2018 - 05 -07 - SDSS PresentationDEFECTS 2 ... Floor – floor and wall tiles unless on a boundary wall

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  • DEFECTS 2.0 THE MYSTERIES OF DEFECTS EXPLAINED

    Strata Defect Specialists Sydney / 9 May 2018

    Dr Pat O’Donnell Nicholas Hudson JP

  • INTRODUCTION TO SYDNEY DEFECTS SPECIALISTS SYDNEY (SDSS)

    KNOWLEDGE KNOWLEDGE AND EXPERIENCE

    The qualifications and experience of our staff as well as understanding strata laws and building requirements, gives our team the knowledge needed to accurately carry out all types of building inspections.

    TECHNOLOGY

    We have advanced

    technology and systems

    • We have the tools and equipment necessary

    • We are accredited and trained to safely deliver an efficient and professional service

    SERVICE

    At SDSS we do a broad range of building inspections and reports:

    • Defect inspections for owners, developers and builders

    • On-Completion inspections

    • Expert witness inspections and reports

    • Replies to expert reports

    sdss.net.au

    DEFECTS 2.0

  • INFORMATION AND FACTS

    KNOWLEDGE

    • Builders give a warranty on their work (2 years minor, 6 years major)

    • Owners corporation is responsible for dealing with common property defects

    • Lot owners are generally responsible for internal fittings and fixtures

    DEFECTS REFERENCES:

    • New South Wales Guide to Standards and Tolerances 2017 produced by New South Wales Fair Trading for guidance on defects

    • National Construction Code Series (NCC), Volumes 1 and 2, of the Building Code of Australia (BCA)

    • Contract documents (design documentation, specifications, plans, etc)

    • Australian Standards

    • Manufacturer’s installation instructions

    • Where there is any contradiction or difference between the Guide and an Act, a regulation, the BCA or a building contract, all of these take precedence over the Guide

    DEFECTS 2.0

  • STANDARDS - REFERECNES

    DEFECTS 2.0

  • STANDARDS - REFERECNES

    DEFECTS 2.0

  • APPEARANCE DEFECTS

    KNOWLEDGE

    • Most ‘minor defects’ relate to appearance

    • Generally, variations in the surface colour, texture and finish of walls, ceilings, floors and roofs, and variations in glass and similar transparent materials are to be viewed where possible from a normal viewing position, defined as looking at a distance of 1.5 m or greater (600 mm for appliances and fixtures)

    • With the surface or material being illuminated by ‘non- critical light’, which is the light that strikes the surface, is diffused and is not glancing or parallel to that surface

    • Slight variations in the colour and finish of materials do not always constitute a defect

    • Serious discolouration, roughness and poor quality workmanship to finishes in liveable areas are usually considered defects

    DEFECTS 2.0

  • APPEARANCE DEFECTS

    KNOWLEDGE

    DEFECTS 2.0

  • EXAMPLES OF CRACKING DEFECTS

    KNOWLEDGE • Cracking in Concrete paving must exceed 1.5mm

    to be considered a defect

    • Cracks to Concrete slabs are defective where they are Category 3 (Moderate

    2mm to 4mm width) and Category 4 (Severe 4mm to 10mm width)

    • Cracks in Masonry walls are defective if Category 2 (Slight < 5mm), Category 3 (Moderate 5mm to 15mm) and Category 4 (Severe 15mm to 25mm)

    DEFECTS 2.0

  • COMMON CATEGORIES OF DEFECTS

    KNOWLEDGE

    • Appearance: unsightly; incomplete work; paint smears; cracks; poor quality workmanship to finishes

    • Water leaks; showers; roofs; skylights; walls/flashings; windows; planter boxes

    • Drainage issues; insufficient falls to drains; ponding water; flooding

    • Fire protection defects: fire doors including rating & gaps; emergency lighting and exit signs; fire stair dimensions; penetrations through fire rated structure; fire hydrant and extinguisher locations; smoke detectors; FIP; egress distances; cladding system fire rating; sprinklers

    • NCC compliance, handrails and balustrades, materials and fixing methods; ponding water

    • Building Services: electrical; mechanical; hydraulic; security; communications

    • Structural – rare other than cracking to brick work and concrete

    DEFECTS 2.0

  • COMMON CATEGORIES OF DEFECTS

    DEFECTS 2.0

  • CURRENT STRATA DEVELOPMENT INDUSTRY SITUATION

    • As the end of the warranty period approaches owners corporations are encouraged to commission a defects report

    • Lawyers and consultant are marketing their services to Strata Managers and Strata Committees

    • Builders and Developers are being ambushed by massive defect claims, many hastily prepared to beat the warranty expiration time

    • Some claims are being exaggerated to get into the supreme court (>$500k)

    • Owners corporations are spending $$$K on consultant defect reports

    • Builders and Developers are spending $$$k responding to the defect reports with their own experts

    • Both sides are spending $$$$k on lawyers

    • Most of the defects are petty incomplete work, bad finishes, water ponding, etc

    • A small number of owners get irate at minor defects and are frustrated. Their anger is infectious

    • The owner’s consultants tend to pick on everything no matter how minor to justify their fees

    A massive Defects

    industry has emerged

    Client Relationship Management is essential to avoid legal conflicts

    Attention to detail and quality control in finishing projects

    could save a lot of $$$$$$ Much cheaper to identify and fix

    defects before handover

    DEFECTS 2.0

  • WHAT TO DO IF YOU GET HIT WITH A DEFECTS REPORT?

    NCAT or Courts Engage lawyer who will

    advise and brief experts - $$$

    SDSS Inspection & Expert Report in response - more expensive $$$

    Specialist experts as required eg: fire, electrical,

    mechanical, structural - $$$

    EXPENSIVE

    Fix defects (can be least expensive option) or compensate owners corporation

    Legal notices / lawyers

    Dispute defects

    SDSS review & Initial consultation -

    inexpensive $

    Agreed defectsAgreed defects

    No legal notices

    Defect reports

    DEFECTS 2.0

  • Contracts post 1/1/18

    Construction period

    Developer must nominate a Building Inspector within

    12 months

    Final Report 18 to 24 months

    after completion

    Interim Report 15 To 18 months

    after completion

    Essential to have qualified, experienced, professional and independent building inspectors Essential to have good communications and working relationships between all parties

    NEW STRATA LEGISLATION - TIMELINE (PART 11, MANAGEMENT ACT)

    Strata Schemes Development Act 2015 and Strata Schemes Management Act 2015 – and related regulations

    • Both commenced on 30 November 2016 • Except for building defects provisions which commenced from 1 January 2018

    Contract Executed

    Developer pays 2% bond

    OC – Completion

    Strata Plan Registered Initial Period

    Developer Control

    Owners Corporation must approve Building Inspector 1st AGM after initial period

    Builder/Developer must rectify defects before

    bond returned

    DEFECTS 2.0

  • Contracts post 1/1/18

    Construction period

    Developer must nominate a Building Inspector within

    12 months

    Final Report 18 to 24 months

    after completion

    Interim Report 15 To 18 months

    after completion

    Independent defects inspection and fix before handover – good customer relations – good marketing Inspection and photo record before handover - evidence against false defect claims later

    SOLVING DEFECT ISSUES BEFORE THEY BECOME A PROBLEM

    Contract Executed

    OC Completion

    Strata Plan Registered Initial Period Developer Control

    Building Inspector Appointed – 1st AGM

    Builder/Developer must rectify defects before bond

    returned

    Identify and fix defects before handover

    – don’t wait for owners to find problems and get a bad first impression

    • Inspection much easier before units occupied – master key access - no waiting for occupants - no furniture

    • Defect repairs easier before units occupied and while subcontractors on site

    Opportunity Opportunity

    DEFECTS 2.0

  • Contracts post 1/1/18

    Construction period

    Developer must nominate a Building Inspector within

    12 months

    Final Report 18 to 24 months

    after completion

    Interim Report 15 To 18 months

    after completion

    Waiting 15 to 18 months will likely result in perpetuation of the current ‘defects industry’ situation On-Completion reports will help in countering any exaggerated Interim Reports

    SOLVING DEFECT ISSUES BEFORE THEY BECOME A PROBLEM

    Contract Executed

    OC Completion

    Strata Plan Registered Initial Period Developer Control

    Building Inspector Appointed – 1st AGM

    Builder/Developer must rectify defects before bond returned

    SDSS are happy to provide economical fee proposals for ‘on-completion’ independent inspections

    • We need to dis