutting makes buildings fail

Waterproofing isn't unique. In a cut-throat construction industry where price trumps everything and every player in a cascading hierarchy of relationships is trying to minimise costs, there's relentless pressure on lower-order players to accept less. "There is this practice of subcontractor shopping," said industry veteran John Murray.  "A contractor will seek prices from subcontractors and then go to the lowest subcontractor - or even its preferred subcontractor who may not have the lowest price - and ask it to further shave its price." The consequences of all the cost-cutting and resulting shortcuts are now all too visible as state governments prepare themselves to pay hundreds of millions - some estimate billions - of dollars to rectify the buildings built carelessly, with combustible cladding that fails to meet building code standards or defects such as cracking.
The Australian Financial Review
Michael Bleby

Mascot Towers incident: Negative stigma could impact unit prices in troubled building

Unfortunate owners in the Mascot Towers complex could see up to 40 per cent of their affected units’ value wiped away due to negative stigma attached to the building. In scenes similar to what happened with the Opal Tower in Sydney Olympic Park, residents were evacuated on Friday night and structural support added to the building in Mascot after it was noticed that cracks in the building were getting wider. “Consumers have nowhere to go in these sorts of situations, there’s nobody for them to sue, there’s nowhere for them to turn,” Stephen Goddard, a spokesperson for the Owners Corporation Network, told the ABC. “Anybody looking to purchase in a building less than 10 years of age is foolish because the defects will not have yet surfaced. “People have more consumer protection buying a fridge than a million-dollar apartment.” Apartment owners within the building will now need to pay for repairs, likely through increased strata levies. Of the 392 units in the Opal Tower building, 155 of them are still unable to be reoccupied six months after it was evacuated on Christmas Eve last year. “We’re now seeing owners confronted with the possibility that their investment … may be lower than their outstanding mortgage,” Mr Goddard added.

‘Daunting’ reality for strata lot owners after Mascot Towers evacuation

Strata lot owners could have to pay for building repairs after the Mascot Towers residents were evacuated. Engineers evacuated the building after they became concerned about cracks in the walls of the 10-year-old apartment complex. Apartment owners will reportedly have to foot the bill for repairs as the building is too old to come under warranty protection. Owners Corporation Network President Gary Petherbridge tells Ross Greenwood the problem is systemic. “People shouldn’t be buying off the plan anymore, you’re better off to wait 10 years until the property is sorted out.”  
Ross Greenwood

Boycott: Is it time we had an off-the-plan ban?

The advice from Owners Corporation Network spokesman Stephen Goddard could not have been more blunt: Don’t buy apartments off the plan. His actual words in an opinion piece in the Sydney Morning Herald (Sydney's dirty strata secrets emerge through cracks in Mascot Towers -See post below for full story) were “prudent purchasers cannot buy strata ‘off the plan’ or, given that most defects emerge within a decade of construction, any residential strata building less than 10 years of age.” Mr Goddard, a strata lawyer and veteran of many a unit block battle against dodgy developers, has a point, notwithstanding the fact that the Mascot Tower that started falling apart a couple of weekends ago is actually 11 years old. All that shows is that even extreme caution will not protect you if you put your money into the wrong chunk of concrete and glass. The OCN and this website and newspaper column have been making those sorts of noises for years, largely ignored or dismissed by a conga line of training-wheel Fair Trading ministers, some of whom have in the past seemed more concerned about the party donations (rather than guarantees) that they could extract from developers. Their consistent failure to impose any sort of quality control on developers and builders have led us into a situation where we are simply waiting for the next brick to fall.  The one thing on which all observers agree is that Opal and Mascot Towers are not the last examples of government and corporate failure that we will see.
Flat Chat
Jimmy Thompson

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