NSW Labor promises strata commissioner to tackle defects

EXCLUSIVE: By Sue Williams and Jimmy Thomson

A dedicated Strata Commissioner to protect apartment owners and residents and restore confidence in the strata sector will be introduced by the Labor Party, should it win office at the upcoming state election.

Shadow Minister for Better Regulation Yasmin Catley has confirmed to the Sydney Morning Herald that Labor is planning to create an office to oversee all strata issues, but with particular focus on defects in newly-constructed buildings.

“Every year, we have tens of thousands of people moving into strata apartments for the first time in their lives,” says Ms Catley. “They have no idea that they have rights, let alone what those rights are.

“This is the fastest growing sector on housing in the state but the laws are so complicated, and vested interests are always ready to confuse the issues. It’s time strata owners had someone in power who is focussed on their needs.”

Currently, strata in NSW is overseen by Fair Trading which also looks after consumer issues such as broken or dangerous toys and appliances, motor mechanics, paintball centres and tattoo parlours.

But a series of strata scandals, including the cracking at Opal Tower and dangerously flammable cladding on buildings, has convinced the Opposition that a strata commissioner is necessary.

That’s being fuelled too by the latest controversy – allegations that the two-per-cent defects bond introduced to help owners fix defects is being sucked up by small-scale developers cutting corners saying shortcomings will be covered by the bond.

Ms Catley says, in addition, new home-owners are often reluctant to make too much fuss over their problems because they are worried that adverse publicity would expose issues to prospective buyers and affect the value of their homes.

“The first thing this commissioner will do is look at the government’s so-called defects bond of two per cent, to find out if that is offering any real protection,’ she said.

“And apartment-owners are being bullied into silence and have to risk their homes – including by hiring lawyers at considerable financial risk – just to get what they paid for. There is nobody in government who is focussed on their needs and that’s something we intend to change.”

The revelation is being welcomed by the peak consumer group for apartment-owners, the Owners Corporation Network.

“A commissioner solely focussed on strata is long overdue,” says Phil Gall, chair of OCN, which is running a seminar on cladding issues on March 16 in Sydney. “Fair Trading is overloaded with concerns that have absolutely nothing to do with housing, home ownership or community.

“Far too many stories cross our desks of people being misled and misinformed about their rights, then channelled into a dispute system that is all about compromise, rather than right or wrong. You just have to look at how the short-term letting, cladding and defects issues have been handled to realise a strong strata-focussed voice in the system can only be an improvement.”

He said everyone would welcome the creation of a Strata Commissioner under the umbrella of a Ministry of Housing that oversaw every aspect of residential development, from planning to defects resolution and community concerns. That comes on top of Labor’s planned overhaul of the building, development and residential sector by creating a new Building Authority and drafting a new Building Act, while removing property services out of Fair Trading into an expanded building and property services division.

The Real Estate Institute of NSW recently removed itself from government liaison committees because of dissatisfaction with the current system.

Apartment-owners battling problems in their buildings are also pleased. Ross Aitkin, who recently sold his three-bedroom house to downsize into a new apartment building by the railway line in Sydney’s west, says buyers were promised soundproof glass, but the windows turned out to be just standard glass.

“Sometimes we have four locomotives going past and they take ages!” he says. “The noise can be very loud and very distressing but a consultant quoted us $30,000 for just the reports to take it up with the developer, and that’s before we even get into court …”

Ms Catley said that kind of dilemma is unforgiveable. “Ordinary people, especially first-time homeowners, should not have to chase developers to get what was promised in their sales contract,” she says.

“They don’t even know if they want to make a claim as the costs of lawyers and the effect on the value of their homes might be more than it’s worth.”

Even when defects are repaired, any controversy in the media or even in the buildings’ committee meeting minutes can seriously affect values. Owners in the Opal Tower have been offered half the purchase price of their flats, for instance, following publicity around the cracks that appeared on Christmas Eve last year.

“There are more than two million people living in strata, managing around $350 billion in assets,” said Ms Catley. “Labor thinks it is important that people living in apartments have the support they need, and the Commissioner is a step in that direction.”

A version of this story first appeared in Domain and in the Sydney Morning Herald.