Pindan development in Fremantle
A boarded-up Pindan development in Fremantle. Photo – Josh van Blommestein.
  • Strata Community Associations says proposed laws are a good start
  • Calls for reintroduction of warranty for apartment complexes above four storeys
  • Proposes a streamlined process for owners to make claims from builders

In the wake of the collapse of Pindan last week, the Strata Community Association (SCA) WA has said the proposed legal reforms are not enough to protect apartment owners and buyers.

Under the WA’s Government new fast-tracked Bill, a new mandatory retention trust scheme will be introduced that is designed to protect subcontractors’ retention money from being lost in insolvency or misappropriated.

Catherine Lezer, SCA WA President, said this doesn’t go far enough and that there should be a reintroduction of home warranty insurance for apartment complexes four-storey and greater needs to occur to give apartment buyers equal protection afforded to house buyers.

“Pindan and similar collapses cause a high degree of financial and emotional distress for all involved,” Ms Lezer said.

“The focus is often on the contractors and tradesman not paid for their work and indeed this is important. I commend the WA government for their efforts in State Parliament this week to introduce the Building and Construction Industry (Security of Payment) Bill 2021.

“But the effects have often ongoing consequences for apartment owners who have purchased in such complexes. Any defects are not able to be fixed as there is no company to fix them.”

Catherine Lezer, SCA WA President

Her calls come as a fellow industry body, the Australian Apartment Advocacy, has reiterated calls for similar reform in the apartment arena.

Ms Lezer referred to the issue of companies that engage in ‘Phoenxiing’ – which refers to a company closing up once a development is completed, meaning no one can be held accountable for defects.

“We know of a building in the city where none of the balustrades were built to code.

“Additionally, the lack of homeowners warranty for complexes four floors and above means the vast majority of apartments have no insurance protection.”

“The stress of living in an apartment that has substantial defects is enormous.”

Ms Lezers referred to cases where apartments were found to have leaking windows resulting in flooding.

“Raising the funds to fix these problems can take years. Pursuing action against any builder or developer becomes so expensive that buildings often don’t even bother. They prefer to spend the money fixing the problems than funding lawyers.

“The answer to most of the issues is to bring back home warranty insurance for apartment complexes and afford apartment buyers the same protections as house buyers.”

Ms Lezers has also proposed the following:

  • Change the laws to ensure duty of care to strata owners from builders; and
  • Remove the legal barriers for negligence claims to pave the way for a clear cut path to recover losses or damages.
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