Home owners who have ended up buying into shoddily built apartment blocks are going to suffer the most from a NSW government decision to further delay the introduction of its much-vaunted system of strata defect bonds, it has been claimed.

The scheme, agreed in 2015, whereby developers would have to put aside 2 per cent of the cost of a new building to be used to rectify any faults for owners, was meant to be brought into law in July last year. It was deferred until this July and now postponed again – without any official public announcement – to January 1, 2018.

“The first thing that comes to my mind is that the developers have leant on the government to stop them,” says Drew Mollineau, who’s been fighting – so far in vain – to have the defects in an apartment he bought in Waterloo last year fixed.

“Why else would this happen? The big losers from this are going to be the property-buyers, the renters who are leasing these sub-standard apartments, and the people of NSW who will have even less certainty going into the future. It’s a terrible situation.”

Gemmologist Mollineau, 57, has so far been unable to either move to his new apartment, in a large block of 160, or lease it out to a tenant, because of numerous alleged faults in the bathroom, including a missing window that had been there in the plans and “wavy” walls.

He’s being helped by the NSW Fair Trading and is due to go next to the NSW Civil and Administrative Tribunal (NCAT) for a compensation hearing.

His criticism is just one of a number being voiced across the industry. Karen Stiles, administrator of the peak apartment-owners’ organisation the Owners Corporation Network, says the move is a “tragedy” for property-buyers in the state.

“It’s a tragedy for the thousands of owner-occupiers and mum-and-dad investors who have bought apartments in this unprecedentedly huge building cycle,” she says. “Buyers of apartments over three storeys are now really suffering.

“The government previously took away all consumer protection for them and now this measure, which was meant to bridge the gap between the builder and the owner, hasn’t happened. Having no protection, and with 85.6 per cent of consumer claims against 18 per cent of companies which regularly phoenix into others, is creating unimaginable suffering for unsuspecting property buyers.”

A spokesperson for NSW Fair Trading said the delay had come about as the work to develop a new national standard for building inspections was not yet finished, as well as the processes, systems and qualified staff to support it. Staff for Minister for Innovation and Better Regulation Matt Kean said he would make no further comment.

But Lannock Strata Finance CEO Paul Morton, whose company provides funding to owners’ corporations to remedy defects says the government should use the delay to find better ways to fix the problem of defects at its source.

“Surely the better approach would be to fix the problem at its source – review the certification process, rein in shonky operators and make it easier for consumers to get information about the credentials of the developer and builder,” says Morton.

“There is a lot taken on trust when buying off the plan in a new development and millions of dollars are changing hands with inadequate assurance about the quality of the finished product.”

The most common problems faced by property buyers are water leaks, outdated balcony balustrades, electrical faults and concrete cancer, with a major survey conducted by the UNSW City Futures Research Centre between 2009 and 2012 revealing that 72 per cent of apartments had defects.

Strata lawyer Banjo Stanton says the bond still seems to be, disappointingly for consumers, a work in progress. “Not having the bond in place is still another setback for the owners that will miss out on it due to this delay,” says Stanton of Stanton Legal.

“[But] when the bond is implemented, it will not come close to reasonably protecting consumers as it can only cover defects identified by the inspector within 18 months of completion and the first sign of most defects, particularly the expensive ones, usually take longer to appear.”

The delay in the bond introduction has also been blasted by strata lawyer David Bannerman who says it will now miss the biggest part of the apartments construction cycle that’s been underway recently.

“There has been no legislative reform to address building quality in strata schemes since the last construction cycle more than 10 years ago,” he says.