Too many developers are failing to build good quality apartments because they know, in a hot market where so many buyers are looking for investment units, they could “almost get away with murder”, a leading strata lawyer has claimed.

And at a time when governments are increasingly relying on a construction boom to prop up the economy, politicians aren’t keen to slap more regulation onto an industry that could brake its progress.

Special counsel Suzie Broome of lawyers Sachs Gerace Broome says she’s been alarmed by the shortcuts being taken by some unscrupulous developers keen to cash in on high levels of demand. “It’s amazing how many buildings today aren’t fire compliant from the get-go,” she says.

“They haven’t had fire dampers installed in the ceilings or had fire stops fitted between walls to stop the spread of fire in an emergency – things that aren’t easy to spot. Whenever the market encourages an expansion in the number of apartments, we end up with lower quality.

“In the rush to buy into the hot property market, buyers are spending less time considering the contract and the actual product than they do visiting a car yard to buy a car. As a result, developers and builders are escaping scrutiny to the extent that they could almost get away with murder.”

Engineer and project manager Robert Hart, of Engineers Australia, says his industry is also increasingly worried about the standards of construction of some of the apartments now being built, especially for the investment market.

“We have some top-tier developers and builders who do things by the rules, but a lot of shonky developers who don’t play by the same rules as the rest of us,” he says. “They don’t understand about standards and don’t care, and are doing very bad work. They’re only interested in the dollars they can earn.

“Then, as soon as a building is completed, and the units are sold, they become a phoenix company so they can avoid hanging around to fix the defects afterwards.”

The good top tier includes developers such as Mirvac, Brookfield Multiplex, Frasers and Built, Hart says. And, on behalf of developers, Stephen Albin, CEO of the Urban Development Institute of Australia NSW, says there are also some great mid-level developers such as HELM, Hyecorp and Cornerstone.

But it’s a few others that cause the problems, Albin argues, and they’re in a small minority. “I think at the moment we’re seeing a lot of apartments coming on to the market and there will be a couple of bad eggs in there who are not providing the quality required,” he says.

“There will be developers under financial pressure who might not be well known in the industry and there won’t be much known about them, and buyers should be careful about who they’re dealing with. People need to be sure they’re reputable.”

Yet bad developers are flourishing through a lack of government regulation, Hart believes, accusing the NSW government of delaying implementing the 150 recommendations of the Lambert Report on the Building Professionals Act, many of them to do with the need for better certification. A meeting has been called for December 7 with some of the country’s top quality builders to talk about putting pressure on politicians to act on them.

“The difficulty is that many of the worst developers are building smaller apartments for the investor market,” Hart says. “There are a lot of issues around those.”

One man who ends up inspecting, and writing strata reports about, some of those problem buildings is Gus Kernot, director of independent property inspection company, O’Connor’s Property Reports.

One of the major difficulties of buildings developed primarily for investors is that, when there are issues like leaking roofs, faulty membranes in showers and fire compliance problems, tenants are less likely to know about them and report them. Also, owners are far less likely to investigate them when they don’t live there themselves.

Then it’s often only when the second generation of owners in new buildings do renovations or start repairs that they discover they’re sitting on a “time bomb”.

Kernot says: “These new owners, five years later, might be doing alterations and discover that fire separation walls between floors haven’t been sealed properly so fire could easily travel from floor to floor. Then they might have to spend hundreds of thousands of dollars to sort it out.

“They might also see damp appearing on walls and discover there have been water membrane issues for a long time. This can be a time bomb for the buyers of these apartments. We’re now seeing very low owner-occupier rates in some of these new buildings and, with strong incentives for developers to build for investors, to some extent we’re going back to the bad old days.”

There’s certainly a need for more regulation in the industry to halt the progress of bad developers and safeguard quality of buildings, recommends Shaun Carter of architects Carterwilliamson, and the NSW chapter president of the Australian Institute of Architects.

Chief among them should be the need to keep the main architect of a building on past the DA stage so they can inspect the building onsite and sign off on it afterwards. “We also need more education of the public,” he says.

“People need to understand that quality buildings are better value in the long term, in terms of capital growth, the well-being of people living in them and for the community generally, than crap buildings. Then the better informed buyers, and investors, won’t buy garbage stock.”