Cracking Up: Investigating Australia's apartment building crisis | Four Corners

good evening we begin our bulletin with breaking news Australia's apartment building industry is in crisis in emergency operations underway at Sydney Olympic Park for decades it's been harboring a dirty secret due to fears that a 30-story apartment building a litany of construction defect tonight a 30-story building evacuated over fears an apartment block could collapse a tower of uncertainty cracks in the Foundation's to facade crumbling and hundreds of residents left out in the cold do you have anything to say about the people still inside when the building is being evacuated it's a problem affecting thousands of new apartment owners across the country for many people that's their only asset and the expectation should be in Australia my greatest asset should be safe it's not until as we say as we've seen people exit their properties have to be out on the streets basically does this start to you know come to the attention of the government I just think that it stems from loose regulation government regulation that basically is a cowboy industry there's clearly a crisis of confidence and there needs to be a lot of work done to rebuild that confidence probably across the community if I have to pay for the repairs myself I would have to go bankrupt there's no way that I could pay for it if it was asked of me to pay my share I don't have the money I can get anymore money alone to me I'd be done tonight on four corners we investigate what's gone wrong with the Australian construction industry and how decades of inaction has fostered a crisis that will last for years to come [Music] [Music] on Friday June 14 Rosslyn lien took an early train home from her job in the Sydney CBD after a disturbing call from her son I was at work it was about 4:30 quarter five in the afternoon Isaac had the day off work he rang me and said I don't want to alarm your mom but I think something's going on here there's a lot of workers in the carpark basement Station [Music] the liens lived in a ten-story apartment complex built above the station mascot towers days earlier cracks had been detected in the carpark engineers were called in and they discovered the building was moving [Music] so the initial triple zero call came in and it gave information about a potential building or structure collapse from the owners from that building so we classified that as a building structure rescue or collapse so our initial response to that was two fire trucks and a rescue truck I saw at the hype is worker guy on the left and I just said him in jest you know is the building to collapse just expecting it you know a big now as a reaction and he turned around calmly and said ball yeah there's a good chance there is and I said how much we said all probably around about six percent sirens started to come police fire engine all these sirens the first questions that were asked is it a collapse is an impending collapse is it an intentional collapse and information we had that it was only a risk of collapse say my head goes around what what are the risks the areas what resources may I need I start thinking along those lines as I'm approaching I went downstairs and my fireman came up to me and said if I wish you I'd be packing you back we decided in conjunction in a collaborative approach we the whole team that was there of Engineers police ambulance of the best way forward is announcer the back your way just to stop us the United to protect the safety of everybody within that building residents were ordered to gather a few essentials and get out the building manager say everyone has to be out by 9:00 p.m. I think at that time on we found out it was probably 7 o'clock so we had two hours to pack of the film arrange accommodation and get our cars out and all sorts of things so it was chaos the police about closing off the street it was just get out basically get out and you're in shock and I think when you get out you're starting to think did that really happen obviously it's a Friday evening they come home from work and we're coming home from work so obviously a lot of stuff happening around their place and they need to get information for and we did our best to try and actually keeping her level of you know ghostly calm and and works very like we would at every incident yeah you know is he very emotional and confusing time the drama at mascot Towers has become symbolic of the crisis that has engulfed Australia's apartment industry oh this is a pivotal time there's certainly a crisis of confidence in the broader community there's concern amongst industry there's concern amongst organizations like ours and engineers Australia so this is a pivotal time to take action and to fix it mascot towers has a troubled history [Music] crate young was one of the first to buy in so crate which one was yours my partner was the first balcan you'll see just above this podium level here I first bought into here in 2009 at the time it was one of the few places around nothing was only the second apartment block in this area and it was convenient close to the train station and close to work for me which is not far away so it worked out well within a few years defects started appearing at the beginning we had minor defect problems hot water small things like that not major later on we had a few other defects that were resolved in 2012 the owners corporation met to discuss suing the Builder when the Chairman called for a vote on a motion to proceed with legal proceedings which we had to do to spend that sort of dollars on the efforts the representative of the Builder and developer was there along with their lawyer and they stood up and you know the representative from the Builder said if you proceed with this you'll never be able to sell your apartments and you know that left everyone sort of wondering whether they should proceed or not obviously Craig Young sold his apartment five years ago well before the current structural cracking emerged and what do you think about that decision now I dodged a bullet obviously I hated I feel for the people that are here and paid to be in that position mascot Towers is 11 years old so the owners have run out of time to sue the Builder if he's found responsible for the cracking depending on the state or territory apartment owners only have between five and ten years to sue for major structural defects two months after mascot towers was evacuated the owners are still waiting to find out what happened from what we understand so far it's not really owners fault their buildings in the situation it is its major cracking we've got experts all over the place at the moment so until we get all that that back we really don't know what's happened where it's happened and potentially whose fault it is I'm embarrassed in Frank frankly that the industry has allowed a product like mascot towers to turn up on the marketplace but you know that Friday at a New South Wales parliamentary inquiry the newly installed State Building Commissioner David Chandler made it clear who he thinks is responsible for the problems my personal observation of the engineering design is that it's poor and I've built a lot of buildings and I I have to say when I walked across that job yesterday I don't think I've seen many buildings as poorly built as that okay there's a builder there that was operating that really shouldn't have been in the space doing it they didn't have the capability they certainly didn't know how to read a construction drawing but perhaps the drawings in the first place were flawed four corners tried to speak to mascot towers development Jonna Linus opposite talk to us lawyers for John Elias said the building was constructed in accordance with all development approvals just moving from location to location and we don't know when we can move back home that must be intensely frustrating yes it's living uncertain every day one day we could be notified of moving in tomorrow the next day we could be possibly be notified that we can't go back in for a year or worse that the building has to be demolished is this an isolated case or is it symptomatic of something that's going on look I think construction defects themselves are a symptomatic of the the problem across and this is just one but one example you know you're sending the press recently more and more buildings now are coming out and saying hey we've got we've got problems as well with defects mascot towers is part of an australia-wide apartment building boom that has lasted for twenty years since the Sydney Olympics in 2000 more than 650,000 apartments have been built across the country people are reinventing what be great Australian Dream means for them and for a lot of people that still were suburban bloggers than the freestanding house but for a lot of other people that's something different it's it's an apartment in the right location with great access to employment enjoying a vibrancy of lifestyle that you just don't get in a suburb is the big growth in apartment living has come in recent decades last two or three decades in particular its spent transformation but the boom has come with a hidden pot but how common would you say defects are across buildings in Australia very common it's very common we've got a real problem here it's systemic and it's infecting lots of buildings across the landscape in all parts of the country it's very clear and it's very prominent and we've got a serious problem here what we're saying is the outcomes from poorly over sighted industry with with lack of competence and in some cases a lack of integrity commercial imperatives have really overtaken public interest in terms of decisions that have been made lawyer Bronwyn Weir co-wrote a major report in February 2018 for federal and state governments that identified many of the problems that have since come to light I guess the things that we predicted and we're worried about have manifested themselves in these you know really tragic and awful circumstances for occupiers of those buildings [Music] the extent of the defects problem was revealed in a landmark study published in June this year the figures are staggering in New South Wales 97% of the buildings that we looked at at at least one defect in multiple locations that was followed by Victoria with 74% and Queensland with 71% there's a chronic problem here there's multiple parts of building that are affected by defects it's not isolated to one type of or one part of the building it's across multiple areas in relation to how the building is being constructed the problems plaguing Australia's apartment buildings start right back at the drawing board the process starts not as commonly thought with it being the tradie turning up to site and doing a bad job xiangqi Tralee sort of thing that's a that is the common misunderstanding in fact the process of these defects being generated starts right at the beginning with the developer industry troubleshooter ross taylor says a common practice by developers is to use big-name architects just at the concept stage to give the project sales appeal developers when they develop a strategy for selling they have to get the sales off the plan straightaway once they've got the pre-sales and the bank then allows the money to flow they then cut the name architect and then go to an unregistered design unregistered architect or draftsman just to map out the basics to go to tender that's the start of the defects in the industry it's known as the design and construct models and it's at the core of the defects issue you define the Builder who has no training in design by the way now takes responsibility for the design done to date and completing the last half of the detail now he's doing that on a tight budget and so what frequently happens is he gets the subcontractor to finished the designs the way they see fit the subcontractor doesn't have time to complete that design and so he gets his tradies that turned up on the job to finish the design off on the go that's the design and construct model that's operating in most of these high-rise buildings and is at the heart of the problems that we see today the 120 unit olara complex in the Canberra suburb of Bruce began with excellent credentials the developer in this case has hired one of the best names in architecture in Australia in fact the architects that had designed Parliament House in Canberra doesn't get better than that the award-winning architects were replaced before construction started the problems that olara began within a couple of years of its completion in 2007 [Music] the initial things I guess my daughter was who was living here was saying our dad forgot some weeks in the balcony or the cowpox for that was the initial thing so then made inquiries Australian manager about what was happening and in the full details reveal about the number of issues that we had here we've got occupancy certificates and pills start moving in people have lived here for years now and it's I don't wanna say it's falling apart it's not but it's got a lot of issues and how much worse does it make it given that it was you know your first its shuttering like this is what I say for every all young people are in code you know save up and buy your first home because then you're set for life everything's good at that point but it's not not when you move into this yes typical three storeys high concrete frame structure the owners called in defects expert Ross Taylor the most apparent waterproofing issues of water through balconies and into basements and garages and then had substantial cracking on the facades render and brickwork of the facades which is apparent to anybody walking around the place or buying then there were fire regulation issues and there were structural alert adequacy issues that had to be addressed here is a what's called a construction joint or an expansion joint over the top of the garage which leaks any time it rains after failed attempts to get the Builder to fix the defects the owners took him to court but the Builder placed the company B&T constructions into administration claiming millions of dollars in debts it became clear following the appointment of the liquidator that there was no money for the owners corporation in fact there were no money there was no monies for a number of most corporations that the Builder had been responsible for so this was a tactic was it I mean I can't speak to the mind of the builders but he had a group of companies there were intercompany loans between those companies and certainly I would expect that the intention of having a group of companies was to protect his assets and ensure that that there was difficult to get any monies that were around the olara owners tried to claim against a special insurance fund set up by the AC t government but the federal court ruled they were outside the five year maximum period the owners are appealing the decision if they lose they face a multi-million dollar defects bill it's mostly the stress for me I'm quite lucky that my apartment itself isn't affected I'm not like other people who have leaks within their apartment who have mold growing and things like that so I'm pretty lucky in that way but it's the stress of it knowing that things could go wrong in the federal court and we I could be dumped with the cost of repair my share of repairing this place now in retirement we're still paying off a mortgage and that's our superannuation man I'm just going to pay off a mortgage which we never intended to do instead money running out and we're no idea to it might run out when we run out but sure it's certainly it's our superannuation money now that's paying the mortgage up and in terms of the value of the unit where are you now from what you paid for it initially probably probably minus fifty or sixty thousand lares builder and developer ivan bull 'm has a history with AC t-- regulators in 2015 one of his companies was fined $10,000 over defects at a separate development ivan Bullen might have walked away from olara but that hasn't stopped him developing new projects this is one of his company's latest ventures selling high-end apartments off the plan in central camera four corners approach Pullum group for an interview but didn't get a response if I have to pay for the repairs myself I would have to go bankrupt there's no way that I could pay for it if it was asked of me to pay my share I don't have the money I couldn't get any more money alone to me I'd be done of all the defect problems water issues are by far the most common they affect people directly they affect them everyday they cause a significant amount of damage over and above the defect itself and so they're very expensive to fix [Music] so yeah just I'm not sure Bronwen Kosh bought her in a Melbourne apartment as an investment two years ago it's the first time she's been back since rectification work began after serious water damage basically before this the apartment was full of mold so this is the bedroom here and this was like a walk through and wardrobes on either side the bathroom so the mold was basically all through the wardrobes the mold covered the whole of the roof down the side of the walls and sprint over to the other side as well so it was all over the roof as well and it was black mold as well so it basically rendered the apartment unlivable the problem started weeks after she bought the place shortly after her first tenants moved in had a shower the bathroom would flood because the floor wasn't falling the right way we've had irrigation at the front that flooded my whole courtyard then the last flood which is what caused kind of like a bomb was the tenants come home and found the carpet completely saturated it looked as if water had been running down the walls or it came from somewhere around here so yeah it was quite devastating pretty much as you can see yeah the Builder accused her tenants of sabotaging the apartment so they could break the lease that's what got me angry yeah it was a day you blame my tenant when clearly it's it's your fault yeah it's your shonky workmanship from when Kosh was forced to sue her builder because he didn't have insurance covering her for defects or unfinished work in Australia builders don't need the insurance if the building is over three stories high so of course this apartment is more than three stories high my builder doesn't have builder's warranty insurance so I've got nothing to come back on except the Builder himself how surprised were you to learn that horrified absolutely horrified because it's not knowing if people are not prepared for that kind of financial burden they can find it really devastating and I see it with almost all of my clients coming to me and asking well what do we do now and unfortunately they all have to spend more money on more expert reports more legal fees before they can even get the Builder in a room to start talking about what they might cover and generally they're always somewhat out of pocket even if they do recover part of it from the Builder I've just got no words like I never expected this at all and I never expected to not have support or backup from you know the government departments and things like that and you know we're builders or whoever can just wipe their hands and go not my problem and I'm left standing with you know something that completely wasn't my fault the other major defect issue is fire protection in June 2017 the world woke up to the dangers of inadequate fire prevention in high-rise towers the Grenfell disaster in London killed 72 people and the fire spread due to plan the world planning flammable cladding on Australian buildings is now in the spotlight but other common fire safety defects largely remain hidden I have never seen a building that isn't defective in some way yeah and I mean I know it's my job but even just walking around in public I noticed these things I've never seen a building that isn't defective forensic engineer Jonathan doula sees firsthand the consequences of cost-cutting and poor design so this building the apartment doors aren't actually fire doors they're just solid core doors and they did that to save on cost fire doors quite expensive at about one and a half grand to install these onto a couple hundred bucks so what does that mean for the fire safety of the doors it means that you're only gonna get a maximum rating of about half an hour that the door can resist fire but that's not guaranteed he's taking us through a Melbourne apartment block with serious problems including fire stairs that in an emergency could put lives at risk throw in a fire there'll be a lot of smoke in the hallways people won't be able to see mostly lights have come on but that won't make a difference and then they'll get to the doors then they'll come into the stair and they might be faced with 750 people trying to get out at the same time as you can see there's no space to fit that amount of people what's the primary motivation for the Builder of doing what's happened here primary motivation is definitely to get more floor space that is sellable and in apartment buildings that's worth a lot of money so given all the regulations that are in place how does a system like this get signed off in a building like this well it started with the privatization of the building surveying industry one of the biggest changes to the building industry happened 25 years ago with the shift to private certification state government started allowing building work to be signed off by private contractors to speed up the approval process the certifier in this current system is contractually obligated to the developer to develop highest so in a lot of ways representing the developer not the future owner and the certifier system then has become virtually it's a placebo system it's one that you put in place when you feel you have to have one but is of no actual effect how big an issue in your view has this been in creating the current situation well depends who you ask some stakeholders say this is their very reason for all of this that certifies themselves of course to know that there are bad apples in every process in every discipline so yes of course building certifiers have a case to answer in relation to the quality of construction New South Wales in Australia today in terms of the proportion of responsibility a proportion of blame that the certifies receiving is is very damaging to our brand it very damaging to our discipline and blatantly completely incorrect mean appropriate so what we've got in here is typical with an apartment building under construction where we've got all the fire rated walls that separate all the apartments david black it has been a building certifier in New South Wales for 25 years he says the problem is not the certifiers it's the system so often there is a perception that the certifier is like that the policeman on site is that accurate Nick not why not now absolutely not that the frequency of site attendance is governed by legislation now if we stick to to minimum legislative requirements we are on site 5% of the construction program if that we're here from for absolute milestone inspections only so to suggest that we are placing the project it couldn't be any further inaccurate to certify is under New South Wales legislation where the law says certifiers are only required to check a fraction of these important safety devices called fire dampers designed to prevent fire spreading through a building in a building of this size what are we five six levels there could literally be hundreds and hundreds of fire dampers penetrating the walls so you're only required to check 1 1 / 4 1 1 / 4 that seems if I have 300 I check 1 to 99 escape our book so Shawn what we're looking at here is an apartment bathroom and ensuite Oh the same applies to the waterproofing of bathrooms we're required to look at certifies in New South Wales we're required to look at 10% only per floor 100 bathrooms 10 10 bathrooms only we're required to look at so when we come out we're looking at a membrane on a floor we have no knowledge of how many coats have gone down we've got no knowledge of how is installed and we've certainly got no knowledge of what happens to that floor after we walk away from the site certifiers approved most construction work by relying on trades people and engineers saying they've done the job properly none of that paperwork carries any legal recognition it's not they're not legal documents in some instances they could be written on a beer coaster because they carry no recognition in the surgery process the only one document that carries the legal recognition is our occupations to you if something was to file will go wrong down the track it's the occupation certificate that's brought to the table and it's the issuance or the the author of the occupation certificate who is in the firing line now that's you and that's me [Music] a spectacular example of alleged poor certification of buildings is currently playing out in the northern territory later this month the structural engineer is set to face an inquiry into alleged professional misconduct after nine multi-story buildings in Darwin and Palmerston were deemed to be non-compliant a government ordered of the engineers work showed the building's he approved failed to meet the national construction standards if found guilty he faces deregistration in the Northern Territory but that wouldn't stop him from practicing in other states the trouble at the moment is almost anybody in Australia came claim to be an engineer other than in Queensland where there's been a registration system in place since 1930 in other states and jurisdictions there is no restriction on anybody claiming to be an engineer we regard that as being unacceptable and I think the community regards us being unacceptable tonight a 30-story Sydney apartment building is evacuated amid fears it could collapse last Christmas Eve Opel tower residents in Sydney were forced out of their apartments after major cracking the building was less than a year old I was thinking Australia's you know very good in our regulation stuff but it was very shocked for me an independent investigation found the damage was caused by changes to the original design the report said it could have been avoided with a registry of engineers to ensure high standards and regular inspections of the design by another independent engineer that expert report identified that one of the critical factors to the problems in their building was he was not built as designed so the people who are constructing that building made changes to the design presumably not knowing the impact of those changes what they were doing was going to fundamentally alter the functioning of the building another major problem contributing the defects is the use of poor quality building products their structural steel work that's substandard there has been problems with asbestos contamination of fiber cement boards in various hospitals around the country there's also a concern now about lead and lead contamination of plumbing parts there's glass which is substandard balcony's has exploded and informed to the street in melbourne we've got the flammable cladding issue [Music] it's a Tuesday morning and inspectors from the Queensland Building and Construction Commission or Q BCC are heading to a Brisbane building site [Applause] thank you Tom it's just one of the Queensland running missions programs we do random site inspections and we just love to do something quick come on site level of a year floor plans whatever the private certifier signed off and then got to walk it's a good time yeah absolutely we might get you signed in and we'll go for a walk all right thank you q bcc has broad powers to police building sites one of its key roles is to crack down on a major issue in the industry dangerous products this site gets the all-clear one of the key reasons the Queensland Parliament gave us this power is to make sure that if you are bringing a product into Queensland and then putting it on a building site that it is safe that it meets the requisite standards and that people can have confidence in the built environment in Queensland Queensland's law is designed to ensure that every person involved in a building can be held legally responsible for the products they use we've imposed a duty of care on all the people in the building supply chain to ensure that it wasn't just the Building Surveyor at the end of the process that had the duty he was actually everybody which means that that you can't be in as an architect around say it wasn't my fault or the Builder it wasn't my fault because you now have a duty to actually make sure it actually is your responsibility so there was a it's a fundamental change in the way that building governance and building regulation is supposed to happen and should happen the Queensland law was supposed to be a model for the whole country in 2017 New South Wales was set to follow Queensland with its own building products law the industry was shown a draft bill but when it got to Parliament it had been watered down the reason for cornices confirmed cabinet was worried more regulation could slow down the construction business we was shocked because the whole thing had been heavily edited and we were counted up about 80 closets that had been pulled out of the documentation and those clauses were all around in non-conforming building parts in fact the definition of a non-conforming building product wasn't even in the bill all these are the clauses to do with chain of responsibility and duty of care they were all taken out as we're all powers the recall powers the minister had to recall defective products so all the things that that actually would make the bill a chain of responsibility bill were gone sort of being gutted got it absolutely gutted and so the industry were we were appalled and so when you South Wales failed to do that the other states and territories went cold on the whole idea when Australia's building ministers met in Sydney in July there was a growing sense of crisis we need to do is rebuild confidence in Australia's building and construction sector but they'd known about the problems for years people have been jumping up and down about these for years and years and years you know I've spoken to a lot of people in the industry that have been really concerned about the nature of building defects in this country and they've there's been lots of committees formed there's been lots of task force there's been lots of consideration around this but really nothing has happened 17 months before the July meeting they've been handed a major report by lawyer Bronwyn Weir and former public servant Peter shergold [Music] one of the tasks we were asked to do was to consider other reports and essentially what our report does is draw the threads together of other other you know very eminent experts who've told governments that these issues are occurring in the sector that's why our report is so concise because it was so obvious looking at a range of reports what the key themes were so these people have been saying these things for a long long time it's not until as we as we've seen people exit their properties have to be out on the streets basically does they start to you know come to the attention of the government or governments the building ministers finally agreed to implement the report's recommendations including a crackdown on private certifiers and registering everyone involved in the building process the states and territories have committed to nationally consistent outcomes that's what industry has been calling for they've got the key recommendations from the Shergold we are report and if they don't act I think that they will rightfully deserve and get the wrath of the Australian public so it's very important that as government's work through these issues they do give it priority it doesn't just disappear from the headlines and therefore disappear from from policymakers focus and that we do get those recommendations in it's important obviously for all those people who are living in apartments or looking to purchase apartments but it's also important for an industry which provides hundreds of thousands of jobs for the Australian economy at a time when we need those jobs if the states and territories implemented all of your recommendations in your report today what's the legacy that we're still left with in terms of buildings that have been constructed over the last 20 years existing building a stock is what it is you know we have hundreds of thousands of apartments that have been built across the country over the last two three decades probably the prevalence of non-compliance has been particularly bad I would say in the last say 15 to 20 years it's it's gotten worse over that period and that means there's a lot of existing building stock that has defects in it and we've heard many reports of owners dealing with those challenges that can't be fixed by reforms you know you know responding to how recommendations would you buy a new apartment today I wouldn't buy a newly built apartment no I'd be if I was going to be investing in an apartment I'd buy an older one the drama of mascot towers has forced governments to act on the national defects issue but that's little comfort for residents we received an email on Monday night saying that our building was moving in a downward motion and it would be better if we moved all of our furniture out it conjured up images of the building sinking Rosalynn Lane is living in a service department partly paid for by the New South Wales government she's allowed into the building on restricted days to water her plants this week owners expect an engineer's report to reveal what's wrong with the building my worst fear would be that if we can't move back at all or we're out from much longer what what are we going to do financially I don't know how this is going to go that's my worst fear not knowing how long we'll be out of our apartment and the financial situation it's going to put on all of us so that's my work close to a hundred and forty thousand apartments are currently planned or being built across the country the lesson from this crisis is buyer beware for me personally I would not like a brand new apartment ever again I think for me this is on the damage for me I don't want to go through this again don't buy an apartment I'm I just can't say you don't know what you're walking into anymore with other with this going on everywhere you you're really rolling the dice now [Music] you

Channel: ABC News In-depth

Views: 639,518

Rating: 4.8136163 out of 5

Keywords: Australia, property, building boom, apartment boom, apartments, home, buying a home, buying an apartment, investigation, news, abc, abc news, Four Corners, Four Corners ABC, construction, construction industry, building industry, real estate, mortgage, housing, home loan, building an apartment, apartment construction, defects, building defects, building defects australia, housing in Australia

Id: NYzwIrybSjU

Length: 43min 37sec (2617 seconds)

Published: Mon Aug 19 2019

Reddit Comments

[u/[deleted]]

This took literally 28 minutes to get to the heart of the issue which is the privatisation of the building surveyor industry... the industry spent so fucking long lobbying for this and here’s so much $$$ interest in it now there’s absolutely no hope of fixing it and no one is even vaguely politically brave enough to reverse it even marginally. It’s fucked.

[u/bundahgirl]

MY APARTMENT IS ONE OF THEM !!!

[u/ItchyDifference]

Just like in BC & Alberta Canada...spreads like a plague.