Petition Demanding Royal Commission into Building Industry

Hi Everyone,

TLDR: Please sign the petition to help prevent the Mascot Towers disaster from happening to anyone else!

Petition Building Industry Royal Commission

Thank you to everyone in advance.

Long Version:

Long time guest newly joined to request support from the OzBargain community. I visit OzBargain everyday and thank everyone for their kind contribution.

I am an owner occupier of a unit in Mascot Towers. Just a regular OzBargainer that makes very careful decisions with purchases.

We are looking for your support in signing a petition to help prevent the issues we faced reoccurring to anyone else.

Unfortunately the issues do not stop at Mascot Towers. It can happen to anyone and there are likely many of you also facing similar major issues but unable to speak out due to "legal reasons".

The government must take action to bring back confidence!

Extract from Petition (created by one of my fellow owners):

We are owners of a unit in the strata apartment Mascot Towers, Sydney which we mortgaged in 2009. After hearing previously on the news about Opal Towers we thought it would not happen to us, yet here we are! Believe me the building industry problems coming to the surface are just the tip of the iceberg as evident in news of the apartments in Zetland, Erskineville, Alexandria and so on.

Confidence needs to be restored in the home building industry so that all can have long-term security and benefits. Therefore, it has become clear that State and Federal governments need to drastically review and overhaul the way buildings we call our homes are designed, approved, built, certified for occupation, insured, financed, and managed in Australia.

It is criminal that Corporations Law allows limited liability companies to be used by unscrupulous players at all levels of the building industry to profit from the misfortune of others, that is the home owner. Conflicts of interest are rife in the industry at all levels including the support structures that are supposed to help the end user, us the home buyer and owner.

It affects everyday Australians whether you are an individual home owner that has had a house built off-the-plan or a strata unit owner who either bought off-the-plan or bought into an existing strata building. Pouring your life savings into your home is considered a fulfilment of the 'Australian Dream' and yet the business structures and processes around one of our single most expensive purchases and assets is riddled with a cancer that needs to be excised sooner rather than later.

Please sign the petition and distribute it widely so that we can pressure our Governments to take action and save the future for our children and not just for those greedy banks, developers, builders, sub-contractors, insurance companies, and strata and building management companies where self-interest permeates at every level.

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Comments

  • I understand you need a builder license to build a house but not to build apartment buildings. So if I have money I just hire a bunch of contractors to build an apartment building for me, am I correct?

    • Incorrect. You need a commercial building licence.
      A house builder requires domestic bulding licence.

      • Thank you, do you know if we are less protected under commercial builder licence?

        • Who is we? Builder or buyer?

          Regardless there is no less or more protection.

        • +2

          The licence doesn't matter, but bigger developments (>3 storeys from memory) are exempt from having to take out Home Building Warranty Insurance, which smaller builds are required to do.

  • Royal Commission into Building Industry

    Who is going to pay for this? Taxpayers?

    • +3

      tax payers are the one who pay.
      banking one is estimated to cost $75m

      • Man, we could have bought a really big stick for $20 and had an unpaid intern shake it at the banks for free.

    • We will all pay ….one way or another.

      • Less is better. So no commission.

        • hi whooah1979,
          I respect your concerns regarding payment. It appears a lot to pay in the short term however the impact will be noticed in the long term. Relative to the impacted industry (think ALL buildings in Australia), the cost is minuscule. I don't know if you are a property owner or not but I sincerely pray this doesn't happen to anyone else due to lack of action, whether it is in one years time or five. I am sure most people would want some sort of comfort in knowing that the home they are living in or have purchased (new or used), has been built or will be built to a high standard and will remain habitable for their lifetime.

          • @mascottowers: It needs to be built to standards. High standard is not measurable and is only an opinion.
            High standard is subjective and drives up construction cost.
            That's why there are building standards in place (which are written by engineers and bodies) that should be followed and inspected against. But the issue is inspections are not adequate and that's where most of the problems arise.

            It's unfortunate you are in this circumstance. However an apartment shares a building structure and common property. To even get to your front door you are walking through common property.
            That is already a risk in itself without even talking about building defects.
            Let's say for example someone drives into the lift doors in the basement carpark and causes this lift to shutdown for 3 months.
            You have no lift and have to walk the stairs. Are you going to sue someone? The body corp?
            The driver?
            Driver is protected through insurance.
            What else can you do? Ask the government? You are pretty much stuffed.

            Apartments are shared property that brings many risks
            I would not allow kids to buy an apartment. That would be my peace of mind irrespective if there is a royal commission or not.

            • @yellowfever:

              However an apartment shares a building structure and common property.

              Whether there is common property or the building itself is wholly owned by one individual, there is not an excuse for defects in the building. If you standard buyer can't recognise these defects, then legislation and inspections should be sufficient so as to protect the public interest — that is quite literally what they are for. I am not sure why the rant on apartments is even particularly relevant to OP's issue.

              High standard is subjective and drives up construction cost.

              Of course, but for the purpose of getting rid of this hand-waiving, let's assume that when OP says high standards, he means: that the owners would not be faced with a million dollar repair bill for their homes, 10 years in. If it were a high priced oven, there'd be people in here banging on about the ACCC — it is a perfectly reasonable expectation that an apartment should not be (for lack of a better word) life threateningly delinquent within a decade — arguably it should outlive us.

            • +1

              @yellowfever: "I would not allow kids to buy an apartment"
              Good for you. That's a luxury few can afford. Most "kids" are struggling to get into the property market at all, let alone buy a house over an apartment. Most "kids" don't have parents rich enough to help them with a deposit or willing to risk their family home by being guarantor, either.

    • +1

      Put your family's life in one side and those millions on other and try to figure out what is more important.
      The system is for the people not the the other other way around.

      • +2

        Millions of Australians are affected by many things that are important. There isn’t enough public funds to start an RC for each and everyone of them.

        • +1

          A home is the most expensive thing someone will buy.

          • +2

            @poboy: An expensive asset don’t mean that it deserves an RC.

        • Dude, are you serious? We're not talking about Australians being affected. We're talking about honest, hard working people having their entire financial position ruined and their life put in direct danger bbecause of the negligence and intentional deception of massive corporations. If that doesn't deserve a RC then what does?

          We just had an RC on the insurance and banking sector, and working in it I can tell you it was mostly bullshit. Simply a response to Australians not reading PDS documents to realize what they paid for has clear limitations and exemptions like any product.

          Sheesh, in this day and age the country goes on about how hard it must be to be a woman or gay or transgender because of unique challenges. Being scammed out of your life savings? No big deal.

          • +1

            @SlavOz: It is estimated that traffic congestion costs the economy >$16b. That number may double in ten years time. Spending $75m on an RC into congestion may benefit more people.

      • +1

        The system is for the people

        Who do you think "taxpayers" are? Nothing is free. I swear, "Royal Commission" has become some kind of talisman people think will solve everything.

  • Are you asking if the government who

    1. had deregulated the industry towards self-regulation (Labor or Liberal? Take your pick.)

    2. got plenty of developer donations and well-known for this

    Will find out the cause of the issue?

    As a police officer said, "I'll take your complaint against me and will let you know what the outcome is. Please start with your name and address." It's almost as bad as CCP's corruption.

    Edit: My advice, put a minor party for first preference.

    • hi orangetrain,
      Thank you for the response. I know it seems like a lost cause to rely on the government to fix an internally driven issue. It should be in the governments best interest to make sure this doesn't get out of hand as it has potential to significantly impact a large source of their revenue. Your recommendation is very interesting, we will take that on board, thank you.

  • I think we really need Royal Commission into Building Industry.

    If you set aside the Mascot issue, take a look at how builders are collapsing leaving people lost their deposit, or how builders across the board putting terms in their building contract that left customers no choice but to abide them despite it is detrimental to them.

    I mean if any Ozbs any experience with either Metricon / Porter Davis and the likes, do you think they did a good job and been helpful? Many verified purchasers in Productreview.com would disagree they have been contractually fair.

    I give you one example. Apparently it is in a building code that interior paint shade inconsistencies can only be recognized as defect if it is visible from certain distance (I can't recall how far but it's ridiculously far). As a result, you have to live with uneven white paint shade in my living room (not too obvious but it's there).

    Another one, there is obviously a patched hole that slightly bulging out (maybe 2mm) and obvious, this builder said it's permissible under the code.

    They put terms that say they pay compensation, but reneging it when the building took longer due to "weather" when it's actually due to attending significant amount of reported defects. A bit like how airlines like to cancel your domestic flight and put you on 1-2 hours and blame 'weather' when the real reason is the flight you are on are not 100% capacity.

    • +1

      take a look at how builders are collapsing leaving people lost their deposit

      Other than Ralan's obvious dodginess, this had two other factors:

      1. Lawyers not telling their clients that releasing the deposits would be an absolutely bone-headed idea; and
      2. Those buyers being greedy and taking the risk in return for (apparently) 15% per annum returns.

      Old saying about how you can't cheat an honest man comes to mind.

      • hi HighAndDry,
        Thank you for the response. The "obvious dodginess" is exactly the reason we need things to change.

        It is not easy for a regular buyer to find out if the developer is dodgy or not as their issues may not surface until years after the properties have been constructed. At which stage the developer/builder may have already liquidated.

        If you have any suggestions for people to find out the reliability of a developer/builder please post this for everyone's guidance. It would be much appreciated.

        You are correct in saying the issues extend to the legal advice in the industry.

        Regarding your comment about the buyers being greedy. Not sure about the Ralan case but not all buyers are investors. People need a home to live in. Apartments are much cheaper than houses and are typically in convenient locations with public transport.

        • +1

          It is not easy for a regular buyer to find out if the developer is dodgy or not as their issues may not surface until years after the properties have been constructed. At which stage the developer/builder may have already liquidated.

          Yup. This is a huge problem but we already know the solution - the government/industry just doesn't want to implement them. Basically: No more private certifier system, no more having developers paying (directly) for buildings to be signed off and approved.

          If you have any suggestions for people to find out the reliability of a developer/builder please post this for everyone's guidance. It would be much appreciated.

          Honestly? Be willing to pay more to buy from a premium developer that has a long history and a reputation they care about. Crown, Mirvac, Payce, etc. Not only do they have quality control processes which are over and above the minimum required by government, they also have plenty of working capital to rectify defects if they arise, and a reputation which they have developed over a long period that they want to protect.

          Not sure about the Ralan case but not all buyers are investors

          Was only talking about the Ralan case and purchasers releasing their deposits to the developer, on promises of getting 15% per annum returns. Whether they're an investor or not is irrelevant in this context.

    • hi burningrage,
      Thank you for the response and the provided examples. As pointed out, there is a severe lack of quality control during construction and no one takes responsibility for it. We as home owners hope these quality control issues are only isolated to the finishes of the building (painting, flooring etc) and not the buildings structural components however it is becoming evident that this is not the case.

    • The guides to tolerances and standards are issued by the states, not the builders. The local states have authorities who's responsibility/purpose it is to check whether homes constructed are within these tolerances (where there is a dispute between the home owner and the builder). Everything you have ever purchased has a permissible degree of error (due to human involvement). Have a look at a television warranty and see how many dead pixels before its considered a defect.

      As the recipient of the contract it is your sole responsibility to assess it, take legal advise should you choose and then sign it (they are also required to have a 5 day cooling off period in most states if you change your mind). Once again I can't see how you as a consumer agreeing to terms and conditions with due consideration (that they decide thereafter they don't like) is anyone's fault but their own.

      • Totally disagree.

        It is precisely that guide to tolerances and standards as you call them were resulting in erosion of trust between builders and purchasers.

        It is that guide that started the cladding incident which obviously were acceptable until it didn't. Those standards and tolerances were built by the builders, for the builders, and to the builders. If they were not, then we (and OP) would not be having this conversation / petition.

        For far too long, those standards and tolerance were tilted in builders' favour and it is high and time, they must be exposed. Have a look at those verified purchasers in productreview.com.au to see them.

        But let's set that aside and talk about the practicality.

        It is simply not practical when you have Construction Loan and Home Loan/Rent Expenses hanging on your neck that you would continue to disagree on defects. Every time a defect is reported, the builder (at least in my experience) add those days to the promised handover date and that is how they have been welching on paying penalty, that the defects were initiated by the purchaser.

        From past experience, I have come back to the builders numerous times. They always said "these paint defects were standards" or "those uneven wall surface were standards" or "hair line cracks were standards - at delivery" PLUS they also said if you sign now, then there is warranty and if it gets worse, we will repair it.

        What these builders fail to understand is that purchasers are buying a HOME. Certainly, I was not being unreasonable if there is a small uneven paint on cornices or architraves (they're not that visible) but when you have buldging uneven wall, that is a noticeable problem.

        I tell you one more thing they didn't tell me until I discovered it almost 5 years later. That they deliberately inserted water limiter and gas limiter and under-rated heat exchanger (inappropriate for the size of the house resulting ducted heating would never warm the house enough) in order to get the 5 star rating. The water limiter effectively means if there are 2 people showering, the second one would fall into drips level. The gas limiter means the gas took 1 hour pilot trigger before the gas flows and the inappropriate heat exchanger means the house would never be warm enough to cover the house.

        All of these were discover 5 years later and all rectified under warranty and all the tradies said "Is your home built by xyz builder?". I said "Yes". He shook his head and said, "Yep, they do this all the time and you are not the only one".

        I say Royal Commission to the Building Industry now!!!!

        • I suspect we won't see eye to eye. You have elected to build with someone before doing your due diligence likely based solely upon price. I work for a new home building company and we pride ourselves on quality, I even built with them myself so I can't say I have seen that side of the industry.
          The guides are definitely written by the states and managed by the states, not builders (excluding the HIA version which is written by the HIA).

          • @Dundundunnnn: The builder I had was one of the big builders (like the PDs, Metricons, Simonds of the world).

            If you are not one of the big builders, then perhaps you are doing the business differently and I could look at your business the next time I want to build a new home.

            But the point remains. You can do due diligence but how can you do due diligence on workmanship? Builders choose their own subcontractors with various quality. And then you have to define what is "quality".

            Is a 2mm buldging wall considered "quality"? It is "standard" according to the builder.

            Are multiple hairline cracks at settlement considered "quality"? It is "standard" according to the builder - within "tolerance" width they said.

            Is having varying shade of white on roof not visible within 1-2m but visible from 3m to 5m "quality"? It is "standard" according to the builder.

            I'll add one more. Creaking stairwell to the upper floor. When you walk and step up, the floor creaks on one step but none on the others. They said it's "standard" as long as structurally sound.

            If only consumers are involved in building codes/standards, then maybe we would have less of this problem but as we all know, building codes/standards are built by the builders, for builders, and to the builders.

            It really is a mess.

  • +1

    It's an absolutely mess in Victoria as well. 500+ buildings with flammable cladding alone. Changes to the laws allowed building companies to hire their own building surveyors as staff to tick off all requirements. The building surveyors were purposely yes men/women who never questioned anything nor raised issues.

    Absolute mess.

    • +1

      hi zeggie,
      Thank you for the response. Yes these issues are Australia wide, not isolated to a single state. It is overwhelming how many issues are surfacing within the building industry over the past 8 months alone since Opal Towers etc.

      • +1

        Oh I didn't actually state the obvious in my post. Yes, completely agree and support a Royal Commission. Major reforms are needed even if it unwinds the last 20 years of policy introduced.

  • It is criminal that Corporations Law allows limited liability companies to be used by unscrupulous players at all levels of the building industry to profit from the misfortune of others

    What structure should be used instead?

    • hi ihbh,
      Thank you for the response. Great question, unfortunately I do not have the answer.

      • +1

        So do you or the other people understand what that line means or was it just included it for emotive impact?

        • +1

          I think OP is more referring to the fact that nobody is liable when a situation like this pops up. At least in VIC (and I believe NSW as well) major builders are exempt from needing building warranty insurance for large developments.

          Thus apartment owners are up the creek if something serious crops up. No insurance. Builder just winds up whatever Pty Ltd they used to build the job. Apartment owners foot the bill collectively.

          • @Typical16-bitEnjoyer: The issue is how long the warranty is reasonable. Attacking structure of the business shows how simplistic they are and won't garner much sympathy.

            • +1

              @ihbh: Length? They are exempt. No warranty. Length doesn't even come into it.

              Attacking the structure of builders is fair game. They purposely set up separate liability limited entities for each project to prevent them ever being sued, as those entities likely have no assets, or they simply phoenix if they do.

              • @Typical16-bitEnjoyer: Houses, buildings suffer wear and tear over time. In your world no one would build them or it would cost a fortune and people would live in caves.

                • @ihbh:

                  live in caves.

                  Bit dramatic lol. A house is covered. No problem. We're talking apartment buildings.

                  Major developments had mandatory warranty in Victoria until the requirement was removed around 2001.

                  Not long after building surveying requirements changed allowing major development builders to sign off on their own work.

                  Now we have a situation where 500+ buildings requirement very, very expensive work and the builder isn't liable.

                  Similar situation in NSW. A 3 story building has mandatory warranty. A 4 story building does not.

                  Explain that.

                  • @Typical16-bitEnjoyer: Hence I said the issue is length of warranty required for respective building. Possibly requiring independent party to cover or back - e.g. by paying insurance premium.

                    • +1

                      @ihbh: I have no idea what you're on about.

                      The issue is there is NO warranty available anymore for these apartment owners or any soon to be apartment owners. What does length have to do with it?

                      • @Typical16-bitEnjoyer: The requirement to have x years warranty for various buildings … perhaps going forward.

                        Hard for it to be retrospective because the price of the apartments would have been higher. That is, the builders hadn't priced it into what they sold it for.

  • Isn't it common sense to buy a old building ( builders either skimp , cut corners or use sheet materials nowadays ) on land somewhere rather than Lego houses with no land ?

    How many problems besides land shortages if simply follow the above :)

    • hi profar,
      Thank you for the response. With all the recent events it is becoming obvious that the public has lost confidence in buildings constructed in the last few decades. This is a major problem for anyone buying or living in property in the foreseeable future as the reliable old buildings will diminish and be replaced with new.

  • It's one thing to Have a royal commission, it's another if the royal commission actually results in an improvement in building standards and better protection for apartment owners.

    Take the recent financial royal commission, lots of headlines and noise. Yes banks are making some reparations. But has there been any structural changes in the financial system. Has anyone gone to jails? Has the goverment adopted all the recommendations? It was just a political and PR circus that made some noise. But ultimately, it's business as usual. Oh the lawyers cleaned up nicely

    As long as directors are never held to account, as long as builders can easily Phoenix their companies, nothing is ever going to change.

    • Tbf many executives lost jobs and had their reputations rightly tarnished over the Royal commission. One of the big banks had their CEO exposed in wrongdoing so he had to quit.

      There have been some pretty drastic changes as a result. In some cases if someone wants to buy an insurance policy, the provider isn't allowed to take their money. They need to literally hang up the phone and wait 48 hours until they can complete the sale - this was mostly a response to many people being sold loans or insurance policies which weren't right for them. The new procedures are overkill but it's pretty hard to say the RC does nothing.

  • +2

    I think the industry does need a shakeup on many levels. The current volume builder market is a race to the bottom, subbies are screwed so tight on prices they just want to get in and out as quick as possible, as a result no trade has any consideration for the other trades that come in after. I think buyers would be shocked to find out just how little time a registered builder spent on site. Most home owners don't know or care what's actually behind the fit out, they wouldn't know or care about the stud centers of their frames, the thickness of walls etc, it's all about that caesarstone bench top, how big the walk in shower is etc. And I guess that's fair enough, they shouldn't have to concern themselves with the structural side of things but imo there is quite the difference between the minimum standard and what many in the industry would consider an acceptable standard. I don't believe many of the larger volume builders would build their own home to the structural standard they specify for their clients.

    On the commercial side of things (and a lesser extent residential) I'm finding that lazy engineers and architects that have copy and paste specifications, things that are completely inapplicable to the job at hand contribute to the issue of non-compliance. When you have to weed through 100s of pages of specifications of generic details to find specifications that are relevant to the job at hand it just creates too much confusion about design intentions. Specifications should be as informative and concise but instead I constantly see they are just generic to cover the backside of who ever wrote them. I remember one of the first commercial jobs I did had a specification that all prefabricated shop drawings needed to be sent to the project engineer to sign off on before manufacturer, so I did this and received a call from the engineer shortly after who stated that it's just a generic note and no one ever sends them through and not to worry about it.

    Then don't even get me started on imported building products like the flammable cladding, who benefited from that apart from the developer and the importer? It would have put people out of work in Australia who could produced the product and now tax payers are footing the bill to replace.

    • Agree all parties involved to blame. It's one thing to buy a cheap arse apartment and another to turn around and argue for an RC. Something about having a cake and eating it too.

      Perhaps minimum standards are required (how this is implemented is another issue) and that this is priced appropriately for.

      • So if I buy a cheap toaster, does that mean I'm at fault if it can't even toast bread and repeatedly sets my house on fire? No, not according to Aus consumer law. If you are sold a product which is not fit for use due to negligence on the provider, you are being scammed. It's as simple as that.

        • +1

          New residential properties built in NSW are cover by a 2 and 6 year warranty.

          • @whooah1979: So how does that tie into apartment owners being screwed when their building is found to be uninhabitable? From what I understand they're not getting their money back for being sold a dodgy property - ala Mascot Towers or Opal Tower.

            • @SlavOz: A toaster is a bit different from a property because of the different levels of complexity and standardisation.

              In my suburb, the cost of some house builds are $1+m, whereas the cost of a project home might be $2-300k. Sure the project home might be smaller and the finishes not as good, but structurally like for like, which would you expect to last longer?

              fit for use

              Depends how long you define fit for use is - 10 years, 100 years, etc. for a property. If standards say 100 years, I suspect, costs will rise significantly to accommodate that standard.

              • @ihbh: The issue isn't that apartments aren't lasting as long as superior properties. It's that they're not even lasting long enough for the tenants to get their furniture through the door.

                If you spend $500k on an apartment, with the builder assuring you that the property is safe and functional, you cannot be expected to move out within a year or so when the building starts to crack. You were lied to buy the builder who knowingly cut corners.

                The government sets warranty periods on numerous types of consumer goods to ensure buyers are protected in the cause of fault. I'm yet to hear a compelling reason why the same standards aren't enforced in the building industry.

                "Depends how long you define fit for use is - 10 years, 100 years, etc. for a property."

                Wouldn't that be the entire purpose of an RC? To sit down and determine things like this. I don't know the answer, but surely a room full of lawyers and experts could come up with one. And it would surely be higher than the amount of time most apartments have lasted.

                • +1

                  @SlavOz:

                  And it would surely be higher than the amount of time most apartments have lasted.

                  And the obvious implication, prices will be much higher than current levels.

                  There might be other implications, such as big holes in the ground because different soil types are too risky to build on to guarantee set levels if they are unreasonable and across the board.

                  • @ihbh: I don't necessarily agree that prices will get a massive increase. $550k is more than enough to cover the costs + profit of building a reliable and functional shoebox in the sky. Apartments are already massively overpriced. It's inevitable that builders will need to take a cut in their revenue and sell for reasonable prices if they want to compete. Almost every industry has government standards on warranty and the manufacturers are still finding ways to make money while staying competitively priced.

                    I'm curious - do you have a better solution to this problem? What would be the best way to ensure people stop getting scammed out of their life savings for the pleasure of living in an unsafe building that could potentially kill them?

                    • @SlavOz:

                      $550k is more than enough to cover the costs + profit of building a reliable and functional shoebox in the sky

                      Good to get your input as a developer, else it means nothing.

                      A lot of the cost is the land value. And building costs are substantial the higer you go up. The more onerous building requirements, the greater the cost. Obviously a balance will need to be struck - e.g. by market forces.

                      It's inevitable that builders will need to take a cut in their revenue and sell for reasonable prices

                      Builders will be driven by market forces. No one is going to make a loss for you, or not be appropriately rewarded for taking risk.

                      better solution

                      Could be some guidelines introduced like minimum warranty period, independence, etc., but market forces already starting to take effect. Much harder now for developers to sell crap and get sign off without a track record and previously clueless buyers looking for the cheapest deal now more savvy. The ones that bought in the recent boom could incur additional costs, lower selling prices.

  • +1

    Thank you to everyone that has commented and provided support.

    We have now reached almost 8000 supporters!!

    Spread the word and make the government take action

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