A Building Defect Doesn’t Stay a Building Problem

The building is where the problem starts

NSW building-defect stories prompt a question that matters well beyond any one development: what else happens to a strata community when a serious physical problem is discovered?

The first conversation may concern a leaking façade, failed waterproofing or a structural concern. Soon, the questions can become much wider. How will the work be funded? What does the insurer need? Can an owner still refinance? Who is deciding the next step? And what can residents safely rely on?

The STRATA IQ framework looks across six connected areas. It helps the Owners Corporation see the whole situation while the right specialists investigate the building.

PROPERTY — understand the defect and its reach

The physical problem still comes first: immediate safety, the failed component, the cause, the extent and the repair scope. A visible stain or crack may be a symptom rather than a complete diagnosis. Appropriate technical investigation helps establish what needs to happen and how the result will be checked.

Defects can also affect how people use their homes and common areas, and how buyers or valuers view the property. The effect on value depends on the circumstances; it should not be guessed. Control immediate risks, preserve evidence where practicable and distinguish temporary protection from a lasting repair.

MONEY — look beyond the quotation

The repair price may be only one part of the cost. Investigation, design, supervision, access arrangements and further testing may also need funding. Uncertainty about scope and timing can create cash-flow pressure before the work begins.

Special levies or borrowing may need consideration, with appropriate advice and approval. Compare payment timing, interest and the longer-term effect on the scheme’s finances. A possible recovery from another party should not be treated as money already available. Owners also need enough notice and clear information to understand what a funding proposal could mean for their household.

INSURANCE — establish the actual position

Serious unresolved defects can complicate claims and renewal discussions. Depending on the building, policy and insurer’s assessment, there may be higher premiums, increased excesses, exclusions or difficulty obtaining suitable cover. These are possible consequences, not automatic outcomes for every scheme.

Ask the broker or insurer what information and notifications are required, and keep a written record of the response. Do not assume that cover for resulting damage also pays to correct the underlying defect. Provide accurate information, identify what remains under investigation and seek appropriate insurance advice before making promises about cover.

INFORMATION — make the record dependable

Engineering reports, defect registers, notices, photographs, meeting decisions and correspondence should tell one understandable story. Which findings are confirmed? Which questions remain open? Which report is current? What changed after the last inspection?

Keep a dated chronology and a controlled record of advice, instructions and completion evidence. Records may be needed by advisers, insurers and people involved in a sale or refinance. Obtain advice about applicable disclosure and access requirements, and handle personal information and legally privileged material appropriately. An accurate record protects decisions; a reassuring summary cannot replace it.

GOVERNANCE — turn advice into accountable action

A committee does not have to become an engineering practice. It does need a clear process for obtaining advice, identifying the proper decision-maker, arranging funding and monitoring what happens next.

The strata manager can coordinate the process within their authority, while qualified advisers address technical, legal and insurance questions. Record decisions, reasons, responsibilities, deadlines and the evidence required to verify the work. Seek advice early on rights and time limits. A quotation, a contractor’s attendance or a promise to return is not, by itself, proof that a defect is resolved.

PEOPLE — recognise what is at stake behind each door

One owner may be preparing to sell. Another may be refinancing, retiring or planning to move. Someone else may be working out how to pay a special levy. A resident may simply want to know whether their home is safe tonight.

The same defect can affect people very differently. Clear communication should explain what is known, what remains uncertain, what is being done, why it matters and when the next update will arrive. Use plain English, explain technical terms and provide a reliable contact point. Do not give safety assurances beyond the professional evidence available. People deserve clarity even when the final answer is not yet known.

More than obtaining a repair quotation

Good defect management connects the building response with the wider responsibilities of the Owners Corporation. Keep these seven essentials visible throughout the matter:

• Accurate information: separate confirmed facts from assumptions and unanswered questions.
• Reliable records: retain reports, notices, decisions and a clear chronology.
• Appropriate professional advice: engage the expertise the issue requires.
• Clear decision-making: identify authority, options, reasons and the agreed next step.
• Financial planning: consider the full cost, payment timing, funding and uncertainty.
• Ongoing monitoring: assign responsibility, review dates and evidence of completion.
• Useful communication: help owners understand what is happening and why.