WHEN the Reporter hit the intercom button and said oh, hello Mr …
THIS is the reply …
‘Just piss off’
AS revealed in this program the trauma caused to home owners is a consequence of the ‘design and construct’ model … it’s at the core of the defects issue
DESPITE all the evidence … will the Building Ministers continue to focus on certification rather than getting to the nitty gritty?
WHY aren’t our governments pursuing the offenders for rectification costs through forensic accounting? That would “P” this lot awf …
ABC Photo: Reporter Sean Nicholls visited the developer of Mascot Towers … John Elias … this is what happened …
SEAN NICHOLLS: Oh hello, Mr Elias?
JOHN ELIAS: Just piss off
CRACKING UP …
Posted Mon 19 Aug 2019
VIEW Source Link for Video: Expires: Tuesday 16 July
Investigating Australia’s apartment building crisis.
“We’ve got a real problem here. It’s systemic and it’s infecting lots of buildings across the landscape, in all parts of the country. It’s very clear.” Building defect analyst
For 20 years the nation’s city skylines have been changing with the building of more than 650,000 apartments across the country.
“People are reinventing what the great Australian dream means for them...it’s been a transformation.” Industry spokesperson
Glossy advertising has wooed buyers away from the traditional Aussie dream of a house with promises of sophisticated apartment living and high-end finishes. But the shine has well and truly come off the apartment property boom.
“I have never seen a building that isn’t defective in some way. I know it’s my job, but even just walking around in public, I notice these things.” Forensic engineer
The emergency evacuation of two residential apartment blocks this year has blown open the industry’s secret – buildings riddled with defects.
“They affect people directly, they affect them every day. They cause a significant amount of damage over and above the defect, and so they’re very expensive to fix.” Lawyer
On Monday Four Corners investigates Australia’s apartment building crisis, from shoddy workmanship to lax laws, leaving owners out of pocket and in some cases out of a home altogether.
“If I have to pay for the repairs myself, I would have to go bankrupt. There’s no way that I could pay for it.” Apartment owner, Canberra
Four Corners will take you inside buildings and apartments in multiple cities to show how entrenched the problems are.
“The mould was basically all through the wardrobes, the mould covered the whole of the roof, down the side of the walls and spread over to the other side as well…. it basically rendered the apartment unliveable.” Apartment owner, Melbourne
The evacuations are a public sign of a problem many have wanted to keep quiet. Everyone involved knows the threat posed to property prices when a building hits the headlines.
On Four Corners some inside the industry are now speaking out about how this crisis has been allowed to happen.
“To suggest that we are policing the project couldn’t be any further inaccurate.” Building certifier
What they reveal is a litany of failure, to regulate and protect the buying public, even in the face of repeated warnings.
“What we’re seeing is the outcome from a poorly oversighted industry with a lack of competence and in some cases a lack of integrity. Commercial imperatives have really overtaken public interest in terms of decisions that have been made.” Building industry investigator
Those who know the scale of the problem warn that while new laws may prevent future problems, the legacy of the last 20 years will be with us for decades to come.
“There’s a lot of existing building stock that has defects in it. And we’ve heard many reports of owners dealing with those challenges that can’t be fixed by reforms.” Building industry investigator
Cracking Up, reported by Sean Nicholls, goes to air on Monday 19th August at 8.30pm. It is replayed on Tuesday 20th August at 1.00pm and Wednesday 21st at 11.20pm. It can also be seen on ABC NEWS channel on Saturday at 8.10pm AEST, ABC iview and at abc.net.au/4corners.
SEAN NICHOLLS, REPORTER: Australia’s apartment building industry is in crisis.
for decades it’s been harbouring a dirty secret.
(Montage of news stories about the evacuation of Opal Tower and Mascot Towers in Sydney)
SEAN NICHOLLS, REPORTER: A litany of construction defects.
(news stories montage continues)
SEAN NICHOLLS, REPORTER: It’s a problem affecting thousands of new apartment owners across the country.
NICOLE WILDE, STRATA LAWYER: For many people, it’s their only asset, and the expectation should be, in Australia, my greatest asset should be safe.
DR NICOLE JOHNSTON, DEAKIN UNIVERSITY BUSINESS SCHOOL: So it’s not until, as we’ve seen, people exit their properties, have to be out on the streets basically, does this start to come to the attention of the government.
ISSAC LEAN, MASCOT TOWERS APARTMENT OWNER: I just think that it stems from loose regulation, government regulation, that basically it’s a cowboy industry.
KAREN ANDREWS, FEDERAL MINISTER INDUSTRY, SCIENCE AND TECHNOLOGY: There’s clearly a crisis of confidence and there needs to be a lot of work done to rebuild that confidence broadly across the community
MELANIE BICKET, ELARA APARTMENT OWNER: If I have to pay for the repairs myself, I would have to go bankrupt. There’s no way that I could pay for it. If it was asked of me to pay my share. I don’t have the money, I couldn’t get any more money loaned to me. I’d be done.
Sean Nicholls: Tonight on Four Corners we investigate what’s gone wrong with the Australian apartment building industry. and how decades of inaction has fostered a crisis that will last for years to come.
(Title: Cracking Up)
SEAN NICHOLLS, REPORTER: On Friday June 14, Roslyn Lean took an early train home from her job in the Sydney CBD after a disturbing call from her son.
ROSLYN LEAN, MASCOT TOWERS APARTMENT OWNER: I was at work. It was about 4:30, quarter to five in the afternoon. Isaac had the day off work. He rang me and said, “I don’t want to alarm you mum, but I think something’s going on here. There’s a lot of workers in the car park basement.”
SEAN NICHOLLS, REPORTER: The Leans lived in a ten-storey apartment complex built above the station, Mascot Towers. Days earlier, cracks had been detected in the carpark. Engineers were called in and they discovered the building was moving.
SUPERINTENDENT JOSHUA TURNER, NSW FIRE AND RESCUE: So the initial triple zero call came in and it gave information about a potential building or structure collapse from the owners from that building. So we classified that as a building structure, rescue or collapse. So our initial response to that was two fire trucks and a rescue truck.
ISSAC LEAN, MASCOT TOWERS APARTMENT OWNER: I saw a hi-vis worker guy in the lift and I just basically said to him in jest, is the building going to collapse? Just expecting a big no as a reaction. And he turned around calmly and said, well yes, there’s a good chance there is. And I said, how much? And he said, oh, probably around about 60 per cent.
ROSLYN LEAN: The sirens started to come. Police, fire engine, all these sirens.
SUPERINTENDENT JOSH TURNER: The first questions that we asked, is it a collapse? Is it a pending a collapse, is it a potential collapse and the information we had that it was only a risk of collapse. So my head goes around what are the risks, the areas, what resources may I need? I start thinking along those lines as I’m approaching.
ROSLYN LEAN: I went downstairs. A fireman, came up to me and said, “If I was you, I’d be packing your bags.”
SUPERINTENDENT JOSHUA TURNER: We decided in conjunction, in a collaborative approach with the whole team that was there, of engineers, police, ambulance, of the best way forward is now to evacuate. Just to stop this, to protect the safety of everybody within that building.
SEAN NICHOLLS: Residents were ordered to gather a few essentials and get out.
ISSAC LEAN: The building manager said everyone has to be out by 9 PM. I think at that time when we found out it was probably seven o’clock so we had two hours to pack everything and arrange accommodation and get our cars out and all sorts of things. So it was chaos.
ROSLYN LEAN: The police that they were closing off the street. It was just get out, basically get out. And you’re in shock and I think when you get out, you’re starting to think, did that really happen?
SUPERINTENDENT JOSHUA TURNER: People were confused obviously. It was a Friday evening, they’d come home from work, some were coming home from work. So obviously a lot of stuff happening around their place that they needed to get information for. We did our best to try and actually keep a level of obviously calm and work through like we would at every incident. But yeah, obviously very emotional and confusing time.
SEAN NICHOLLS: The drama at Mascot Towers has become symbolic of the crisis that has engulfed Australia’s apartment industry.
PETER MCINTYRE, CEO ENGINEERS AUSTRALIA: This is a pivotal time. There’s certainly a crisis of confidence in the broader community. There’s concern amongst industry. There’s concern amongst organizations like ours and Engineers Australia. So this is a pivotal time to take action and to fix it.
SEAN NICHOLLS: Mascot Towers has a troubled history. Craig Young was one of the first to buy in.
(to Craig) So Craig, which one was yours?
CRAIG YOUNG, FORMER MASCOT TOWERS APARTMENT OWNER: My apartment was the first balcony you’ll see just above the podium level here. I first bought into here in 2009. At the time it was one of the few places around here. It was only the second apartment block in this area. And it was convenient, close to the train station, and close to work for me, which is not far away. So it worked out well.
SEAN NICHOLLS: Within a few years, defects started appearing.
ROSLYN LEAN: Well, at the beginning we had minor defect problems; hot water, small things like that. Not major. Later on we had a few other defects that were resolved.
SEAN NICHOLLS: In 2012 the owners’ corporation met to discuss suing the builder.
CRAIG YOUNG: When the chairman called for a vote on a motion to proceed with legal proceedings, which we had to do to spend that sort of dollars on the efforts, a representative of the builder and developer was there along with their lawyer. And they stood up. And the representative from the builder said, “If you proceed with this, you’ll never be able to sell your apartments.” And that left everyone wondering whether they should proceed or not, obviously.
SEAN NICHOLLS: Craig Young sold his apartment five years ago … well before the current structural cracking emerged.
SEAN NICHOLLS: And what do you think about that decision now?
CRAIG YOUNG: Oh, I dodged a bullet, obviously. I feel for the people that are here. And I’d hate to be in that position.
SEAN NICHOLLS: Mascot Towers is 11 years old so the owners have run out of time to sue to builder if he’s found responsible for the current cracking in the building. Depending on the state or territory, apartment owners only have between five and ten years to sue for major structural defects. Two months after Mascot Towers was evacuated, the owners are still waiting to find out what happened.
COLIN GRACE, STRATA LAWYER: From what we understand so far, it’s not really owner’s fault that their building’s in the situation it is. It’s major cracking, we’ve got experts all over the place at the moment. So until we get all that back, we really don’t know what’s happened, where it’s happened, and potentially whose fault it is.
DAVID CHANDLER, NSW BUILDING COMMISSIONER: I’m embarrassed frankly that the industry has allowed a product like Mascot Towers to turn up on the market place.
SEAN NICHOLLS: On Friday at a NSW parliamentary inquiry, the newly installed state building commissioner David Chandler made it clear who he thinks is responsible for the problems.
DAVID CHANDLER: My personal observation of the engineering design is that it’s poor and I’ve built a lot of buildings and I have to say when I walked across that job yesterday I don’t think I’ve seen many buildings as poorly built as that. There’s a builder there that was operating that really shouldn’t have been in the space doing it. They didn’t have the capability, they certainly didn’t know how to read a construction drawing but perhaps the drawings in the first place were flawed.
SEAN NICHOLLS: Four Corners tried to speak to Mascot Towers developer John Elias.
(Sean Nicholls knocks on the front door of John Elias’s house)
SEAN NICHOLLS: Oh hello. Mr Elias?
JOHN ELIAS: Just piss off [door slams]
SEAN NICHOLLS: I don’t think he wants to talk to us.
SEAN NICHOLLS: Lawyers for John Elias said the building was constructed in accordance with all development approvals.
ISAAC LEAN: We’re just moving from location to location and we don’t know when we can move back home.
SEAN NICHOLLS: That must be intensely frustrating?
ISSAC LEAN: Yes, it’s living uncertain every day. One day we could be notified of moving in tomorrow, the next day we could be possibly be notified that we can’t go back in for a year or worse that the building has to be demolished.
SEAN NICHOLLS: Is this an isolated case or is it symptomatic of something that’s going on?
COLIN GRACE: I think construction defects themselves are symptomatic of the problem across, and this is just but one example. You’ve seen in the press recently more and more buildings now, are coming out and saying, “Hey, we’ve got problems as well with defects.”
SEAN NICHOLLS: Mascot Towers is part of an Australia-wide apartment building boom that has lasted for 20 years. Since the Sydney Olympics in 2000, more than 650,000 apartments have been built across the country.
KEN MORRISON, CEO, PROPERTY COUNCIL OF AUSTRALIA: People are reinventing what the great Australian dream means for them, and for a lot of people, that’s still a suburban block or the freestanding house. But for a lot of other people, that’s something different. It’s an apartment in the right location with great access to employment, enjoying a vibrancy of lifestyle that you just the don’t get in a suburbs. The big growth in apartment living has come in recent decades, last two or three decades in particular. It’s been a transformation.
Photo: Daily Telegraph
CAAN: A transformation by the development industry when little else apart from apartments from 2012 to 2017 were constructed. The market target for this industry was Asia particularly China. The FIRB ruling of 2009 allowed them to sell up to 100 per cent of ‘new homes’ to foreign buyers …. hence the supply could not meet the demand …
SEAN NICHOLLS: But the boom has come with a hidden cost.
(to Nicole Johnston) How common would you say defects are across buildings in Australia?
NICOLE JOHNSTON, DEAKIN UNIVERSITY BUSINESS SCHOOL: Very common. It’s very common. We’ve got a real problem here. It’s systemic and it’s infecting lots of buildings across the landscape, in all parts of the country. It’s very clear and it’s very prominent, and we’ve got a serious problem here.
BRONWYN WEIR, CO-AUTHOR SHERGOLD WEIR REPORT: What we’re seeing is the outcomes from a poorly oversighted industry with, with a lack of competence and in some cases a lack of integrity. Commercial imperatives have really overtaken public interest in terms of decisions that have been made.
SEAN NICHOLLS: Lawyer Bronwyn Weir co-wrote a major report in February 2018 for federal and state governments that identified many of the problems that have since come to light.
BRONWYN WEIR: I guess the things that we predicted and were worried about have manifested themselves in these, you know, really tragic and awful circumstances for occupiers of those buildings.
SEAN NICHOLLS: The extent of defects problem was revealed in a landmark study published in June this year. The figures are staggering.
NICOLE JOHNSTON, DEAKIN UNIVERSITY BUSINESS SCHOOL: In New South Wales 97 per cent of the buildings that we looked at had at least one defect in multiple locations.
That was followed by Victoria with 74 per cent and Queensland with 71 per cent. There’s a chronic problem here. There’s multiple parts of the building that are affected by defects. It’s not isolated to one type of or one part of the building. It’s across multiple areas in relation to how the building is being constructed.
SEAN NICHOLLS: The problems plaguing Australia’s apartment buildings start right back at the drawing board.
*ROSS TAYLOR, BUILDING DEFECTS CONSULTANT: The process starts not as commonly thought, with it being the turning up at the site and doing a bad job. Shonky tradie sort of thing. That’s a common misunderstanding. In fact the process of these defects being generated starts right at the beginning.
*With the developer.
*SEAN NICHOLLS: Industry trouble shooter Ross Taylor says a common practice by developers is to use big name architects just at the concept stage to give the project sales appeal.
*ROSS TAYLOR: Developers, when they develop a strategy for selling their, they have to get the sales off the plan straight away. Once they’ve got the pre-sales and the bank then allows the money to flow, they then cut the name architect and then go to an unregistered architect or draftsman just to map out the basics to go to tender.
*That’s the start of the defects.
*SEAN NICHOLLS: In the industry, it’s known as the design and construct model … and it’s at the core of the defects issue.
*ROSS TAYLOR: The builder who has no training in design by the way, now takes responsibility for the design done to date, and completing the last half of the detail. Now he’s doing that on a tight budget. And so what frequently happens is he gets the sub-contractor to finish the designs. The way they see fit. The sub-contractor doesn’t have time to complete that design and so he gets his tradies to turn up on the job, to finish the design off on the go. That’s the design and construct model that’s operating in most of these high-rise buildings and is at the heart of the problems that we see today.
SEAN NICHOLLS: The 120-unit Elara complex in the Canberra suburb of Bruce began with excellent credentials.
ROSS TAYLOR: The developer in this case had hired one of the best names in architecture in Australia. In fact the architects that had designed Parliament House in Canberra. It doesn’t get better than that.
SEAN NICHOLLS: The award-winning architects were replaced before construction started.
DAVID ALLEN ELARA APARTMENT OWNER: The initial thing was I guess my daughter was, who was living here, was saying, “Oh, dad, we’ve got some leaks in the balcony,” or, “The car park’s full of water.” That was the initial thing. So I then made inquiries to the strata manager about what was happening. Then the full detail was revealed about the number of issues that we had here.
MELANIE BICKET, ELARA APARTMENT OWNER: We’ve then got occupancy certificates and people have started moving in. People have lived here for years now, and it’s … I don’t want to say it’s falling apart, because it’s not, but it’s got a lot of issues.
SEAN NICHOLLS: And how much worse does it make it, given that it was your first home?
*MELANIE BICKET: It’s shattering. This is what I saved for. All young people are encouraged, save up and buy your first home, because then you’re set for life. Everything’s good at that point. But it’s not. Not when you move into this.
SEAN NICHOLLS: The owners called in defects expert Ross Taylor.
*ROSS TAYLOR: The most apparent, waterproofing issues of water through balconies, and into basements and garages. Then had substantial cracking on the facades, render and brick work of the facades, which is apparent to anybody walking around the place or buying. Then there were fire regulation issues and there were structural adequacy issues that had to be addressed.
*ROSS TAYLOR (pointing to expansion joint at Elara complex) Here is a what’s called a construction joint or expansion joint over the top of the garage which leaks any time it rains.
*SEAN NICHOLLS: After failed attempts to get the builder to fix the defects, the owners took him to court. But the builder placed the company – B&T Constructions – into administration, claiming millions of dollars in debts.
CHRIS KERIN, STRATA LAWYER: It became clear following the appointment of the liquidator that there was no money for the owners corporation. In fact, there was no monies for a number of owners corporations that the builder had been responsible for.
Sean: This was a tactic, was it?
CHRIS KERIN: I mean, I can’t speak to the mind of the builder, but he had a group of companies. There were intercompany loans between those companies. And certainly I would expect that the intention of having a group of companies was to protect his assets and ensure that it was difficult to get at any monies that were around.
SEAN NICHOLLS: The Elara owners tried to claim against a special insurance fund set up by the ACT government. But the federal court ruled they were outside the five-year maximum period.
The owners are appealing the decision … if they lose they face a multi-million dollar defects bill
*MELANIE BICKET: It’s mostly the stress, for me. I’m quite lucky that my apartment itself isn’t affected. I’m not like other people who have leaks within their apartment, who have mould growing and things like that. So I’m pretty lucky in that way, but it’s the stress of it, knowing that things could go wrong in the federal court, and I could be dumped with the cost of repair … my share of repairing this place.
DAVID ALLEN: Now in retirement, we’re still paying off the mortgage, and that’s our superannuation money just going to pay off a mortgage which we never intended to do. so instead of our money running out when we’re 92, it might run out when we’re … I don’t know when it will run out, but certainly it’s our superannuation money now that’s paying the mortgage off on the unit.
SEAN NICHOLLS: In terms of the value of the unit, where are you now from what you paid for it initially?
DAVID ALLEN: Probably minus 50 or 60,000.
SEAN NICHOLLS: Elara’s builder and developer, Ivan Bulum, has a history with ACT regulators.
In 2015 one of his companies was fined $10,000 over defects at a separate development.
*(in front of Canberra building construction site) Ivan Bulum might have walked away from Elara … but that hasn’t stopped him developing new projects. This is one of his company’s latest ventures … selling high end apartments off the plan in central Canberra.
Four Corners approached Bulum Group for an interview … but didn’t get a response.
MELANIE BICKET: If I have to pay for the repairs myself, I would have to go bankrupt. There’s no way that I could pay for it. If it was asked of me to pay my share. I don’t have the money, I couldn’t get any more money loaned to me. I’d be done.
SEAN NICHOLLS: Of all the defect problems, water issues are by far the most common.
NICOLE WILDE, STRATA LAWYER: They affect people directly, they affect them every day. They cause a significant amount of damage over and above the defect itself, and so they’re very expensive to fix.
(Bronwyn Cosh and Sean Nicholls walk into apartment with major rectification work)
BRONWYN COSH, MELBOURNE APARTMENT OWNER: So yeah, this is the apartment. Oh wow, it’s been gutted.
SEAN NICHOLLS: How does it feel seeing it like this?
BRONWYN COSH: I’m not sure…
SEAN NICHOLLS: Bronwyn Cosh bought her inner Melbourne apartment as an investment two years ago. It’s the first time she’s been back since rectification work began after serious water damage.
BRONWYN COSH: Basically before this the apartment was full of mould. This was the bedroom here and this was like a walk-through and wardrobes on either side. The bathroom … so the mould was basically all through the wardrobes, the mould covered the whole of the roof, down the side of the walls and spread over to the other side as well. So it was all over the roof as well. And it was black mould as well. So it basically rendered the apartment unliveable.
SEAN NICHOLLS: The problems started weeks after she bought the place … shortly after her first tenants moved in.
BRONWYN COSH: The bathroom, every time they had a shower, the bathroom would flood because the floor wasn’t falling the right way. We’ve had irrigation out the front that flooded by whole courtyard. Then the last flood, which is what caused, kind of like a bomb, was the tenants came home and found the carpet completely saturated. It looks as if water had been running down the walls or it came from somewhere around here. So, yeah, it was quite devastating.
SEAN NICHOLLS: Pretty much have to start from scratch?
BRONWYN COSH: Pretty much as you can see, yeah
SEAN NICHOLLS: The builder accused her tenants of sabotaging the apartment, so they could break the lease.
BRONWYN COSH: That’s what got me angry. How dare you blame my tenant when clearly it’s your fault. It’s your shonky workmanship.
*SEAN NICHOLLS: Bronwyn Cosh was forced to sue her builder, because he didn’t have insurance covering her for defects or unfinished work. In Australia builders don’t need the insurance … if the building is over three storeys high.
*BRONWYN COSH: So of course, this apartment is more than three stories high, my builder doesn’t have builders warranty insurance. So I’ve got nothing to come back on, except the builder himself.
SEAN NICHOLLS: How surprised were you to learn that?
*BRONWYN COSH: Horrified, absolutely horrified. Because it’s not known.
*NICOLE WILDE: If people are not prepared for that kind of financial burden, they can find it really devastating, and I see it with almost all of my clients coming to me and asking, “Well, what do we do now?” And, unfortunately, they all have to spend more money on more expert reports, more legal fees, before they can even get the builder in a room to start talking about what they might cover. And, generally, they’re always somewhat out of pocket, even if they do recover part of it from the builder.
*BRONWYN COSH: Yeah, I’ve just got no words. I never expected this, at all. And I never expected not to have support or back up from the government departments and things like that and, you know, where builders or whoever can just wipe their hands and go, not my problem. And I’m left standing with something that completely wasn’t my fault.
*SEAN NICHOLLS: The other major defect issue is fire protection. In June 2017 the world woke up to the dangers of inadequate fire prevention in high rise towers. The Grenfell disaster in London killed 72 people … the fire spread due to flammable cladding. Flammable cladding on Australian buildings is now in the spotlight. But other common fire safety defects largely remain hidden.
*JONATHAN DULER, FORENSIC ENGINEER: I have never seen a building that isn’t defective in some way. Yeah. And I mean, I know it’s my job, but even just walking around in public, I notice these things. I’ve never seen a building that isn’t defective.
SEAN NICHOLLS: Forensic engineer Jonathan Duler sees first hand the consequences of cost cutting and poor design.
JONATHAN DULER: So, this building, the apartment doors aren’t actually fire doors. They’re just solid core doors. And they did that to save on cost. A fire door is quite expensive at about one and a half grand to install. These ones are a couple of hundred bucks.
SEAN NICHOLLS: So what does that mean for the fire safety of the doors?
JONATHAN DULER: It means that you’re only going to get a maximum rating of about half an hour that the door can resist fire. But that’s not guaranteed.
SEAN NICHOLLS: He’s taking us through a Melbourne apartment block with serious problems …
Including fire stairs that in an emergency could put lives at risk.
*JONATHAN DULER: So in a fire there’ll be a lot of smoke in the hallways, people won’t be able to see. Emergency lights will come on but that won’t make a difference. Then they’ll get to the doors, then they’ll come into the stair and they might be faced with 750 people trying to get out at the same time. As you can see, there’s no space to fit that amount of people.
SEAN NICHOLLS: What’s the primary motivation for the builder of doing what’s happened here?
*JONATHAN DULER: Primary motivation, is definitely to get more floor space that is sellable and in apartment buildings that’s worth a lot of money.
SEAN NICHOLLS: Given all the regulations that are in place, how does a system like this get signed off in a building like this?
JONATHAN DULER: It started with the privatisation of the building surveying industry.
SEAN NICHOLLS: One of the biggest changes to the building industry happened 25 years ago with the shift to private certification. State governments started allowing building work to be signed off by private contractors to speed up the approval process.
ROSS TAYLOR: The certifier in this current system is contractually obligated to the developer. The developer hires them. So in a lot of ways they’re representing the developer, not the future owner. The certifier system then has become virtually, it’s a placebo system. It’s one that you put in place when you feel you have to have one that is of no actual effect.
SEAN NICHOLLS: How big an issue in, in your view has this been in creating the current situation?
BRONWYN WEIR, CO-AUTHOR SHERGOLD WEIR REPORT: Well it depends who you ask. Some stakeholders say this is the very reason for all of this. The certifiers themselves of course deny that.
DAVID BLACKETT, PRIVATE CERTIFIER: There are bad apples in every process and every discipline. So, yes, of course building certifiers have a case to answer in relation to the quality of construction, in NSW and Australia today. In terms of the proportion of the responsibility, the proportion of blame certifiers are receiving, is very damaging to our brand, very damaging to our discipline, and blatantly, completely incorrect and inappropriate.
DAVID BLACKETT: So what we’ve got here is typical with an apartment building under construction where we’ve got all the fire rated walls that separate all the apartments.
SEAN NICHOLLS: David Blackett has been a building certifier in NSW for 25 years. He says the problem is not the certifiers, it’s the system.
*(To David Blackett) SEAN NICHOLLS: There is a perception that the certifier is like the policeman on site. Is that accurate? And if not, why not?
*DAVID BLACKETT: No, absolutely not. The frequency of site attendance is governed by legislation. Now if we stick to minimum legislated requirements, we are on site 5 per cent of the construction program, if that. Or we’re here for absolute milestone inspections only, so to suggest that we are policing the project couldn’t be any further inaccurate.
SEAN NICHOLLS: The law says certifiers are only required to check a fraction of these important safety devices called fire dampers designed to prevent fire spreading through a building.
DAVID BLACKETT: In a building of this size – what are we, five or six levels, there could literally be hundreds and hundreds of fire dampers penetrating the walls.
SEAN NICHOLLS: And you’re only required to check one in every 10.
DAVID BLACKETT: One per floor.
SEAN NICHOLLS: That seems crazy.
DAVID BLACKETT: If I have 300, I check one. 299 escape our look.
SEAN NICHOLLS: The same applies to the waterproofing of bathrooms.
*DAVID BLACKETT: Certifiers in NSW, we’re required to look at 10 per cent only per floor. A hundred bathrooms, ten bathrooms only we’re required to look at. So when we come out we’re looking at a membrane on a floor.
We have no knowledge of how many coats have gone down, we’ve got no knowledge of how it was installed. And we’ve certainly got no knowledge of what happens to that floor after we walk away from the site.
SEAN NICHOLLS: Certifiers approve most construction work by relying on tradespeople and engineers saying they’ve done the job properly.
DAVID BLACKETT: None of that paperwork carries any legal recognition. They’re not legal documents; in some instances they could be written on a beer coaster, because they carry no recognition in the statutory process. The only one document that carries the legal recognition, is our occupation certificate. If something was to fail or go wrong beyond the track, it’s the occupations certificate that’s brought to the table. And it’s the issuance or the author of the occupations certificate who is in the firing line.
SEAN NICHOLLS: And that’s you.
DAVID BLACKETT: And that’s me.
SEAN NICHOLLS: A spectacular example of alleged poor certification of buildings is currently playing out in the Northern Territory.
(ABC News item)
NEWS READER: Later this month a structural engineer is set to face an inquiry into alleged professional misconduct after nine multi-storey buildings in Darwin and Palmerston were deemed to be non-compliant.
SEAN NICHOLLS: A government audit of the engineer’s work showed the buildings he approved failed to meet the national construction standards. If found guilty he faces deregistration in the Northern Territory. But that wouldn’t stop him from practising in other states.
*PETER MCINTYRE, CEO ENGINEERS AUSTRALIA: The trouble at the moment is almost anybody in Australia can claim to be an engineer, other than in Queensland where there’s been a registration system in place since 1930. In other states and jurisdictions there is no restriction on anybody claiming to be an engineer. We regard that as being unacceptable, and I think the community, regards this as being unacceptable.
(ABC news item)
ABC NEWSREADER: Tonight a 30 storey Sydney apartment building is evacuated amidst fears it could collapse.
SEAN NICHOLLS: Last Christmas Eve Opal Tower residents in Sydney were forced out of their apartments after major cracking. The building was less than a year old.
OPAL TOWER RESIDENT: I was thinking Australia you know is very good in regulation stuff but it was very shocked for me.
*SEAN NICHOLLS: An independent investigation found the damage was caused by changes to the original design. The report said it could have been avoided with a registry of engineers to ensure high standards and regular inspections of the design by another, independent engineer.
*PETER MCINTYRE: That expert report identified that one of the critical factors to the problems in that building was it was not built as designed. So the people who were constructing that building made changes to the design. Presumably not knowing the impact of those changes. What they were doing was going to fundamentally alter the functioning of the building.
*SEAN NICHOLLS: Another major problem contributing to defects is the use of poor-quality building products.
*RODGER HILLS, BUILDING PRODUCTS INDUSTRY COUNCIL: There is structural steel work that’s substandard, there has been problems with asbestos contamination of fibre cement boards in various hospitals around the country. There is also a concern now about lead and lead contamination of plumbing products. There is glass which is substandard, balconies that have exploded and fallen to the street in Melbourne. We’ve got the flammable cladding issue.
(QBCC Inspectors drive to construction site)
SEAN NICHOLLS: It’s a Tuesday morning and inspectors from the Queensland Building and Construction Commission – or QBCC – are heading to a Brisbane building site.
QBCC INSPECTOR: One of the Qld Building commission’s programs we do random site inspections and we’d like to have a quick come on site and have a look at your floor plans, whatever the private certifier signed off and then go for a walk, if you’ve got time.
SITE FOREMAN: Yeah absolutely we’ll get you signed in and we’ll go for a walk ok, come this way.
SEAN NICHOLLS: The QBCC has broad powers to police building sites. One of its key roles is to crack down on a major issue in the industry – dangerous building products. This site gets the all clear.
BRETT BASSETT QBCC COMMISSIONER: One of the key reasons that the Queensland Parliament gave us this power is to make sure that if you are bringing a product into Queensland and then putting it on a building site, that it is safe, that it meets the requisite standards, and that people can have confidence in the built environment in Queensland.
*SEAN NICHOLLS: Queensland’s law is designed to ensure that every person involved in a building can be held legally responsible for the products they use.
RODGER HILLS: It imposed a duty of care on all the people in the building supply chain, to ensure that it wasn’t just the building surveyor at the end of the process that had the duty, it was actually everybody. Which means that you can’t then as an architect, turn around and say, it wasn’t my fault, or the builder, it wasn’t my fault, because you now have a duty to actually make sure it actually is your responsibility. So that’s a fundamental change in the way that building governance and building regulation is supposed to happen and should happen.
*SEAN NICHOLLS: The Queensland law was supposed to be a model for the whole country. In 2017, NSW was set to follow Queensland with its own building products law. The industry was shown a draft bill … but when it got to parliament it had been watered down. The reason? Four Corners Cabinet was worried more regulation could slow down the construction business.
**RODGER HILLS: We were shocked, because the whole thing had been heavily edited and we counted up about 80 clauses that had been pulled out of the documentation. And those clauses were all around non-conforming building products. In fact, the definition of a non-conforming building product wasn’t even in the bill. All of the clauses to do with chain of responsibility and duty of care, they were all taken out. As were all powers, the recall powers the Minister had to recall defective products. So all of the things that actually would make the bill a chain of responsibility bill were gone.
SEAN NICHOLLS: So it had been gutted.
RODGER HILLS: Gutted. Absolutely gutted. And so the industry, we were appalled. When New South Wales failed to do that, the other states and territories went cold on the whole idea.
SEAN NICHOLLS: When Australia’s building ministers met in Sydney in July, there was a growing sense of crisis.
KAREN ANDREWS, INDUSTRY MINISTER: What we need to do is rebuild confidence in Australia’s building and construction sector.
SEAN NICHOLLS: But they’d known about the problems for years.
NICOLE JOHNSTON, DEAKIN UNIVERSITY BUSINESS SCHOOL: People have been jumping up and down about this for years and years and years. I’ve spoken to a lot of people in the industry that have been really concerned about the nature of building defects in this country. And there’s been lots of committees formed, there’s been lots of task forces, there’s been lots of consideration around this, but really nothing has happened.
SEAN NICHOLLS: Seventeen months before the July meeting they’d been handed a major report by lawyer Bronwyn Weir and former public servant Peter Shergold.
BRONWYN WEIR: One of the tasks we were asked to do was to consider other reports. And essentially what our report does is draw the threads together of other, you know, very eminent experts who’ve told governments that these issues are occurring in the sector.
That’s why our report is so concise because it was so obvious looking at a range of reports, what the key themes were. So these, the people have been saying these things for a long, long time.
NICOLE JOHNSTON: So it’s not until, as we’ve seen, people exit their properties, have to be out on the streets basically, does this start to come to the attention of the government or governments.
SEAN NICHOLLS: The building ministers finally agreed to implement the report’s recommendations including a crackdown on private certifiers and registering everyone involved in the building process.
KAREN ANDREWS: The states and territories have committed to nationally consistent outcomes. That’s what industry has been calling for. They’ve got the key recommendations from the Shergold Weir Report and if they don’t act, I think that they will rightfully deserve and get the wrath of the Australian public.
KEN MORRISON, PROPERTY COUNCIL OF AUSTRALIA: It’s very important that as governments work through these issues that they do give it priority, it doesn’t just disappear from the headlines and therefore disappear from policymakers’ focus, and that we do get those recommendations in. It’s important obviously for all those people who are living in apartments or looking to purchase apartments, but it’s also important for an industry which provides hundreds of thousands of jobs for the Australian economy at a time when we need those jobs.
CAAN: PCA: DEVELOPER LOBBY; Scott Morrison wrote their policy before entering politics
(To Bronwyn Weir)
SEAN NICHOLLS: If the states and territories implemented all of your recommendations in your report today, what’s the legacy that we’re still left with in terms of buildings that have been constructed over the last 20 years?
BRONWYN WEIR: The existing building stock is what it is. You know, we have hundreds of thousands of apartments that have been built across the country over the last two, three decades. Probably the prevalence of noncompliance has been particularly bad, I would say in the last say 15 to 20 years. It’s gotten worse over that period. And that means there’s a lot of existing building stock that has defects in it. And we’ve heard many reports of owners dealing with those challenges that can’t be fixed by reforms responding to our recommendations.
SEAN NICHOLLS: Would you buy a new apartment today?
BRONWYN WEIR: I wouldn’t buy a newly built apartment. No. I’d be, if I was going to be investing in in an apartment, I’d buy an older one.
SEAN NICHOLLS: The drama of Mascot Towers has forced governments to act on the national defects issue. But that’s little comfort for residents.
ROSLYN LEAN: We received an email on a Monday night saying that our building was moving in a downward motion and it would be better if we moved all our furniture out. It conjured up images of the building sinking.
SEAN NICHOLLS: Roslyn Lean is living in a serviced apartment partly paid for by the NSW government. She’s allowed back into the building on restricted days to water her plants.
This week owners expect an engineer’s report to reveal what’s wrong with the building.
*ROSLYN LEAN: My worst fear would be that if we can’t move back at all or we’re out for much longer what are we going to do financially, I don’t know how this is going to go. That’s my worst fear, not knowing how long we’ll be out of our apartment and the financial situation its going to put on all of us. So that’s my worst fear.
SEAN NICHOLLS: Close to 140,000 apartments are currently planned or being built across the country. The lesson from this crisis is buyer beware.
BRONWYN COSH: For me, personally, I would not buy a brand new apartment ever again. For me, this has done the damage for me. I don’t want to go through this again.
MELANIE BICKET: Don’t buy an apartment. I’d just kind of say, you don’t know what you’re walking into anymore, with this going on everywhere. You’re really rolling the dice now.