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Building certifiers in NSW are bracing for a major audit, as fears surface that hundreds of new properties have been given the all-clear in spite of their defects.
The Opal Tower: What’s happened?
On Christmas Eve, faults appeared in the newly-opened Opal Tower in Sydney Olympic Park, causing a mass evacuation of residents.
The building remains under investigation, and residents have been told by the builder and developer to stay away. About 300 residents have been relocated, but a handful are refusing to leave.
The high-rise residential tower has 392 apartments and is approximately 19km west of the Sydney CBD. It was positioned throughout development and launch as a “strong” opportunity for property investors, given its proximity to public transport and arterial roads.
The impact for NSW
The robustness of NSW’s quality and safety checks for new builds across the board have now been called into question. The Opal Tower was only opened in August, and was given the green light by building certifiers, who administer quality and safety regulations.
An immediate audit of private building certifiers will be launched by the NSW government in response to the Opal Tower fiasco.
Certifiers are responsible for signing off on the safety and compliance of new properties. Local councils were once responsible for this process, but the industry was privatised in the early 2000s, and is now in effect self-regulating.
The NSW government has also marked plans for a “name and shame” register of dodgy certifiers. This is one to watch for property investors, particularly if they fear their property is defective, and their certifier makes the list.
How did this happen?
The Opal Tower situation is one symptom of a much larger problem in NSW: quality has been compromised amid the state’s rush to expand.
New homes in NSW are a core part of the government’s 20-year development and infrastructure strategy. The Liberal Party’s vision for a “metropolis of three cities” in the Greater Sydney Region has seen massive residential developments spring up in the west and south-western suburbs in particular.
The influx of new-builds has exposed existing weaknesses in the building industry, which is that the regulations governing quality and safety are often not properly enforced by certifiers.
As such, Smart Property Investment has long been concerned that the resulting poor quality of these new development outweighs the obvious benefits of buying in suburbs set for major infrastructure upgrades.
The NSW government has been aware for some time about flaws in the certifier system, and took steps to correct it. In October, it released a consultation paper on options for improving the independence of certifiers.
During the consultation period, groups like the Institute of Architects raised the significant conflict of interests in the certification process.
“The Institute is aware of the potential for conflicts of interest to arise between private certifiers’ regulatory responsibilities and their commercial interests, and the impact this may have upon the integrity of their work,” the Institute said.
“We note for example that in the case of a development, where the benefit of the development consent passes to the purchaser, the purchaser has not normally had the opportunity to exercise the same choice in the appointment of the certifier. As such, where the interests between developer, certifier, and purchaser are not aligned, there is the potential for the purchaser to suffer loss,” it said.
“To this end, we acknowledge and affirm the importance of establishing appropriate parameters for consumer choice in the context of building certification to ensure independence, quality, health and safety.”
Resources for investors
For all building defect concerns, visit Fair Trading NSW.