The New South Wales government is planning to introduce a new ratings system for builders and developers in an attempt to protect consumers from buying dodgy apartments.
The tool will create a risk profile for every planned project based on the track records of the builders, designers, developers and certifiers involved in the development.
And the legal reforms accompanying it will give the government stronger powers to stop occupancy certificates being issued on dodgy buildings.
NSW Building Commissioner David Chandler is leading the charge, but other states might follow.
Appointed to drive “critical reforms” in August 2019 after a series of high-profile evacuations and defect scares, Mr Chandler is developing the tool in partnership with consumer credit agency Equifax.
The system is one of six reform pillars in the government’s Design and Building Practitioners Bill, which the NSW Upper House will resume debating in the last week of February.
If parliament passes the bill, Equifax will rate building professionals by trawling through publicly available records of company finances, building failures, insurance claims and defects.
The system’s initial purpose would be to help regulators identify high-risk projects which require close monitoring.
But the long-term plan is to develop the tool into a ratings website that helps prospective buyers avoid shonky operators.
Mr Chandler told the Australian Financial Review he hoped to have the system up and running by the middle of the year.
The scheme would mark a national first for the building and construction industry. But Queensland Minister for Housing and Public Works, Mick de Brenni, told The New Daily the Palaszczuk Government could implement something similar in 2021.
“The Palaszczuk Government has already engaged in some targeted industry consultation on this proposal and agreed to consider a similar approach as one of the next steps in the implementation of the Queensland Building Plan,” he said.
“A rating tool to reward high quality builders will be considered as part of a wider review of Queensland’s Home Warranty Scheme, as will coverage of multi rise residential buildings.”
Among other things, Mr de Brenni said, the QLD government is considering lowering the home warranty scheme fee for builders with a strong track record of delivering better quality buildings.
Karen Stiles, chief executive of the Owners Corporation Network (OCN), described Mr Chandler’s ratings system as an “exciting” development.
“It will assist prospective purchasers to make better purchasing decisions. And it’s certainly going to help the regulator identify risky projects early on,” Ms Stiles told The New Daily.
“Because the problem we’ve had for so many years is that everybody’s tried to mop up the problems at the end, instead of preventing them in the first place.”
The proposed ratings system comes after several scandals catapulted shoddy workmanship within the construction industry to the fore of public debate last year.
In July, residents of Melbourne’s Australia 108 building reported significant movement and large cracking sounds in what is set to become Australia’s second-tallest building.
Weeks prior to that, hundreds of people were evacuated and left homeless after cracks appeared in the facade of the Mascot Towers, also in Sydney. The repair bill is expected to be more than $20 million.
And then, in October, The New Daily revealed the company that built Sydney’s troubled Opal Tower was responsible for building “structurally defective” balconies at a different city apartment block.
“The regulators are going to have to regulate, because they’ve been asleep at the wheel for far too long,” Ms Stiles said.
“There’s been a mantra of cutting red tape and not interfering with a [major driver of economic growth]. Well, not interfering has got us to where we are now. So that’s got to change.”
Not everyone’s convinced that Mr Chandler’s proposal is the best way forward, though.
Shane Geha, managing director of EG Urban Planning, told The New Daily the ratings system would make it harder for new players to enter the market.
And he said builders and developers would pass on the increased compliance costs to consumers.
“We want the building industry to remain relatively innovative, free, nimble, but at the same time give the consumer a level of confidence which to date they don’t have. That’s kind of the challenge,” Dr Geha said.
“And there’s a lot of complexity with it, because if it was simple, it would have been done already.”