A new report by The Strata Community Association New South Wales (SCA NSW) has revealed that more than half (53%) of all strata buildings had serious defects between 2016 – 2022, with an estimated $79 million being spent by owners corporations to rectify these issues.

A joint initiative between SCA (NSW) and the Office of the Building Commissioner, the 2023 survey was completed by more than 600 strata managers and indicates an increase in serious defects since the last report published in 2021. For schemes registered since 2020, however, serious defects have decreased from 34% to 27%.

The most common defects reported in the survey were waterproofing (42%), fire safety systems (24%), building enclosures (19%), structural issues (15%), key services such as plumbing and elevators (14%), and non-compliant cladding (8%). It revealed decreased incidents related to waterproofing, structural defects, and non-compliant cladding, while fire safety, enclosure, and key services experienced an upward trend.

The rise of ‘key services’ defects – which encompasses appliances such as lifts, garage doors, car stackers, air conditioning, security systems, and smart building technologies – is attributed to the introduction of newer technologies and their focused inclusion in the survey.

SCA NSW President, Stephen Brell, said: “Tacking building defects continues to be a formidable task and one that is time-consuming, financially burdensome and emotionally draining for all involved.

“We are grateful that these survey results show that consumers feel empowered to report defects, with the regulator receiving double the amount of serious defects reported (34%) than in 2021 (15%), showing increased confidence in regulation.

While, regrettably, we have seen an increase in serious defects since 2021, surveys such as this are central to our ability to advocate for the greater strata community and create government reform that ensures we are working towards more positive outcomes in the future.”

The survey sought to gain a broad understanding of the impact of serious building defects in the NSW strata community. As it stands, there are more than 85,000 strata schemes throughout NSW, with that number expected to skyrocket by 2040.

Despite the increase in serious defects, the survey also revealed positive developments in survey participation, with a 30% increase from 492 schemes in 2021 to 642 schemes in 2023. In addition to this, almost half (48%) of strata managers agreed that recent reforms have increased consumer confidence, while 34% of consumers are more confident in reporting defects to the regulator. This increased engagement demonstrates a growing commitment within the strata community to address and rectify building defects.

Acknowledging the challenges posed by these latest survey findings, Stephen Brell said: “We are committed to advocating for consumers and will continue to work hand in glove with David Chandler and the Office of the Building Commissioner to help rectify and prevent building defects, to ensure that every resident and homeowner has a safe place to live.”

Additional findings from the report:

• 94% of buildings had a current annual fire safety statement (one that had been issued in the past 12 months).
• For almost half (48%) of the buildings with all resolution work completed, serious defects were resolved within a year.
• The most common barriers to effectively dealing with serious defects were delays from the builders or developers (42%), lack of engagement from builders or developers (31%), as well as the upfront costs involved (28%).
• The average cost of rectifying serious defects was $283,000 per building. 57% of these costs were associated with repairs, 20% with professional costs, and 15% with legal costs.

7 Dec 2023