In response to reports of serious defects in recently completed and occupied residential apartment buildings, the NSW Building Commissioner launched a new initiative in November 2022 known as “Project Intervene” (Project).
The primary purpose of the Project is to provide a way forward for Owners Corporation to find alternative resolution with developers without costly, stressful and often time-consuming litigation.
Setting the Scene
Over the past three years, poor-quality construction was the most common complaint of new home buyers in NSW, with Fair Trading receiving about 11,000 complaints each year between 2019 and 2021.
A serious defect arises where building work (or building products used) does not comply with the performance requirements of the Building Code of Australia or Australian Standards or includes defective design or faulty workmanship.
According to Commissioner David Chandler, serious defects exist in 39% of all NSW apartment buildings, with just 4% of litigation cases being successful in having these defects rectified.
Legal costs were a major issue in these disputes, with homeowners spending approximately $2 million on legal fees and expert investigations in 2022 alone.
Since the Opal and Mascot Tower disasters in the Inner-South of Sydney, Commissioner Chandler introduced the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act) (and associated regulations), which has allowed for the inspection and rectification of residential work.
The Project seeks to address serious defects found in residential buildings no less than six years old, concentrating on defects found after an initial occupational certificate has been issued.
To be considered for the Project, a complaint must be lodged by an authorised member of the strata committee or the strata manager with NSW Fair Trading between the 2nd of November 2022 and the 30th of June 2023.
To be eligible for the Project, the building must satisfy the following:
- The developer (or builder) is active, to ensure rectification responsibilities can be enforced;
- An occupation certificate was issued within the last 6 years (statutory warranty);
- The residential apartment building is four storeys or more; and
- The building is identified as having serious defects in the key building elements of the common property.
More information on the eligibility can be accessed here.
Given one of the requirements listed is that “the developer (or builder) must be active”, neither the Opal Tower, nor the 20% of cases where the developer is no longer trading, would be eligible under this scheme.
Whilst the Building Commissioner has identified this gap and is reportedly working on an alternative, no details are yet available.
What happens once you apply?
Below is a snapshot from Project Intervene Toolkit illustrating the process of once a complaint is received to outcome.
Credit: New South Wales Government, Project Intervene The Toolkit (September 2022)
Lodgement of a complaint closes on the 30th of June 2023.
The Project in its current form is merely a framework to trial whether the system works. Currently as it sits, the process will revert back to what it was previously after 30 June 2023. That is, if there is a complaint, it will need to go through some form of dispute resolution.