news, act-politics

Forcing developers to pay bonds on apartment blocks they build could improve construction quality in Canberra, the ACT's peak strata body says. Canberra is in the middle of its biggest apartment boom since records began, with the number of tower cranes around the city at a two-year high and forecast to keep rising. More than 3000 apartments in blocks higher than four storeys were approved in Canberra between January and August, figures from the Australian Bureau of Statistics show. That equates to more than 60 per cent of residential building approvals in that period. High-rise residential building approvals in the city were worth about $870 million, around 58 per cent of the $1.5 billion worth of residential building work approved from January to August. But Strata Community Association ACT president Robert Craven says concerns about building quality were having a chilling effect on consumer confidence. A legal firm recently told an ACT Legislative Inquiry it had advised 80 property owner corporations in relation to building defects since 2010, although apartment owners in buildings above three storeys had "no recourse against their builders whatsoever" to fix defects. Mr Craven said the ACT's privatised building certification industry had "opened up another avenue for any number of things to go wrong". He said systemic problems in Canberra's building industry had worsened since building certification was wholly privatised. "It's another element the government has to regulate without directly controlling. The proof is in the pudding. Buildings throughout the territory are being certified that shouldn't be," Mr Craven said. He said he had seen a building in Canberra's north where certification was given to an emergency lighting installation that was in clear breach of the Australian standard at the time. "The standard hadn't changed in the five years before the installation was done. Whether through malfeasance or incompetence, it was incorrectly certified," Mr Craven said. He said complaints made to the registrar were not always "as effectively dealt with as they could be", as its powers were not as far reaching as many people believed. Builders could also "duck and weave" rectification claims via phoenixing, Mr Craven said, leaving owners with spiralling strata fees or out-of-pocket costs in the tens of thousands of dollars. "When people think buying an apartment means they need to be ready for trouble, that drags down several industries. It has a pretty wide-ranging effect," he said. Mr Craven said while it wasn't feasible to bring certification back under the remit of government, introducing a strata buildings bond scheme could help restore consumer confidence. Since January, NSW developers have been forced to lodge a 2 per cent building bond before applying for an occupation certificate, if their development is four storeys or higher. Buildings must also be checked for defects by an independent inspector as part of the scheme. The bond must be held for at least two years, to allow time for defects to emerge, and developers can be fined up to $1.1 million for failing to lodge a building bond. Mr Craven said the ACT should bring in a similar scheme. "It doesn't provide a silver bullet to the problem, but it does help to hold builders accountable for the work they do," he said. "That model is a good starting point, but it could do with some more refinement." He said the building registrar's powers should also be beefed up and the agency should be better resourced. Building certification privatisation began in the mid 1990s. Since then, all jurisdictions except Western Australia have some percentage of privatised certification. A 2010 ACT Planning and Land Authority submission to a Legislative Assembly inquiry said the widespread failure of the private certification system had not been demonstrated at that stage; but the government acknowledged concerns about building quality. ACT Building Quality Minister Gordon Ramsay last month flagged changes that would mean developers have to submit a minimum number of documents to get a building approved. He also said Access Canberra had created a rapid regulatory response team in the building inspectorate to assess building complaints quickly, ideally on the same day. "These are just two of our immediate reforms. The Improving the ACT Building Regulatory System review identified 43 reforms, which we accepted and are rolling out in a coordinated and systemic way," Mr Ramsay told the Assembly. However, reforms that could make it easier to force directors of insolvent or phoenixed building companies to rectify defects have been postponed, pending the outcome of the federal government's review of security of payments. That review was finalised last December.

https://nnimgt-a.akamaihd.net/transform/v1/crop/frm/silverstone-ct-migration/0aefe224-6078-4f71-b42a-6f9cd8596a0f/r0_298_5568_3444_w1200_h678_fmax.jpg