WHERE to now for Home Owners?  Department of Better Regulation or Department of Fair Trading, or a bit of each?  To put a stop to loopholes and to keep abreast of these issues …

IS it the case Deve-lopers have found a means to devour even more … ?

Estimated build cost of a 2-bedroom apartment $210,000  … so their profit margins are being squeezed … hm …

PERHAPS time the Owners Corporation stepped in to organise a Strata-wide Class Action?



Some strata managers have suggested the practice may become more widespread as developers remain under pressure. Photo: iStock

Buyer beware: Warnings of ‘rorts’ for new apartment buyers



The opposition’s better regulation spokeswoman Yasmin Catley confirmed to Domain that Labor plans to create an office to oversee all strata issues, but with particular focus on defects in newly constructed buildings.






fta logo


HOW can this be regarded as “Fair Trading” in NSW with home owners having purchased a high-rise apartment … when developers have it all cooked up so that consumers have little choice, or have been priced out of an alternative of a cottage by the Housing Ponzi Scheme of NSW INC?

“The HOME BUILDING COMPENSATION SCHEME covers new houses and multi-unit residential buildings up to three storeys high.

There is no cover for multi-unit buildings that are more than three storeys high.

Exemptions also apply to certain types of retirement villages.”




Buying off the plan

Buying a property


construction strata
27 May 2016 | 


With a quarter of Sydney’s Metropolitan residents now living in Strata titled properties[1], the increase in high rise residential developments shows few signs of abating. New legislation, coming into effect at the end of this year, will give these owners greater protection and developers may need to consider changes in the way they do business.

The Strata Schemes Management Act 2015 (the Act) will come into operation across New South Wales in November 2016 and draft regulations are currently being circulated by NSW Fair Trading for comments[2]. This should offer better protection for owners of residential building apartments[3]. In particular, it addresses a constant bugbear – the defects in these developments.

There has been particular concern recently for the rights of owners’ corporations and purchasers in pursuing defect rectification following the High Court’s decision in the case of Brookfield Multiplex v Owners Corporation Strata Plan 61288 [2014] HCA 36 (the Brookfield Multiplex Case). The Brookfield Multiplex Case provides that the law will not step in to assist purchasers in respect of latent defects where parties had an agreement articulating the builder’s obligations to remedy defects. Owners’ corporations (and purchasers of apartments) will either be limited to relying on their contractual protections, or the introduction of legislative reform[4].

The Act may have a significant impact upon developers[5] with the introduction of a new defect bond and inspection regime, designed to reduce the incidence of drawn-out disputes for defect rectification. This new regime, however, will only apply to construction contracts entered into after the commencement of the legislation and won’t apply retrospectively.


  • Developers must now appoint a qualified building inspector to inspect and provide an interim and final report on the building work[6].
  • Prior to completion of the building work, developers must provide a building bond (paid into a fund established by the Department of Fair Trading) equal to 2% of the contract price for the purpose of securing payment for rectifying any defective building work identified in the final report[7].
  • On the later of two years after the completion of the building work, or within 60 days after the final report is given to the developer, the bond will be either drawn down in favour of the owners’ corporation if the final report identifies and estimates the costs of the defective work, or returned to the developer (or the balance of the bond) if there is no defective work identified.
  • The maturity date for a building bond must not be more than three years[8].
  • Importantly, an occupation certificate (as issued under the Environmental Planning and Assessment Act 1979) for any part of the building for which the building work was done will not be issued until the building bond is provided by the Developer, which may impact on the Developer completing its contracts for sale[9].

Clearly, the NSW Government is attempting to address the need for additional statutory protection for purchasers or unit holders by increasing accountability for developers. The new legislation supplements the statutory warranties provided by the Home Building Act 1989 (NSW) (Home Building Act) and in particular, “multi-storey”[10] developments[11].  Under the Home Building Act, owners have a period of six years to claim for any ‘major defects’.  Claims for defects causing physical damage, which fall short of this definition, need to be brought within two years[12].


So how will the draft legislation impact upon developers? It really depends on the way their organisation is structured. Those developers with in-house construction capabilities will have different considerations and may seek to allocate risk differently compared to those who contract with third party builders.

Those contracting with third party builders will seek to extend the defects liability periods until the issue of the final report (which will occur after the two year period), and require builders to provide additional security to cover the 2% defects bond.

Developers with in-house construction subsidiaries may not wish to change their current approaches and risk allocation with their related builder entity. These organisations could seek to pass this added cost on to the individual purchasers of the strata units.

How effective the reforms will be at addressing the issue of post-completion defect rectification remains to be seen. There are obvious practical considerations for all parties to negotiate; will bonds for 2% of the value of the contract sum really be adequate to cover the costs of rectifying all defects? Debateable.

In light of the Brookfield Multiplex Case, or any legislative reform, there is a prudent path. Developers and builders, as well as owners corporations and purchasers should ensure that the terms of the agreement between the parties are clearly set out in the contracts they enter into.

[1] See rolling annual total for high rise residential building approvals chart – Business Insider Australia, “The RBA’s warning on Australia’s apartment boom’, 16 October 2015, David Scutt.
[2] Comments on the draft Strata Schemes Management Regulation 2016 may be lodged by way of email to  <>.

[3] Ibid. 2. 

[4] See ‘The rise and fall of a builder’s duty of care to owners corporations’ 10 October 2014 by Anna Ross and Kate Gill-Herdman.

The High Court’s reasoning for its decision that the builder did not owe the duty of care alleged by the owners corporation for economic loss caused by latent defects was based on the special circumstances necessary to establish the existence of such a duty of care and the need to establish a certain level of ‘vulnerability’. It held that the individual owners of the units purchased (together, forming the owners corporation) were not ‘vulnerable’ to the required threshold to the economic loss caused by the construction by the builder. The individual owners were in a position to protect themselves contractually when entering into the agreements with the developer, and could have ‘exercised [their] contractual wisdom to bargain for protection against the risk of defects’[4].

[5] The term ‘developer’ in the Act has the same meaning given to it in the Home Building Act 1989 (NSW).

[6] Under Part 11 of the Act, developers now must:

  • within 12 to 18 months of completion of the building work and with the approval of the owners’ corporation, appoint a qualified building inspector (not connected with the developer or the building work) to inspect and report on the building work (interim report); and
  • if defective building work is identified, within 18 months to 2 years of completion of the building work, arrange for that inspector to carry out a final inspection and provide a final report (final report).

The developer will be responsible for all costs associated with obtaining inspections and reports, and for the purposes of section 210 of the Act, the building bond may be used to meet the costs of an inspection or a report, including any fee for the appointment of a building inspector by the Secretary (if the developer of the Strata scheme is bankrupt or insolvent and the costs of any fee have not been paid). See section 54 of the draft Strata Schemes Management Regulation 2016.

Matters to be specified in the interim report and final report are contained in sections 47 and 48 of the draft Strata Schemes Management Regulation 2016.

[7] The building bond will be payable irrespective of whether the building work is held to breach the statutory warranties under Part 2C of the Home Building Act, or whether the developer is liable to the owners’ corporation or any owner of a lot in respect of that work.

A developer may be subject to a fine of up to $22,000 if it fails to provide the building bond prior to completion of the building work, and an occupation certificate will not be issued until and unless the building bond has been provided (Division 3, Part 11).

[8] See section 51 of the draft Strata Schemes Management Regulation 2016.

[9] See section 207 of the Act.

[10]    High rise residential buildings which have a rise of more than three storeys and contains two or more separate dwellings.

[11] There is a general exemption for construction of new multi-storey residential building, which do not require insurance cover under the Home Building Compensation Fund. See Home Building Compensation Fund Fact Sheet published May 2016 by NSW Fair Trading and Division 6 Exemptions relating to insurance, section 56 of Home Building Regulation 2014..

[12] See section 18E of the Home Building Act.

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.





CAAN had forgotten this terrible fact … that apartment owners in buildings of more than three floors do not have the coverage of Home Owners Warranty Insurance …they have to claim on the builder …


85 per cent of apartments are defective on completion (Engineers Australia reports)

UNSW’s City Futures Research Centre reported 85 per cent of respondents in buildings built from 2000 reported defects in the construction of their buildings

HOW can it be regarded that we have “Fair Trading” in NSW because developers provide little choice apart from high-rise apartments?

-storey upon storey they make a motzer

“The HOME BUILDING COMPENSATION SCHEME covers new houses and multi-unit residential buildings up to three storeys high.”

no cover for multi-unit buildings more than three storeys high

-exemptions also apply to certain types of retirement villages


To find out more view:

For consumer protection buy a fridge, not a flat

For too long governments have ignored the key stakeholder in the apartment building boom: the resident.

In fact, under current consumer laws, you receive more protection buying a refrigerator than a $1 million apartment.

Play Video

Government and opposition argue about Opal Tower

Play video


Government and opposition argue about Opal Tower

Planning Minister Anthony Roberts says New South Wales has one of the most stringent planning systems in the country.

This fundamental lack of protection for apartment owners and residents only gives rise to a loss of public confidence in the entire strata system.

With population projections showing NSW will be home to 9.9 million people by 2036, and 70 per cent of newly approved dwellings estimated to be apartments, a significant loss of confidence in strata living would be devastating for the state.

You would think that such a reliance on apartment living would see governments ensure that citizens who live in vertical villages are protected if things go wrong. Sadly, this is not the case.

Apartment owners in NSW, and across the country, have little consumer protections, while developers are not held accountable for their actions.

In an effort to encourage growth through apartment construction, governments have whittled away these consumer protections.

As a result, we risk the real possibility of having thousands of new apartments that no one has the confidence to buy.

The 36-storey Opal Tower has sparked a debate about building quality.
The 36-storey Opal Tower has sparked a debate about building quality.CREDIT:AAP


This has come sharply into focus with the Opal Tower fiasco, but it is a problem that has been steadily building as new apartments have sprung up and governments have happily turned a blind eye.

According to research from the UNSW’s City Futures Research Centre, 85 per cent of respondents in buildings built from 2000 reported defects in the construction of their building. These are first home owners, young families and retirees on fixed incomes who are faced with shoddy work and little protection.

The occurrence of building defects in residential strata space became an issue with the advent of private certification, which was introduced for the Sydney Olympics to ensure development kept up with demand.

As far back as a 2002 NSW inquiry into quality of buildings, and more recently at a 2017 Senate inquiry into flammable cladding, the Owners Corporation Network and others have also repeatedly raised the serious issue of defects and the certification process.

We cannot turn the clock back and do away with the private certification process. It is too entrenched. We depend upon it too much.

The private certification process does not guarantee a quality build because within this process there is a fundamental lack of accountability, responsibility and duty of care which is at the root of the residential strata building defects issue, played out at large in Olympic Park.


The Opal Tower is just one example of the many homes built with defects.

Water damage, dangerous mould: Why we need a building defects inquiry


*The duty of care issue was highlighted in 2014, when the High Court held Brookfield Multiplex did not owe a duty of care to the owners of a building in Chatswood to remediate defects.

The position of vulnerable consumers who sign standard form contracts has been left exposed and uncertain.


The High Court suggested it fell to governments to bridge this common law gap to ensure consumers were protected, and builders and developers held to account. So far no government in any state or territory has taken action to build a bridge over this defect in our consumer law.

A statutory duty of care would ensure the buck stops with builders and developers, not innocent homeowners, when things go wrong.

The creation of such a duty delivers accountability and responsibility to both the construction and certification processes and puts the responsibility where
it belongs.

Accountability will encourage a much-needed cultural shift in the building industry, where a lack of accountability has been a hallmark for far too long.

It’s time for governments to adopt a policy that ensures people who buy off the plan have better consumer protections than they have when they buy a fridge.

The problems with the Opal Tower must be a catalyst for action from government. Ensuring consumer protections will ultimately be positive for all stakeholders.

If governments fail to act, there will undoubtedly be more issues and zero accountability, which will continue to undermine confidence in this vitally important form of housing.

Stephen Goddard is chair of the Owners Corporation Network.


Government and opposition argue about Opal Tower





 REAL ESTATE nightmares and Sydney STRATA Disputes — what happens when your neighbour is a bully

STRATA LIVING is the fastest growing form of residential property ownership in Australia … storey upon storey the developer makes a Motzer …-more than half of the new dwellings in Australia are strata-titled

more than 76,000 residential strata schemes across NSW

-almost 60 per cent of those are in the greater Sydney area

-in the past decade, the number of strata schemes in NSW has risen by an average of about 1,200 per year

When you buy into a Strata-titled apartment look forward to “a self-appointed building manager” … and what goes with that appointment …

THANK the Property Sector Lobbyists and their ilk for such misery … and to add to your woes developers and RE Agents can secretly bribe 75% of the owners to sell out …  to force the remaining 25% to sell out … NSW INC Strata Law changes.


VIEW and Search Caan Website to find out more!

 Real estate nightmares and Sydney strata disputes — what happens when your neighbour is a bully


Silhouettes of a man and woman screaming

Experts say taking legal action over a neighbourhood dispute can be emotionally draining.  PIXABAY


It did not take long for Grant* to come across a classic power-tripping neighbour.

He bought into a small block of strata-titled townhouses in Sydney several years ago.

The first sign of trouble was a request for money to cover work that had been completed on the building before he lived there.

“The difficulty is the personality,” Grant said.

“This neighbour was acting as though he was the landlord.”

It was the beginning of a frustrating pattern.

A small space of common property in a yard became the subject of endless disagreements, as did the family’s request to put up a fence for safety and privacy.

Its colour, location and height were all put under the microscope.

“It became apparent he was never going to say ‘yes’,” Grant said.

“He was a sort of dictator in our strata block, and he could never agree to peace.”

Apartments under construction in Sydney

PHOTO Strata is Australia’s fastest-growing form of residential property ownership.



The neighbour sent more than 120 emails about various grievances — eventually, Grant stopped responding, and hired lawyers.

“We would never buy into a strata again,” he said.

“It was a pure manipulation and power thing. Truly, it takes your breath away.”

The growth of strata

Strata is the fastest growing form of residential property ownership in Australia, according to a 2015 City Futures Research Centre report.

It estimated over half the new metropolitan dwellings being built Down Under were strata-titled.

There are more than 76,000 residential strata schemes across NSW, according to the latest registration figures from NSW Land Registry Services.

Almost 60 per cent of those are in the greater Sydney area.

The data shows in the past decade, the number of strata schemes in NSW has risen by an average of about 1,200 per year.

Every building has onea self-appointed building manager who has lived there the longest,” one real estate agent told the ABC.



What is the future of Australia’s housing market?


The most common advice for those grappling with escalating disagreements is to try and sort things out among yourselves.

If you decide to take legal action, you could end up at the NSW Civil and Administrative Tribunal — an independent body and court alternative that deals with landlord and tenant disputes, among other issues.

Regardless of whether you rent or own your property — or how long you’ve lived there — everyone is bound equally to the by-laws under NSW’s Strata Schemes Management Act.

John Douglas, special counsel at Colin Biggers & Paisley, said the legislation set out high-level principles.

“Sometimes the way such principles manifest in daily life may not be as black and white as in the legislation,” he said.

The building’s size can be important — in large strata schemes residents can benefit from anonymity.

In smaller buildings, the strata committee may be influenced by one dominant resident.

“Disputes can first attempt to be resolved with the building management, but in a smaller building where the strata committee may be controlled [or] heavily influenced by the neighbour in question, things can become tricky,” Mr Douglas said.

“The next option is through Fair Trading’s strata-mediation service.”

‘A hefty emotional toll’

Fair Trading’s strata mediation service is often the first option to solve small grievances — like noise complaints, or issues with pets — in a building.

Mr Douglas described the tribunal as far more user-friendly and cost-effective than the court system.

“These cases tend to be more straightforward and will not involve barristers and eventual High Court judgements,” he said.

“But even if you’re off to mediation and, failing that, the NSW Civil and Administrative Tribunal, any sort of dispute is time consuming and can be quite emotionally and mentally draining.

“It’s one thing to have rights, it’s another to actually spend the time and energy enforcing those rights.”

Grant said it was “totally understandable” disputes drove some people to move, rather than endure ongoing awkwardness.

“There was quite a hefty emotional toll,” he said.

“If it’s just business you don’t get so wound up about it, but when it affects your home, it’s quite damaging.”

He said people battling an abrasive neighbour should do their research.

“Be absolutely sure via a lawyer what your rights are,” he said.

“And under no circumstances expect the body corporate to be reasonable, fair or generous.

“You’re just not going to get it.”


Silhouettes of a man and woman screaming





APARTMENT OWNERS Unite against politicians on Airbnb & Flammable Cladding!

IN NSW the Owners Corporation Network in response to the issues of AIRBNB and their ilk of short-term lets and flammable cladding  are calling on all the blocks identified by the NSW Government as being at risk to work together in a Flammable Cladding Action Group


These issues are posing a big Election threat for the NSW Government following their concerted push to house the community in apartments!


LET’s hope it comes back to bite ’em!


Airbnb and cladding unite apartment owners against politicians

Richard Wynne in Richmond probably should be wondering about a pro-strata campaign.
Richard Wynne in Richmond probably should be wondering about a pro-strata campaign. Pat Scala


by Jimmy Thomson


It has been said in many ways, many times, but there is a fundamental truth in politics – if you want people to unite, give them a common enemy.

So it should be no surprise that the recent challenges to apartment owners and residents in our most populous states have brought them together.

In NSW, the enemies have been the threat of out-of-control commercial short-term holiday letting through Airbnb, Stayz and their ilk, followed by the targeting of 435 apartment blocks that have been told to check their cladding to see if it’s flammable, then do something about it.

In response to both challenges, the apartment owners’ lobby group the Owners Corporation Network (OCN) stepped up and was hugely influential in NSW ending up with by far the best short-term letting laws for apartments in Australia.

Taking on the challenge of flammable cladding, the OCN is now calling on all those blocks identified by the government as being at risk to work together on its Flammable Cladding Action Group.

The action group’s stated aims include providing a platform for collective legal action against installers and developers, a stronger united voice in talks with government, raising finance, and negotiating more favourable deals to get the work done (especially for those buildings left holding the bills after warranties expired).

Flammable cladding has also galvanised apartment owners in Victoria, with lawyers pulling together affected buildings with a view to launching class actions against the same developers who were responsible for different blocks.

But it’s the bitter battle over short-term holiday letting that has left the longest-lasting and deepest scar.

Thanks to new, laissez faire holiday letting laws, the 75 per cent increase in Airbnb lets in the Victorian capital over the past 12 months is unlikely to have slowed.

According to data scraping website InsideAirbnb, more than 12,000 of the 20,000 Victorian listings are whole homes or apartments, many of them commercial enterprises. Other agencies are offering similar services so you can assume the market is larger.

Election threat

When the Victorian government pushed through its laws this year, the main campaign group We Live Here vowed that this would not be forgotten come election time.

But would that make any difference? Looking at inner city seats, where apartment blocks tend to be concentrated, in Prahran the Greens’ Sam Hibbins has a margin of only 0.8 per cent. Even with Liberals on the nose nationally, a disruptive focused campaign could easily turn that seat from Green to blue.

Possibly more significantly, Labor’s Martin Foley in Albert Park and, especially, Richard Wynne in Richmond could and probably should be wondering about any pro-strata campaign.

Why? The owners and renters who live in areas where commercial holiday lets are most common suffer most from their intrusion, and with no appreciable benefit.

The thousands of commercial “hosts” who love the holiday-letting laws obviously live elsewhere. It will be interesting to see if any politician of any hue is prepared to risk the considerable ire of Airbnb and woo the micro-constituency of apartment residents.

In NSW, the creaking Liberal coalition government was dragged kicking and screaming to its pro-strata holiday-letting laws. But it could yet be punished by apartment owners for not doing enough to protect them from developers, especially with regard to cladding.

Innovation and Better Regulation Minister Matt Kean has gone on record saying that developers should pay but the onus so far has been put on owners to check and then deal with flammable cladding as best they can, with some individuals facing bills of $60,000 or more.

Whatever happens at their elections, both state governments have achieved something significant – they’ve got apartment owners talking to each other.

Jimmy Thomson edits the strata living advice website Different states have different strata laws.

AFR Contributor






NSW Supreme Court rules against sunset clawbacks in landmark win for buyers

A developer persuaded some buyers to rescind, however 12 refused realising he was trying to cancel their contracts to resell at a higher price …
so he took them to court!
This meant a 2 year legal battle for buyers but fortunately the changes to the legislation were tested and protected these buyers against the developer trying to enact sunset clawbacks to increase profits.

The Harmony development in Surry Hills.

NSW Supreme Court rules against sunset clawbacks in landmark win for buyers

NEW STRATA LEGISLATION: First Collective Sale Cases Hit The Court


First Collective Sale Cases Hit The Court


Up until recently, there have been no reported cases of where the Land & Environment Court has dealt with an application to permit the collective sale or redevelopment of a strata scheme under the new strata laws.

That changed on 19 February 2018, when the Land & Environment Court issued preliminary decisions in two cases involving proposals for the collective sale of two strata schemes in Sydney.

So, what can we learn from the first two collective sale cases? To find out download this paper Collective Sales Cases Hit the Land and Environment Court.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.


COMPULSORY ACQUISITION: Evictions versus holdouts: How to painlessly dissolve a Strata Title

No doubt some NSW Pollies have such full pockets (that their Daks are dragging down) having given their developer mates all they could wish for … not the least of the list being the NSW Strata Law changes …

The Government policies leading to the “new” Australian norm of living in fugly, high density, concrete, intensive-farming-like containers … is causing Australians to lose ACTUAL OWNERSHIP. Whilst there may be legislation for compulsory acquisitions, if you live in a STRATA situation, the current legislation means that Developers can approach an Owners Corporation to vote on whether they agree to sell the building to them.  And depending on the “deal”… the Owners may receive a fair or not fair payment.

But will any payout ever be sufficient to re-establish in the same location or better… DON’T count on it🤨

The Developer/majority Owners will control your fate, and you may well lose your location to established relationships and support services and groups.



Such a sell-out may well mean, e.g. an elderly vulnerable resident is forced out of their home against their wishes … and with 85% of new dwellings found to be defective on completion (Engineers Aust. reports); externally clad in flammable polyethylene aluminium cladding, an additional lift levy and an inadequate sinking fund – one may get more than they wish for!  At least the 60s walk-up does not have these issues …

Evictions versus holdouts: How to painlessly dissolve a strata title