The NSW Building Commissioner has introduced “Project Intervene” as a response to the widespread problem of significant defects in residential apartment complexes. This groundbreaking program seeks to tackle defects in newly finished and inhabited residential apartments efficiently and economically, offering an alternative to prolonged and costly legal proceedings. This article delves into the origins, qualification criteria, operational procedures, and judicial interactions of Project Intervene, drawing from comprehensive research on the subject.
Project Intervene Registration Period Has Concluded
The opportunity for Owners Corporations to enrol in Project Intervene ended on November 30, 2023. For the most current information regarding the registration process, please consult the official Project Intervene webpage on the NSW Government website. This article will be promptly updated should there be any announcements about the reopening of Project Intervene registrations.
The Origins and Objectives of Project Intervene
In recent years, NSW has witnessed a surge in complaints about substandard construction from new property owners. The Building Commissioner has identified that a staggering 39% of all apartment complexes in NSW suffer from serious defects, while only 4% of legal actions result in successful rectification. These defects encompass a range of issues, including violations of building codes, poor workmanship, and the use of substandard building products.
Project Intervene emerged as a response to this crisis, offering Owners Corporations an alternative route to address defects without resorting to expensive legal battles. The initiative’s core aim is to foster productive discussions between Owners Corporations and those responsible for construction, be it developers or builders. The ultimate goal is to reach a solution that effectively remedies the defects while minimising the financial impact on property owners.
Qualification Requirements and Reach of Project Intervene
Participation in Project Intervene is subject to specific eligibility standards. The building must be less than six years old, ensuring that the statutory warranty remains valid. Moreover, an occupation certificate must have been granted within the past six years. The structure must also be recognized as having serious defects in crucial elements of the common property, including fire safety systems, waterproof membranes, load-bearing components, building enclosure, and essential building services.
It’s crucial to understand, however, that structures where the developer has ceased operations are presently ineligible for Project Intervene. This restriction is designed to guarantee that remediation obligations can be effectively enforced and that the responsible parties, whether developers or builders, are actively engaged in the resolution process.
The Project Intervene Workflow
The Project Intervene journey commences with the submission of a grievance to NSW Fair Trading. This complaint must be filed by an authorised representative of the strata committee or the strata manager within the designated period. The submission should encompass detailed information about the identified defects and their implications for the building.
Upon receipt of a complaint, the Project Intervene team evaluates its eligibility. If deemed suitable, either the NSW Department of Customer Service or an appointed Building Consultant performs a thorough inspection of the premises. This assessment aims to determine the nature and scope of the defects, laying the groundwork for the subsequent remediation process.
Following the inspection, a Draft Building Work Rectification Order (BWRO) is prepared and presented to the developer. This document outlines the necessary corrective measures and establishes a framework for addressing the identified issues. Should the developer concur with the defects identified, they may commit to an undertaking for rectification. An Undertaking Manager is subsequently assigned to oversee the process, ensuring effective communication and progress towards resolving the defects.
In the event that an agreement cannot be reached between the parties involved, the NSW Department of Customer Service issues a final BWRO. This document legally compels the developer to rectify all identified serious defects within specified timeframes. The order is legally binding, and non-compliance may result in penalties or additional legal consequences.
Regulatory Authority and Implementation Mechanisms of Project Intervene
Project Intervene empowers the regulatory body to issue various work orders to developers and builders for fixing non-compliant building work. The initiative’s primary approach is to foster an agreement with the responsible party regarding the identified serious defects and the required remediation work, thereby avoiding potentially costly litigation.
However, in cases where developers refuse to address the defects outlined in the Draft BROW, Project Intervene leverages Fair Trading’s compliance and enforcement powers to mandate that developers and builders rectify these significant issues. This becomes a legally enforceable obligation, with non-compliance potentially resulting in penalties and further legal ramifications. The initiative also ensures that remediation work meets appropriate standards and imposes specific timeframes for completion.
It’s important to note that Project Intervene does not provide a mechanism for awarding damages, which can complicate matters. Property owners who opt to halt ongoing court proceedings after Project Intervene orders have been issued may find themselves liable for the defendants’ legal costs. Furthermore, owners may be unable to recoup their legal expenses, expert fees, and other out-of-pocket costs incurred unless the opposing party agrees. This underscores the necessity of carefully weighing the financial implications when considering the integration of Project Intervene into existing legal proceedings.
Judicial Interactions and Ongoing Legal Processes
A crucial aspect for property owners engaged in active legal disputes is understanding how Project Intervene interfaces with the judicial system. This matter was addressed in the noteworthy case of Strata Plan 99576 v Central Construct Pty Ltd.
In this instance, the Owners Corporation initiated legal action in the Supreme Court against the builder and developer of a stratum complex in August 2021. The Owners Corporation alleged significant defects and non-compliance with the Building Code of Australia (BCA). While these proceedings were ongoing, the Owners Corporation sought assistance from the Department of Fair Trading regarding the defects via correspondence sent on December 14, 2022. Fair Trading subsequently accepted the scheme into Project Intervene on January 24, 2023, and enlisted Sedgwick Australia to assist with the “evaluation and examination” of the strata building and provide an expert report.
As Project Intervene progressed, the builder and developer requested a 12-month suspension of the court proceedings. They argued that the concurrent Project Intervene process could lead to a duplication of costs, time, and expenses, as well as potentially compensable damages. They also contended that without the stay, there was a risk of inconsistent findings, potentially prejudicing their position.
Despite acknowledging the uncertainties surrounding the Project Intervene process, the court rejected their application. It emphasised the Owners Corporation’s right to pursue legal remedies and recognized the ambiguities associated with Project Intervene. While the court acknowledged the risk of inconsistent findings, it concluded that this should not infringe upon the owners’ right to legal action. The court also noted that Project Intervene does not provide for the awarding of damages, further underscoring the importance of preserving owners’ rights within the court system.
Refining the Process: The Need for Additional Judicial Guidance
Given the scarcity of legal precedents and the intricacies surrounding the interplay between Project Intervene and ongoing court cases, there is a pressing need for additional guidance and judicial pronouncements. While the ruling in Strata Plan 99576 v Central Construct Pty Ltd provides valuable insights, more cases and decisions are required to establish a more comprehensive framework.
Enhanced clarity on several key issues would greatly benefit property owners and stakeholders involved in concurrent legal proceedings and defect resolution through Project Intervene. These issues include potential prejudice, cost implications, and the judiciary’s approach to rectification orders issued under Project Intervene.
As more cases are heard and rulings are made, a clearer picture will emerge, allowing for a more refined and effective integration of Project Intervene with the existing legal system. This evolving body of case law will be instrumental in guiding future decisions and ensuring fair outcomes for all parties involved in building defect disputes.
Final Thoughts
Project Intervene offers a promising alternative to expensive and protracted legal battles for Owners Corporations dealing with significant defects in residential apartment buildings. By comprehending the eligibility criteria, procedural steps, and interactions with the judicial system, property owners can more effectively navigate this intricate landscape.
While the current limited case law leaves some uncertainties, staying abreast of new court rulings and obtaining tailored legal counsel will empower owners to make well-informed decisions and safeguard their interests throughout the defect resolution journey.
If you’re facing building defects in your residential apartment, consider seeking advice from experienced strata lawyers who specialise in this area of law. They can provide trusted and independent legal guidance to assist you in resolving your dispute effectively.
