High Court decision bad news for apartment owners

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Stephen Goddard from the Owners Corporation Network explains why the court ruling shows government intervention is desperately needed.

A High Court ruling over building defects in a multimillion-dollar apartment complex in Chatswood will make it harder for owners to seek legal redress for shoddy apartments, warn experts.

In the final chapter of a two-year court battle, the High Court ruled on Wednesday that the owners corporation of serviced apartments in a 22-storey building in Railway Street could not sue the builder, Brookfield Multiplex, to recover the cost of fixing alleged defects in common areas.

The ruling comes beforenew building laws are due to take effect in NSWon December 1 that will also limit the rights of apartment ownersto seek redress for faults.

Owners Corporation Network chairman Stephen Goddard: There is a "gaping hole in consumer protection" for residential apartment owners. Photo: Supplied

Owners Corporation Network chairman Stephen Goddard, a strata lawyer, said the State Parliament needed to step in to address a "gaping hole in consumer protection" for residential apartment owners.

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He said "about 85 per cent" of new buildings contained defects. The court's reasoning, while sound, "underlined in red" the need for additional statutory protections for consumers.

The High Court found that contracts relating to the construction and sale of the apartments set out the circumstances in which the builder or developer was liable for defects in building work.

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High Court decision bad news for apartment owners