There is a strong focus in Queensland on the issues that have lead to building structure breakdowns, mostly involving concrete cancer, where the reinforcing steel expands inside concrete due to water ingress and effectively bursts the concrete open.
From my experiences within the industry as a body corporate manager, search agent and licensed real estate agent, there are a range of people who bear responsibility for building maintenance neglect. I must point out that most of what I am about to say is known within the industry. Collectively it does show it is time for a cleansing within the sector.
Owners want low levies, that really is the bottom line on all this. Any building maintenance adds to their cost, and while an individual lot owner’s immediate structural problems can be addressed quite simply through standard repairs and maintenance the bigger picture that includes the cause is often considered too expensive for owners. Too often the next owner is lumped with the problem and so it continues.
Without serious cause committees will baulk at commissioning reports on structural integrity. Effectively, what from what they don’t know, they don’t need to spend their time and the body corporate’s money on. Also committees and owners are not happy seeing negative structural reports within their body corporate records where the faults have not been remedied. Remembering also that committees are made up of volunteer owners.
Real estate firms
There was previously a requirement in Queensland that any latent or patent issues be disclosed to a buyer of a body corporate lot. Many real estate agents wanted this section “clean” within their disclosure statement and if search agents provided reports with any issues, the real estate agents could simply commission another $150 report that gave a clean result, and move their business away from search agents who provided unclean reports. Search agents moved with the requirements or lost their business.
Conveyancing lawyers, as professionals, are probably the most culpable for building neglect. We have all heard of people buying a lot only to find that the building is in need of serious and very expensive remedial work and a special levy may be pending. Conveyancing lawyers must guide their clients to conduct prudent person due diligence inspections of body corporate records, preferably with an experienced body corporate manager. The conveyancing ticket-clickers have compounded building structure failures through accepting “clean” disclosure statements as the industry norm.
Had conveyancers stood their ground on this issue the obligation to deal with building structural failure would flow back through the chain to the owners and then the bodies corporate, or units would simply not be sellable.
I have tried in the past to raise these structural concerns through offering an article to a major newspaper (with a substantial real estate section) including the need for buyers to conduct their own due diligence, only to be told- “any item for the real estate section must be positive” [verbatim]. The article was refused for fear of rebuttal by real estate advertisers.
Legislators the solution
This issue we are seeing is not new. There has been a long-time need for legislation to require bodies corporate to have an engineers structural report completed within every five years for high-rises over ten years of age.
Conduct a search of body corporate records personally with an experienced body corporate manager to see if there is evidence that the building you are about to buy into is a potential financial millstone.
Errol Anderson is CEO of the Queensland Body Corporate Association and principal of Andersons Consultants – Gold Coast.