Legislation makes Queensland a real estate risk

July 30, 2016

The HQ apartments by JadeCorp - installed with free water features on external wall (when it rains)

 

On 12 May this year the Queensland Civil and Administrative Tribunal backed the decision of the Queensland Building and Construction Commission siding with developers Jadecorp in relation to their development of the HQ apartments in Chermside.

 

Essentially, this has confirmed the approach of 'Buyer Beware' in Queensland.  In this case, the developer, their builder and suppliers/subcontractors have provided a construction that is not fit-for-purpose, resulting in water leakages, with a repair bill into the tens of millions of dollars.  Because the building used inappropriate materials (not suited to the humidity levels in Australia), and that "it was unfair to expect the builder to remedy defects which arose from a product defect outside the builders control"

 

The details are reported in the Brisbane Times, and further the formal judgement was issued here.

 

This decision gives a green light for developers and builders to:

  1. Use low-cost products, without details on these products and without testing them

  2. To adjust the materials specified by engineers/architects to capture cost savings

  3. Take no responsibility for testing, QA and QS of incoming materials to ensure they are in good condition or suitable for the work

  4. Ignore customer complaints and take a legalistic approach to faulty buildings

  5. Enter into contracts with suppliers that have no warranties or performance guarantees, knowing that the cost of failures will fall to the buyer of the property

This is a terrible decision.  A developer and builder must be accountable to ensure that:

  • A competent professional is used to design/engineer the building

  • That specifications for materials are complied with, or where varied, that these are re-checked by professionals with appropriate qualifications

  • That suppliers are required to provide warranties for their services and products, that these services will meet the specifications and that any inherent defects in the materials.  Cost for rip-and-repair warranties can be carried by suppliers, or the builder at 'their choice' - considering the best means of controlling risk

  • That the developer, builder, suppliers, contractors have in place appropriate insurances (or self-insurance) to ensure that the buyer is protected in the event the building is not up to specified standards.

Clearly neither QBCC (the supposed regulator for building industry) nor QCAT believe that the customer has any rights here, and that the interests of a developer who is either unscrupulous or careless in their risk management needs to be protected and that buyers of real estate have to pick up the multi million dollar tab.

 

I'll be back in a couple of days with some suggestions on what a buyer of residential property in Queensland could do to protect themselves.  In the meantime, talk to a competent building inspector.  And don't just go for the cheapest options - get a thorough, detailed inspection.

 

 

 

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September 9, 2019

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