Transcript

DEFECTS 2.0THE MYSTERIES OF DEFECTS EXPLAINED

Strata Defect Specialists Sydney / 9 May 2018

Dr Pat O’Donnell Nicholas Hudson JP

INTRODUCTION TOSYDNEY DEFECTS SPECIALISTS SYDNEY (SDSS)

KNOWLEDGEKNOWLEDGE 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 buildingcontract, all of these take precedence over the Guide

DEFECTS 2.0

STANDARDS - REFERECNES

DEFECTS 2.0

STANDARDS - REFERECNES

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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

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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

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COMMON CATEGORIES OF DEFECTS

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CURRENT STRATADEVELOPMENT 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

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WHAT TO DO IF YOU GETHIT WITH A DEFECTS REPORT?

NCAT or CourtsEngage 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

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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 inspectorsEssential 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 pays2% bond

OC – Completion

Strata Plan Registered Initial Period

Developer Control

Owners Corporation must approve Building Inspector1st AGM after initial period

Builder/Developermust rectify defects before

bond returned

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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 marketingInspection and photo record before handover - evidence against false defect claims later

SOLVING DEFECT ISSUESBEFORE THEY BECOME A PROBLEM

Contract Executed

OCCompletion

Strata Plan Registered Initial Period Developer Control

Building InspectorAppointed – 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

OpportunityOpportunity

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’ situationOn-Completion reports will help in countering any exaggerated Interim Reports

SOLVING DEFECT ISSUESBEFORE THEY BECOME A PROBLEM

Contract Executed

OCCompletion

Strata Plan Registered Initial Period Developer Control

Building InspectorAppointed – 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 disclose prior engagement with developer if nominated for formal inspection process a year later

• If owners are happy with the developer and their building they are more likely to endorse nominated inspector

On-CompletionInspection

InterimReport FinalReport

DEFECTS 2.0

QUESTIONS

Dr Pat O’Donnell

[email protected] 720 750

Nicholas Hudson JP

[email protected] 339 203

BRUCE

BOES

Balcony-Columns, door, window & wall, painting of balcony ceiling, railings, water leak through wall

Ceiling or Roof – Ceiling cornices, false ceilings if registered on strata plan, guttering, membranes, plastered ceilings, vermiculite ceilings.

Courtyard – Fencing – if shown as a thick line on a strata plan then deemed a common wall. Trees – existing mature trees that extend past the stratum limits of a lot including damage and trimming costs.

Electrical – A/C systems serving more than one lot. Garage door openers if original equipment. Fuses and fuse board in meter room. Intercom handset. Light and power wiring serving more than one lot. Light fittings serving more than one lot. GPOs serving more than one lot or in common property. Smoke detectors connected to the building fire board.

Entrance Door – Door locks, automatic closer, security door repair if originally installed.

Floor- Floorboards or parquetry flooring (structure only) unless installed by owner. Mezzanines and stairs within lots. Sound proofing (magnesite) floor base.

General – Damage to common property by tenant. Dampness in a unit coming from outside. Exhaust fans in communal ducting. Hot water services serving more than one lot. Letter boxes. Painting external to a lot. TV aerial and associated wiring serving more than one lot.

Plumbing – Blocked floor drain or sewer in common property. Burst pipe in common property or outside the lot. Damage to a unit after water leak that strata have repaired. Main stop cock to unit. Water leaking from bath or shower and affecting another lot or common property. Water leaking through tiles or from one lot and affecting another lot or common property.

Whose Responsibility to Maintain – Strata or Owner?*This is not an exhaustive list, but a general guide.

STRATA

DEFECTS 2.0

BRUCE

BOES

Balcony - Awnings

Ceilings or Roof – false ceilings inside the lot, paintwork inside the lot.

Courtyard – Deck, pergola, privacy screen, louvres or steps within a lot (regardless of whether constructed within that lot). Fencing – if shown as a thin or dotted line on the strata plan (Dividing Fences Act).

Electrical – A/C systems exclusive to a single lot. Fuses and fuse board within the lot. Insinkerators. Intercom wiring. Light and power wiring, light fittings, light switches and GPOs serving one lot. Stand alone smoke detectors, stoves, telephone wiring and sockets. TV and Internet wiring and sockets.

Entrance Door – Additional door locks to the original. Entrance door to lot. Keys, security cards, etc.

Floor – floor and wall tiles unless on a boundary wall or floor, then strata. Floorboards or parquetry flooring (lacquer or staining on top). Internal carpets, floating floors, linoleum, vinyl or cork tiles.

General – Built-in wardrobes or kitchen, laundry and other cupboards. Cracks in walls – exception where the crack is on a boundary wall or cornice and is greater than 1mm. Dishwasher. Exhaust fans inside the lot. Hot water service exclusive to a lot. Internal doors and paintwork. Pavers. Skirting boards and architraves – exception when they are on a common wall. TV aerial and associated wiring.

Plumbing – Burst pipe within the lot. Cabinets and/or mirrors. Cracked bath or hand basin. Dampness in a lot coming from condensation from the inside. Dripping ‘S’ bend below sinks, basins. Leaking pipes under shower, sink, laundry tub, bath or hand basin. Plug and waste in bath, sinks, tubs. Shower screen repairs. Toilet bowl or cistern. Water leaking from a bath, shower, sink, laundry tub or hand basin not affecting another lot. Leaking taps. Water leaking through tiles not affecting another lot. Damage to a lot caused by any water leak mentioned above as a result of the problem itself.

Whose Responsibility to Maintain – Strata or Owner?*This is not an exhaustive list, but a general guide.

OWNER

DEFECTS 2.0