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Apartment owner accuses ACT government of lax approach to regulating building quality

The ACT government’s lax approach to regulating building quality has “emboldened” developers, builders and contractors to cut corners and deliver substandard work, an Assembly inquiry has heard.

Access Canberra has also been accused of being a “friend of industry” rather than a “feared regulator”, as the government agency came under fire during the second day of public hearings at the ACT Assembly’s building quality inquiry.

Kingston Place resident John Grant, who appeared at the ACT Assembly's building quality inquiry on Wednesday. Picture: Jamila Toderas

 Kingston Place resident John Grant, who appeared at the ACT Assembly’s building quality inquiry on Wednesday. Picture: Jamila Toderas

The inquiry was ordered amid widespread community and industry concerns about the standard of building work during Canberra’s construction boom.
John Grant, a former chief executive of the Australian Building Codes Board, appeared at Wednesday’s hearing to detail his experience with what he described as “third-world practices” in construction and government enforcement of regulation in the ACT.

Mr Grant said Kingston Place owners had spent about $250,000 on expert reports and almost $400,000 on legal fees since 2014. The owners agreed to pay a levy on top of their strata fees to help fund the legal costs.

He told the hearing that money, time and considerable stress could have been saved had the developer and Access Canberra taken “prompt action” to rectify the problems when they were first identified.

Owners lodged a formal complaint with Access Canberra in August 2016, and Mr Grant said the regulator had twice stated that it intended to order the developer to fix the alleged defects,

Mr Grant said that never eventuated, meaning owners were left with “no other option” but to launch legal action. The proceedings are ongoing.

“This lack of action by the ACT government in responding to the problems and the many reviews that have taken place has merely emboldened shoddy builders, developers and tradespersons in the ACT,” Mr Grant said.

“The defects exist because those responsible for its construction and assuring compliance with the ACT government’s regulatory framework failed to deliver to the standards expected by the ACT community.”

Mr Grant said Access Canberra needed to be more aggressive in enforcing standards and punishing substandard work.

“The regulator cannot be a friend of the industry, it must be prepared to enforce,” he said.

“Access Canberra has to become a feared regulator. That doesn’t mean it has to be overzealous, but it means that shoddy builders need to know that if they are building shoddy buildings then they will be in the gun.”

Minister for Building Quality Improvement Gordon Ramsay did not respond directly to Mr Grant’s comments, but defended Access Canberra’s approach to regulation and enforcement.

The government has ramped up enforcement activity since the start of the year, including temporarily shutting down 32 building sites across Canberra.

“Each regulatory intervention by the regulator has an immediate impact on not only improving building quality through issues being rectified but also on hitting industry where it hurts – financially through mandatory rectification works and work stopping on sites,” Mr Ramsay said.

“It also has an important reputational impact.”

Morris Construction Corporation was contacted for comment.

The 100 submissions to the inquiry have laid bare the problems plaguing Canberra’s construction sector, with numerous accounts of structural defects in buildings, delays in constructions and owners being left out of pocket after companies collapsed.

The role of private certifiers has also been called into questions amid concerns about the potential for conflicts of interest.

Mr Grant, who oversaw the introduction of private certification while leading the building codes board, said certifiers should be appointed by Access Canberra, not private builders.

 

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ACT – Building nightmares revealed, ‘Scarred by the experience’

‘Scarred by the experience’: ACT building nightmares revealed

The extent of problems in the ACT’s construction industry has been laid bare, with accounts of shoddy construction work, building delays and owners being left out of pocket by broke builders detailed in submissions to a new government inquiry.

One legal firm said it had advised 80 property owner corporations in relation to building defects since 2010.

Kerin Benson Lawyers said that ACT government inaction effectively meant that apartment owners in buildings above three storeys had “no recourse against their builders whatsoever” to fix defects.

The ACT parliamentary inquiry has received 39 submissions to its investigation into building quality in the territory.

The submissions highlight wide-ranging concerns about a lack of regulation and oversight in the ACT’s building industry.

Detailed in the submissions are numerous accounts of leaking roofs in new properties, extensive construction delays and shock repair bills imposed on owners.

In one submission, Civium Strata division manager Pascal Deschanel listed an extensive number of faults with an unnamed 45-unit apartment block, whose builder and developer were both deregistered following its construction.

Among the defects were “extensive leaking to building and basement areas, rusting to steel supporting beams” as well as “major cracking to [the] basement retaining wall”.

The property owners had “very little opportunity for recourse” because the builder and developer were deregistered, according to Mr Deschanel’s submission.

A number of submissions also raised concern about the prevalence of “phoenixing” in the ACT construction industry.

The practice, which is illegal in Australia, involves a new company being set up to continue the business of another that has been deliberately liquidated to avoid paying its debts, including tax.

In their submission, Natalie Bice and Brendan Pratt explained how their builder went into liquidation shortly after they moved into their property, leaving them to fix more than 60 defects resulting from a shoddy build.

In the meantime, the builder had transferred all of its assets to a new business, meaning the couple could not chase it for compensation.

In another anonymous submission, a property owner said he had tried repeatedly to contact his builder before discovering it no longer existed as a legal entity.

The owner said he had been “scarred by the experience” of buying the “brand-new” apartment in 2013, and has “often hated living in the ACT as a result”.

“Since the serious issue of waterproofing and roof leaks has worsened, we have been living an emotional and financial nightmare,” the submissions read.

“I would urge the committee to consider the impact on my life, the financial stress, and the prolonged emotional affliction of this negligence and lack of accountability.”

Liberal politician Jeremy Hanson is chairing the parliamentary committee investigating the building industry.  Photo: Rohan Thomson

 Liberal politician Jeremy Hanson is chairing the parliamentary committee investigating the building industry. Photo: Rohan Thomson

The ACT parliamentary committee announced in April that it would investigate the territory’s construction industry amid growing concern about the quality of building work in new developments.

Submissions to the inquiry were scheduled to close on Sunday, but have now been extended until November.

A discussion paper prepared by the committee’s chair, Liberal Jeremy Hanson, said as much as $114 million could have been spent fixing building defects in the ACT in 2016/17, based on modelling from the University of NSW.

The paper also noted that Access Canberra received 525 complaints relating to planning and construction laws in 2016/17.

In its submission to the inquiry, Kerin Benson Lawyers said that number was an “underestimate”, given complaints made by owner corporations were on behalf of hundreds of owners.

The law firm also called out a statement in the discussion paper which said “every contract for the sale of a residential building and every contract to carry out residential building work” contains a warranty, unless the work is valued at less than $12,000.

“It is only true of contracts which were entered into on or after August 2017,” the submission read.

“This effectively means that currently in the ACT, no residential buildings above three storeys have statutory warranty protection.

“This means that many larger residential owner corporations have no recourse against their builders whatsoever.”

The legal firm argued property owners should be given “more tools to address building defects”, saying it would make developers and builders far more likely to change their behaviour.

The Owners Corporation Network said in its response that property developers needed to “move away from greed and towards a more balanced approach to the needs of the community”.

An ACT Government spokeswoman said it took the issue of building quality “seriously” and was already introducing reforms targeting dodgy practice.

“Recently, this has included introducing tests for those seeking a building licence, and retesting both those who have substantiated complaints made against them,” the spokeswoman said.

But Master Builders Association of the ACT Michael Hopkins said the ACT Government continued to renew to licences of builders with a “poor building history”.

Mr Hopkins supported a crackdown on “phoenixing”, a beefed-up complaints handling unit and the introduction of trade contractor licensing.

“On a modern building site, most of the construction work is carried out by trade contractors, who, with very few exceptions, don’t have minimum training requirement and don’t require a trade licence to set up business in the ACT,” he said.

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Britain to spend £200 million fixing combustible cladding

By Andrew MacAskill

London: The British government will spend £200 million ($375 million) to replace combustible cladding on the outside of high-rise buildings after some private developers refused to pay to make them safe in response to fire that killed 71 people.

Grenfell Tower, a 24-storey London social housing block, was engulfed in flames two years ago. Officials have said aluminium cladding with a plastic core contributed to the rapid spread of the blaze.

Smoke and flames rise from the Grenfell Tower building in London in 2017.
Smoke and flames rise from the Grenfell Tower building in London in 2017.CREDIT:AP

After spending months trying to persuade property companies to pay to remove the cladding with only limited success, the government has decided to step in with public funds to fix the cladding on about 170 high rise buildings.

Prime Minister Theresa May said although a number of private companies had acted, too many developers were continuing to pass on the cost of the work to people living in the buildings.

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Victorian residents threatened with huge fines and eviction over dangerous building cladding

Residents of one of the first buildings in Victoria to be audited for cladding claim they received threats of huge fines and eviction by the regulator if they didn’t remove it. (more…)

I’ve just discovered my building is covered in flammable cladding

Last week I found out that I am one of potentially hundreds of thousands of Australians who live in a fire-prone and unsafe apartment. (more…)

Dangerous cladding found on hundreds of Sydney apartment blocks

More than 400 buildings in Sydney may have high-risk flammable cladding installed, as authorities try and get on top of what could be a death trap. (more…)

‘Same as Grenfell Tower’: Cladding fears as fire rips through Melbourne CBD apartment building

Residents will be locked out of their CBD apartments for 48 hours after a vicious, fast-moving fire raced up dangerous cladding on the side of the Spencer Street tower. (more…)

Building Practitioners Board found Kitchener ‘Kitch’ Crespin guilty of thirty two allegations including two counts of creating false documents and forging the owners signature for a false claim in legal proceedings and creating a false contract document.

Kitchener Crespin – The Building Practitioners Board found the practitioner guilty of thirty two allegations in relation to three sites at Glen Iris, Cheltenham and Hughesdale. There were eight allegations relating to the Cheltenham site and were for breaching s16 for carrying out internal alterations for the removal of a wall and installation of structural beams for support prior to the building permit being issued. The practitioner also breached s31(1), s13(1) & (2) of the Domestic Building Contracts Act 1995 for having a non compliant contract, entering into a cost plus contract and not meeting the exceptions to do so nor containing a fair and reasonable estimate of the likely total money to be received under the contract respectively. (more…)

Cladding: A Troublesome Issue for Those Unable to Make a Decision

The fire that raced up the Lacrosse building in November 2014 fuelled by the combustible polyethylene composite external panelling appears no closer to a resolution after four years.
A VCAT hearing on 25 October 2017 was unable to determine who is responsible for the installation of the panels on the Lacrosse building with the owner’s corporation pursuing the builder (L U Simon), and the only agreement reached was a 30-day trial starting on 1 September 2018.

 

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State Regulators: Reckless and Dangerous

“Reckless and dangerous” describes how our biggest state governments are dealing with the current issues facing the building industry and what their questionable policies are now delivering or – more accurately – not delivering.

 

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