Dealing with Defects

Building defects — faults that have existed since construction or are triggered later on by faulty original construction — are widespread problem. They can impact on the quality and liveability of both private and common areas; affect property values and rental incomes; and can result in ongoing damage to the building. Defects can result from inadequate workmanship going unnoticed and/or the quality of component parts of the building: building component manufacturers provide their own certifications and don't always clarify limitations on application and capacity. After discovery Owners can also face many difficulties in having defects fixed once they are discovered. Strata scheme operating costs can increase to cover emergency and other repairs, investigations and legal actions; owners, committees and managers are distracted from usual management when dealing with defects; and conflicts can arise between owners, committees, managers, developers and others over how to deal with defects. Challenges for strata owners It is also much more difficult for strata owners to get defects fixed than it is for owners detached houses. In part, this is because: Strata schemes are made up of multiple owners, which can lead to delays in discovering defects, deciding on the best (technical and legal) solution, making decisions and implementing actions. The contract to build the strata scheme is between the developer and builder. The owners corporation is not a party to it and cannot use it to get the builder to rectify the problems. Instead, strata schemes have to rely on statutory rights or negligence claims. Home Warranty Insurance is no longer compulsory for the construction of buildings over 3 stories. Because defects in buildings can worsen and cause further problems, they should be addressed as promptly as possible. If there is not sufficient money in the sinking fund to cover immediate repairs, a special levy may have to be imposed. Ref: Strata Community Aust

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