Are Mondays Now Strata Defects News Day?
Strata buildings defects in the news [again], isn't great news [especially in Southbank] ...
Another short sharp pointer to interesting and newsworthy strata stuff …
Two weeks ago was Strata Defects Week and last week I said ‘I thought I had finished writing about strata building defects for a little while’ but reported about the major defects legal action against Toplace.
And, this week, there’s even more news about some major strata building defects from Charlotte Grieve of The Age in her article ‘City high-rise residents fear for safety amid ‘terrifying’ creaking’.
So, it’s looking like Mondays are becoming strata building defects news day.
According to the reporting in The Age, there are serious building creaking noises in 4 high-rise Melbourne towers that are unresolved and causing major problems for residents.
Australia 108, a 319m tower in Southbank, has had unresolved creaking noises since 2019.
Prima Pearl, a 225m tower in Southbank, also has unresolved creaking noises since 2019.
Melbourne Square, a 225m tower in Southbank, where creaking noises are now being reported.
Aurora, 270.5 m tower on La Trobe St, that’s also recently reported creaking noises
The reporting describes creaking noises at up to 60 decibels. And, 60 decibels is, according to Yale’s decibel level chart, nosier than a refrigerator noise. That’s not loud but I wouldn’t want that kind of noise coming from my highrise building.
These stories are concerning to me for a few reasons that are unrelated to the serious impact of these defects on strata owners and residents as they highlight serious as follows.
Firstly, it’s unclear and likely to be hotly debated, whether or not creaking noises in a high-rise building are general or major defects unless there is a serious structural implication [rather than the result of building movements that are within specification tolerances]. So, it may be that shorter time limits for general defects claims under applicable home building laws and warranty policies have already or are about to run out.
That highlights the problem of short [1, 2, and 3 years] time limits for strata building defects claims as many problems don’t manifest themselves or manifest themselves widely enough for a long time.
Secondly, these problems have not been resolved after a few years of being known about and advised to the builder and developer in relation to Australia 108 and Prima Pearl. That suggests that they are not easy to resolve [or they would have been] and/or that there’s no real interest in resolving them. That’s especially so since Multiplex is involved in the construction of all 4 towers and, so, will have collective knowledge and understanding of the issues.
That highlights that this problem may be systemic and related to an underlying and common issue/s and could exist in other high-rise strata buildings where the same issues exist.
Thirdly, these kinds of defects will be very hard for the strata buildings to investigate and also very hard to secure definitive technical advice about. The size of these buildings, the complexity of the construction techniques and building elements, the need to access detailed construction and structural information that is not available to the strata building, and, the time and cost involved mean that strata buildings advisors will struggle to provide clear, definitive, reliable and defensible advice.
That means the strata building will not have the information and advice it needs to make good decisions. Plus, it means that it will be easier for Multiplex and others to be dismissive and/or contradict these strata buildings’ positions on the defects and solutions.
Fourthly, Since it is likely that a large proportion of the apartments in these strata buildings are tenanted [the national average is 50% and these are inner-city high-rises so likely to be even higher], they could easily become unpopular with tenants and those unhappy tenants canceling leases. That will have an impact on landlord strata owners’ income and eventually, their capital values.
That highlights the investment risk to strata owners and their mortgagees in the largest and most complex buildings.
It also reminds me that the impact of strata building defects extend way beyond the actual fault/s and the direct rectification works and have many more amenity and consequent financial impacts on strata owners and residents.
Fifthly, any legal action by the strata buildings will need a three-quarter approval vote of all owners as this is required in Victoria [see my article ‘Why are Strata Buildings' Legal Rights Being Restricted?’] under section 18 of the Owners Corporations Act 2006. That’s going to be difficult [if not impossible] in these buildings given this size and because there’ll be a number of unsold lots still in the developer’s control.
That demonstrates that these kinds of restrictions in legal action do not protect strata owners, but rather prejudice them.
Plus, the cynic in me thinks that a builder who knows that a large high-rise strata building cannot pass a three-quarter majority to sue them for major building defects, might not try too hard to fix those defects m and avoid that legal action.
So, this news is another illustration of the decades-long saga that’s been progressively developing to eliminate strata owners’ rights to get properly constructed apartments.
If you want to relive that saga from a New South Wales perspective, or just learn a bit more about it, read my article ‘The Saga of NSW Strata Defect Claims’.
14 June, 2021
Francesco …