The strata industry has a habit of demanding new laws for every problem (without first thinking how behavioral change could address the issue) and then whining when news laws are passed. It happened again last week.
The Home Building Amendment Bill 2011 was quickly passed by both houses of the NSW parliament last week and awaits assent. The government spin would have us believe this was about stimulating investment and activity in home building. If this is the best the government has on that front, then we should all despair.
Strata owners complained that this was another case of pandering to the developers at the expense of the consumer. While generally I agree this is the inclination of state governments, on balance this is good legislation. Here is why:
- Abolishing proportionate liability for owners corporations will substantially reduce the cost and time line for owners chasing developers and builders (and insurers where that is relevant);
- Shorter timeframes for bringing claims on statutory warranties for non structural defects is consistent with the strict repair and maintenance obligations of the strata schemes management laws and will go some way to dealing with owners corporation inertia which is in the public interest;
- The time frame for bringing claims for structural defects workmanship issues remains 6 years but some clarity is given about how to determine when this time limit commences; and
- The other provisions are insignificant but hard to argue against.
The real issue in this area is the non-availability of home warranty insurance for buildings more than three floors not including car parks. These people are without protection from developers using special purpose vehicles for the development that are then wound up to defeat creditors including the tax office and defects claimants.
On this occasion we should stop whining, pay credit where credit is due and remain focused on the need for real legislative protection for investors in high-rise developments, almost all of which now have significant building and construction defects.