Queensland buildings more than they are cracked up to be

27 August 2019

Anyone who watched Four Corners on Monday, 19 August could be forgiven for thinking that the majority of Australian residential apartments constructed in recent years are riddled with defects, covered in combustible cladding and leaking like a sieve.

But what the Four Corners report also demonstrated is that this is far from the truth when it comes to Queensland.

We have the benefit, nationally, of one of the best Building Codes in the world. And unlike other states and territories, in Queensland we are fortunate to already have a comprehensive system of regulation for building work. Combine the two and it means that Queenslanders should be confident in the quality and safety of our buildings.

There are four prongs to Queensland’s regulatory system:

1. A licensing system that covers all building work – domestic and commercial; with 74 license categories that ensure builders and trade contractors have the rights skills and experience to do what they do.
2. Minimum financial requirements for every licensed contractor. This means contractors are required to have net assets to cover between four and six per cent of their annual turnover. This goes a long way to providing assurance that they are financially stable.
3. Mandatory, government-backed home warranty insurance for detached houses and townhouses. Home owners are covered (to a reasonable degree) in the event that the building is not completed (because the builder is dead or insolvent), the builder fails to rectify defective work, or the dwelling is affected by subsidence.
4. Highly regulated building certifiers who confirm at critical stages during the building process that the work complies with the National Construction Code (NCC).

And then there is the industry regulator who oversees all of this and more – the Queensland Building & Construction Commission (QBCC). They have a state-wide presence and extensive powers that mean (amongst other things) they can stop failed contractors from ‘phoenixing’, they can direct contractors to rectify defective work up to  six years and  six months after the building is completed, and they can take action against any party supplying or installing unsafe or non-conforming building products.

That’s not to say that things can’t improve. There’s a long list of changes that we would like to see, including having the QBCC provide industry with clarity and certainty about how they will exercise their (enormous) powers, a series of regulatory guidelines, and extending Home Warranty Insurance to cover apartments in residential towers.

There are also a number of reforms recommended in the Shergold-Weir Building Confidence report that will make a difference in Queensland and nationally, when they are eventually implemented across the country:

• Licensing/registering all building practitioners (builders, project managers, engineers and architects)
• Mandating continuing professional development for licensing/registration
• Providing resources to assist industry understand and interpret NCC requirements and standards
• Better recognition of the value chain in the regulatory process by apportioning a statutory duty to design practitioners
• Delivering a centralised and regulated product register and certification system that validates product conformance and penalises non-conformance
• Implementing a system for better feedback loops and engagement with industry by regulators on failures in the system, rectification and reform activity.

However, despite all of this, the very nature of building work means there will undoubtedly be some defects in Queensland’s stable of new(ish) residential towers. These defects will range from the serious, like water leaks, fire safety issues, combustible cladding, or minor, non-structural problems. Fortunately for us, the laws already exist in Queensland to deal with these issues.

There’s been a lot of talk, particularly in NSW and Victoria, about the cost of rectifying these defects in newly built residential towers. The most recent report is the Construction, Forestry, Maritime, Mining and Energy Union’s (CFMMEU) ‘Shaky Foundations: the National Construction Crisis’ report, released on 19 August.

The report estimates that it will cost about $6.2 billion to address the structural and safety defects in affected buildings. That’s a staggering amount. But for all of the reasons outlined above, it’s certainly not as serious an issue in Queensland as in the southern states.

These costs are attributed, in part, to water leaks and fire protections which the QBCC is all well across and deals with this by auditing sites during construction.  And we know from the Safer Building Program that is currently underway in Queensland that in May 2021, we will have a clear picture of how many buildings have combustible cladding that requires rectification. Estimates are no more than 100 building across the state; perhaps it maybe half of that number.

The suggestion that the country's building industry had reached crisis point is well short of the mark when it comes to Queensland. We’re a long way head of the other states and territories.

But the fact remains that the cost of rectification will be significant and a decision needs to be made about who foots the bill.

Our position remains very clear. Builders should not be liable for buildings that were widely understood by both industry and government to comply with the NCC at the time of construction. This is not a case of dodgy builders or subpar building practices. The responsibility lies firmly with governments for the shortcomings of the NC C and their failure to recognise for 20 plus years that unsafe combustible cladding was used on buildings.