The Strata Schemes Management Amendment (Building Defects Scheme) Bill 2018 makes a number of changes to the building defects scheme, which requires developers of buildings of four storeys or more to lodge a bond equal to 2 per cent of the contract price for building work for a period of up to two years. The bill increases the maximum penalty for developers of a strata scheme who fail to provide a bond, extends the period within which a building bond can be claimed, and clarifies the role of building inspectors and arrangements pertaining to the liability of inspectors and professionals for acts or omissions done "in good faith". I will speak specifically on three issues pertaining to the bill. The first is the need to strengthen protections for home owners against faulty and dangerous building practices, the second is the need for clear accountability in the building defect scheme and the third is the community's strong desire for development that has architectural merit, is sympathetic to local character and is of the highest quality building standards.
Housing affordability remains one of the critical challenges of our time, particularly in Sydney and the inner west. It cuts right across the community and includes those facing homelessness, those looking for stronger regulations and standards in boarding houses, those renters who are struggling to keep up with rent and seeking a fair go, and those first home buyers who are spending weekend after weekend at auctions and house inspections desperately seeking to crack into a market that is stacked against them. Home owners who do run the gauntlet and are lucky enough to crack into the market by buying a new apartment too often discover that the great Australian dream has become a nightmare when they are faced with mounting costs and liability for faulty work.
In 2012 the University of New South Wales City Futures Research Centre reported that 72 per cent of apartment blocks in New South Wales had defects, as did a staggering 85 per cent of new apartments built since 2000. That will not come as a surprise for many inner west residents, because they can see the rapid deterioration of buildings merely months after they go up. The telltale water staining, cracking and chipping paint are just the tip of the iceberg. Often they point to much more significant structural issues. The Australian Institute of Architects has revealed that up to 9 per cent of buildings inspected between 2010 and 2015 had major water defects costing more than $10,000 and 34 per cent had minor water defects. The cost of building materials has forced builders to look for cheaper materials that degrade more quickly. The regulatory framework for developers has shifted, allowing more and more inexperienced developers to enter the market.
As many inner west constituents will attest, the cosy relationships between developers and private building certifiers muddy the waters further. It makes it unclear as to where the responsibility for poor work lies. I applaud organisations such as CHOICE that have been advocating for greater transparency and accountability within this industry for years. Its research shows that the most common defects reported by new owners are internal water leaks at 42 per cent, cracking at 42 per cent, water penetrating from the outside of the building at 40 per cent, guttering faults at 25 per cent, defective roof coverings at 23 per cent, and defective plumbing at 22 per cent. The list goes on. It is disgraceful that owners would be forced to pay for poor workmanship because dodgy builders and developers cut corners.
The building defects scheme provides some assurance to buyers that they will not be on the hook for any immediate problems that arise in their new apartment. But, of course, many of the more significant and indeed costly defects may take years to appear. The aim of the bill is clearly to increase accountability in the scheme. We welcome that, particularly in relation to the inspection that underpins protection for owners. While I applaud and support that objective, I share the concerns of many of my colleagues that the member for Swansea and the member for Sydney raised that the bill does not go far enough in clarifying the role and liability of building inspectors, and fails to adequately ensure greater transparency, consistency and security for strata owners.
New section 198A will require the developer to provide a building inspector to identify any defects in an interim and final inspection report. Inspectors can be drawn from a large array of industry groups and the bill does not prescribe the scope of the inspection in any great detail. Alarmingly, a number of industry groups from which the inspectors can be drawn have already signalled that they will not be participating in the scheme. Stakeholders have also raised concerns about the necessary qualifications and independence of the inspectors—which seems to belie the objectives of the bill. Stakeholders have been clear that oversight of inspector panels would be better in the hands of government.
It is clear that we must go further to protect the interests of home owners who are bearing the brunt of developer greed. Under this Government, inner west suburbs have been a paradise for developers. Even discounting the now shelved Sydenham to Bankstown Urban Renewal Strategy, the inner west is staring down the barrel of having nearly 6,000 extra dwellings under the Greater Sydney Commission housing targets. That speaks to the enormity of the challenge facing our community in relation to not only density but also the standards of architecture and construction that we will accept as a community. While I join with my colleagues in supporting the bill, I urge the Government to work with the Opposition to improve the provisions pertaining to building inspectors, and the accountability of dodgy developers and builders. All home owners deserve the highest standards of transparency, consistency and security.