Building Commission NSW fails to seek fines for developers that lag on defect orders

Australia Broadcast Center

8 hours ago

Thomas Luxton has been forced to launch his own legal action against the developer of his Sydney apartment building after it ignored the regulator's order to fix serious fire safety issues.
The developer behind the Rockdale property was referred to the Building Commission NSW's legal enforcement team in March 2024 for non-compliance.
Mr Luxton waited months for the commission to commence proceedings against the developer, Knightsbridge Development Group, to seek a hefty fine and grew frustrated when no further action was taken.
He described the regulator's defect order as being "about as useful as a sunroof on a submarine".
The ABC can reveal that not a single developer that failed to comply with a defect order issued by the commission, known as a building work rectification order (BWRO), has received a fine.
BWROs outline serious potential or actual defects in residential apartment buildings, such as structural cracking and waterproofing failures.
At least 60 per cent of the 208 rectification orders issued by the commission under the Residential Apartment Buildings Act — which was introduced in 2020 amid a well-publicised crackdown on shonky building work — have not been fully complied with.
Non-compliance is a criminal offence, and the regulator can take a developer or builder to court to seek fines of up to $110,000 for individuals or $330,000 for corporations.
However, the first time Building Commission NSW prosecuted a developer or builder was last month, and it has not secured any court-imposed fines.
A spokesperson for the commission said 40 per cent of its orders had been "fully complied with or revoked", others were being modified, and several were on hold as they were being disputed in court.
In Mr Luxton's case, inspectors found the fire stair pressurisation system was faulty, which "may prevent the safe evacuation of residents" during a fire and cause flames to spread "in an uncontrolled manner".
In November, he launched his own proceedings against the developer at the NSW Civil and Administrative Tribunal on behalf of owners, seeking costs for the repair work.
A spokesperson for Knightsbridge Development Group said it was "working on a solution with body corporate to have the issue resolved", noting the builder had gone into liquidation.
Internal sources at Building Commission NSW say there is a lack of appetite for legal action within management and dysfunction and staffing issues in the legal team.
The regulator has wide-ranging enforcement powers and a mandate to restore trust in the industry to avoid another Mascot or Opal Towers.
A spokesperson for Building Commission NSW said its "primary approach" was to work "constructively with the developer, builder, and owner's corporations to ensure defects are rectified at no cost to homeowners, without the need for legal action", but said it would prosecute if needed.
It is "currently assessing all non-compliant BWROs for further potential regulatory action, including prosecution, licence cancellations and suspensions", the spokesperson said.
The ABC has seen documents obtained under Freedom of Information that reveal the agency previously had an internal list of 42 developers recommended for potential prosecution over non-compliance with an order.
It took the regulator almost a month to respond to the ABC's questions.
Earlier this year the ABC also revealed the agency had handed out thousands of tradie licences without running a criminal history check, as it had failed to secure a memorandum of understanding with NSW Police for information sharing.
The regulator also took more than 16 months to deliver authorisation badges to staff who were legally required to identify themselves on worksites, which some feared might undermine investigations.
The delay stemmed from a long-running branding dispute over whether the new agency should be called the NSW Building Commission or Building Commission NSW.