SCA Report

The human cost of building defects

The issue of poor construction quality in the high-rise building sector is one most readers of Resort News will be acutely aware of. The eff ects can be disastrous fi nancially, personally and can even be potentially fatal. While facts, fi gures, and images of poor construction are what normally inform our discussions around these issues, the real focal point, like anything with strata, needs to be about the people.

Tragically, 98 people died when Champlain Towers collapsed on the Miami beachfront last year. Many more were injured, lost their belongings, and were left without their home. Owners in Mascot Towers are facing ongoing exorbitant legal costs, loss on purchase price of 70 to 80 percent and in many instances bankruptcy. As we know, there is evidence that bankruptcy and this sort of fi nancial stress leads to signifi cant mental health issues. Former residents of Mascot Towers have repeatedly and publicly described their experience as “a nightmare”. The impact on people should not be underestimated: it is extreme.

New South Wales held an enquiry into building standards a few years ago and the submissions of many residents were heartbreaking: “I am now out of pocket over $550,000 (paid for by way of a mortgage) and I am still not living in my home due to major building defects, gross negligence, and unreasonable delay on the builders’ part… This whole situation has left me with medically diagnosed severe depression. “I will start by stating that words and numbers on a page cannot adequately convey the human pain and suff ering caused, fi rstly by the handful of individuals responsible for this sorry aff air but also the environment within which they were allowed to operate. “Besides the fi nancial cost, there is also a real hard to measure negative impact on time, health, relationships and ultimately quality of life in the past eight years for all concerned.” These are the real, human costs of poor-quality building that go well beyond what can be measured in dollars and cents or by construction codes. People can lose everything without doing anything wrong. When Mascot and Opal Towers made headlines across the country for all the wrong reasons and shone a light on poor building practices, as a strata manager my fi rst thought was for the aff ected residents. A home is supposed to be a place of sanctuary, where people feel safe and protected, yet these people have had their lives shatt ered through no fault of their own. Currently, a large majority of Australians live in detached housing, so many of us don’t overly concern ourselves with the issue when we remain personally unaff ected. However, this will change more rapidly than many think. Strata will dominate new developments, and this type of housing is where a lion’s share of Queenslanders will make their home over the coming decade. We must make adjustments now to ensure all Queenslanders are safe, secure and able to trust the integrity of their home. Recent history has shown that protecting high rise building quality needs to be a primary focus in achieving this goal. Many homeowners (whether of a unit, townhouse, or detached house) oft en have close to their entire net worth invested into their property. It is unacceptable and untenable to leave them without appropriate insurance coverage, particularly in the present environment. Due to a variety of market factors, several construction companies in Queensland, have recently entered liquidation. SCA (Qld) has received anecdotal feedback that many apartment buildings constructed recently by some of these builders are already facing issues in seeking remediation and recourse given the QBCC will not issue a direction to rectify to a company in liquidation. Owners in these buildings now face signifi cant fi nancial hardship to rectify oft en serious defects caused through no fault of their own. This is unjust and un-Australian. Consumers have protection from defective goods and services through most sectors of the economy. If a person buys a chair from a department store that breaks due to a defect, they can get a replacement or a refund. Most professions now mandate indemnity insurance to protect consumers from inappropriate professional conduct.

There is no such recourse for what is oft en a person’s biggest purchase, a property in a new development of over three storeys.

Apartments are increasingly the only option for many members of the Queensland community and to leave what oft en amounts to a huge portion of their net worth and substantial time, eff ort and emotional energy without any coverage is unacceptable.

This needs to change.

It needs to be understood that homes are an important source of stability and community for people, providing value that cannot necessarily be quantifi ed. This should warrant appropriate consideration by policy makers.

SCA (Qld) strongly supports and will continue to advocate to government for mandatory insurance for building construction above three storeys.

SCA (Qld) believes that the best run strata communities engender and promote just that - a sense of community. Community can only be created in an environment where people feel safe and secure.

Kristi Kinast,

President, SCA (QLD)

QBCC will not issue a direction to rectify to a company in liquidation