Don’t get over-excited. The new “dodgy developer” database announced this week by NSW Better Regulation Minister Kevin Anderson may well be a game changer, especially if adopted by other states, as the minister hopes.
But it’s not going to be a publicly available comparison website promoted by talking meerkats and the like.
The proposed ratings system, based on complex calculations of myriad metrics, from customer complaints to how long the companies have been in business will be “a ratings tool to help target developments which may be at risk,” according to a spokesman for Minister Anderson’s office.
It will sit on a computer somewhere accessed only by those who need to know – the civil servants and council planners who, it has to be said, don’t have a great track record for heeding warnings about bad actors in the apartment building game.
Sadly, this will not be the star-rating website for apartment developers and builders touted here in Flat Chat in July last year. However, the government spokesman added “there may be an opportunity to open it to other uses in the future.”
The plan announced by the NSW government this week, is to create a ratings system for developers based on their history in such areas as workplace safety, the longevity of their business, suspicions of “phoenixing” – serially liquidating firms to avoid debts – customer complaints, financial credibility and “dozens of other metrics”.
The proposed database will be allied to powers given to the NSW Building Commissioner to halt developments deemed to be risky and refuse occupation certificates – without which apartment sales can’t be settled – for poorly constructed blocks. Affected off-the-plan apartment buyers would have their deposits returned.
Needing to be seen to be doing something about a flawed construction industry regime that allowed a series of embarrassing fiascos like the Opal and Mascot tower evacuations, Minister Anderson will present his proposals to a meeting of interstate building ministers next month.
He is quoted as saying he hopes this will be a blueprint for tighter regulation across the whole country. One imagines the other states’ ministers will be saying “Onya, Kev! Terrific idea. Be sure to let us know how it goes …”
The idea of putting smaller-scale developers under greater scrutiny has considerable merit. The best advice for any prospective new apartment buyer is to stick with a developer who has been around for a while, especially one with a good record both in having fewer defects in their projects and dealing promptly with those it has.
But the big developers simply can’t construct enough new apartment blocks to meet the demands of our growing populations. Smaller-scale developers are needed to fill the gaps in the market and that’s where the opportunity for dodgy dealing arises.
Minister Anderson is right when he says the good developers in this country want the bad ones gone, although, to be fair, they haven’t exactly been organising protests marches to demand stricter building regulations.
The database and additional powers for the Building Commissioner will require the passage of the contentious Design and Building Practitioners Bill, which was withdrawn from Parliament last year after objections from Labor and the Greens.
After that, the critical issue will be whether or not the public will ever get access to, at least, the overall rating for each developer. I have my doubts – large companies of low esteem will fight that tooth and nail.
But if the government did go down the comparison website route, the changes they want would be dramatic and immediate, and that has to be a good thing for owners who always end up paying when high-rise towers turn out to be houses of cards.
This column also appeared in the Australian Financial Review.