The only story in strata in the past week has been the decision by Building Commissioner David Chandler to hang up his hard hat and retire in August.
So we thought the time was right to look at what he has achieved, the challenges he's faced - like being encourage by his then Minister to have a sit-down with a very dodgy developer - and the legacy he leaves behind for his successor.
He says his challenge for the last few months of his tenure is to get the message out there that there are more protections for consumers than there ever have been.
And you can see his point - people who haven't lived in strata before have zero interest in the stuff we discuss here.
But there is a strong message and it's worth spreading. He and we just need more people to listen.
____________________________________________________
Flat Chat is all about apartment living, especially in Australia.
Find us on Facebook and Twitter and the Flat Chat website.
Send comments and questions to mail@flatchat.com.au.
Register to ask and answer questions about apartment living anonymously on the website.
Recorded by Jimmy Thomson & Sue Williams; Transcribed by Otter.ai; Transcription tidied up and sensified by Raphie.
Find out more about Sue Williams and Jimmy Thomson on their websites.
The only story in strata in the past week has been the decision by Building Commissioner David Chandler to hang up his hard hat and retire in August.
So we thought the time was right to look at what he has achieved, the challenges he's faced - like being encourage by his then Minister to have a sit-down with a very dodgy developer - and the legacy he leaves behind for his successor.
He says his challenge for the last few months of his tenure is to get the message out there that there are more protections for consumers than there ever have been.
And you can see his point - people who haven't lived in strata before have zero interest in the stuff we discuss here.
But there is a strong message and it's worth spreading. He and we just need more people to listen.
____________________________________________________
Flat Chat is all about apartment living, especially in Australia.
Find us on Facebook and Twitter and the Flat Chat website.
Send comments and questions to mail@flatchat.com.au.
Register to ask and answer questions about apartment living anonymously on the website.
Recorded by Jimmy Thomson & Sue Williams; Transcribed by Otter.ai; Transcription tidied up and sensified by Raphie.
Find out more about Sue Williams and Jimmy Thomson on their websites.
Jimmy 00:00
You're back, Sue.
Sue 00:01
Yes!
Jimmy 00:03
But you're going away again?
Sue 00:04
Yes, I am; I'm sorry. I'm going to Kenya tomorrow. I'm going on a journalist job.
Jimmy 00:11
That's okay.
Sue 00:12
Hard life!
Jimmy 00:15
The big story of the past week is David Chandler's resignation, or retirement, more to the point. So we're going to talk about David, probably the whole of the podcast. We're going to talk about his achievements. We're talking about one of his biggest challenges and what he's left behind and the challenge for whoever takes his place. That's plenty, I think.
Sue 00:39
But when you say "whoever takes his place," maybe there'll be a team of people having to step into his shoes.
Jimmy 00:47
Maybe it'll be a job share, I don't know. Will there be a good cop, bad cop come in? But I think there's probably going to be one person, you never know.
Sue 00:56
I like to think of him as the Taylor Swift of strata.
Jimmy 00:59
That's just because I called him the Bruce Springsteen. You're trying to make it younger and more female. Okay, I'm Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.
Sue 01:09
And I'm Sue Williams, and I write about property for the Sydney Morning Herald, The Age, the AFR and Domain.
Jimmy 01:14
And this is the Flat Chat Wrap. So it's been four or five years that David Chandler has been Building Commissioner.
Sue 01:37
Was it much of a shock that he's going to leave now?
Jimmy 01:42
It's a shock, but not a surprise, if that makes sense? It's hard to find out how old he is. But I'm guessing like me, he's in his 70s. I mean, it's been nonstop since he came in.
Sue 01:56
It must be such a stressful job.
Jimmy 01:58
Oh, incredible. And you know, there are threats out there against him; you don't hear about them specifically. But you know, there are people in the development trade, who would be quite happy to see him gone, by whatever means necessary. He came in, in the wake of, first of all, the Opal Tower and then Mascot Tower thing, which became kind of symbolic of how badly developers were performing and behaving. Once they built the defective buildings, then a lot of them were just planning... They would throw up the building and as soon as any defects were identified, they would go into liquidation and disappear and come up as another entity. I mean, it was so blatant. If the developer was building, let's say, a new building on 1 Bayswater Road, they would form a new company called 1 Bayswater Road Development Company, so that the rest of their companies couldn't be affected when they inevitably got done for defects. That was the kind of mess that he came in to clear up.
Sue 03:05
I think nobody thought that the mess could be cleared up, did they really?We thought it was just an absolutely impossible task.
Jimmy 03:13
Yes. The first thing he did was to tell the government what he was going to do, and tell them the legislation he would need to be in place for him to be able to do that. And that's when we got the first sight of the Residential Apartment Building Act, which gave him incredible powers. I mean, those powers included being able to go to a building that was being built badly and stop work.
Sue 03:44
It was unheard of before. All credit to New South Wales Government for giving him the tools that he needed to do that job.
Jimmy 03:50
It was Gladys Berejiklian who got him in there, then Dominic Perrottet kept him there, despite dissent from within his own party, which we'll talk about later. He got a terrific amount of support from the Fair Trading ministers, especially Victor Dominello, who became finance minister as well, and then the government changed and everybody thought will they change his remit? But no, they kept him going, and then they gave him the poison chalice of all poisoned chalices... The radioactive poison chalice, which was to come up with a deal for the Mascot Towers people. The day before he announced his retirement last week, he finally got all the signatures he needed for the Mascot Towers renewal project to go ahead. And as he said at the time, there are a lot of unhappy people and there are a lot of people who are not as happy as they thought they might be. But at least we have a resolution and everybody can just move on, which I think is a huge thing, not just for the Mascot Towers owners; for the whole state.
Sue 05:18
Yes. Some of the owners are very unhappy because they feel they've been incredibly shortchanged, because the government in the first place shouldn't have allowed the problems that ended up wrecking their lives and their finances and their health. In many cases, they shouldn't have let those things happen. But really, there was no decent solution in sight at all.
Jimmy 05:37
And what tends to get glossed over a bit (and I'll be getting hate mail for this), but they were put up in rented accommodation; all that time, the government paid for the rented accommodation. So you know, it's not like they got nothing and at the end of the day, they were basically told "here is the value that we can give you for your apartment," which is nothing like what it would have been if the building hadn't started falling down, and five years on the capital gains, et cetera, et cetera, et cetera. It's really unfortunate, but in some ways, you look at the people who didn't get the benefit. I remember when we first started writing about strata and talking about it, there was a building up in North Sydney where they'd been forced to finalise the payments, get the mortgages and then the local council refused to give them a certificate of occupancy. They couldn't even move into the apartment block, because it was so defective and that was another case where the developer just walked away.
Sue 06:37
And we had other blocks where people were evacuated as well. Sometimes they were allowed to go back in when the building was kind of trussed up and made safe, but you know, long term, there were still going to be huge bills for rectification works. Now that was happening all over Sydney; over on the North Shore, over in the innerwest and then in the east as well. In the south, there's been lots and lots of apartment developments, too. So it was all over Sydney, and probably all over New South Wales as well. We've come a long way, I think and that's down to this government and down to David Chandler and his department; their energy and enthusiasm and drive.
Jimmy 07:17
So what he got himself was the ability to go in and stop work on buildings that were being built defectively. He was able to go in and refuse occupation certificates for buildings that had been built badly, but which were completed. And then you start looking at the list of things that he initiated; Project Intervene, that was where if you were in a building that was less than six years old, and it's still under warranty, and the builder was still around, you could get Fair Trading to come along with their expertise and help you to get your defects fixed by the builder.
Sue 07:56
That's right, rather than ending up having to go to court to force the builder or the developer to fix the defect.
Jimmy 08:03
Which was terrific, because then they were going to have to go against the government, which is a different process.
Sue 08:09
Much deeper pockets. And that expertise, as you said, is really important. Many owners just don't really know what they're letting themselves in for and have no idea of the court cases and stuff. I mean, that's how we got into strata, by having to educate ourselves in a defects case, and it was very painful and very long. So if that can be shortcut in any way, that's fantastic.
Jimmy 08:32
One of the things that he says is... It's not so much a regret, as something he's going to focus on in the last few months of his tenure, trying to educate more people in strata. He told me on the phone the other day that 70% of people in the business, like developers and builders and architects, know about decennial insurance and the iCIRT star rating scheme, but only 30% of consumers.
Sue 09:02
That's a difficult one, isn't it?
Jimmy 09:03
And he says "I keep getting people saying to me 'oh, we should have a star rating system for developers.'" And he's saying "well, we do. It's called this and this is how you access it." So that's going to be a big part of his last few months. But just looking at the other things that he's brought through; Project Remediate, which was to remove flammable cladding from buildings. He brought in the quite controversial Building and Professional Design Act, which a lot of people are not happy about, because it's any work that's over a low threshold of, I think, about $5,000. You have to get a professional architect or designer or engineer to sign off on it and often the cost of getting those professionals is a lot more than the actual cost of the work.
Sue 09:55
You can see the the reasoning behind it. Lots of buildings were doing kind of really amateurish jobs, and weren't good long term for the building.
Jimmy 10:04
You know, it would be individual apartment owners... They would be doing a bodgy job in their apartments and it would be compromising the integrity of the whole building in some cases.
Sue 10:16
Or maybe the executive committee might know somebody who's a handyman and could do some work in a common lobby, or something like that, which is really not up to scratch at all, either. I mean, it will be good if that lower limit was raised, wouldn't it really?
Jimmy 10:31
Yes, about $20,000 is the amount. Other things he brought in were rectification orders that require developers to fix serious or potentially serious defects, compliance cost notices, requiring developers to pay the cost of investigating defects and preparing the orders against them. So it wasn't just a case of saying are you going to fix this? You've got to pay for all the work that's gone into finding out what it is that you need to fix. So you know, it kind of brought an enforced integrity if you want, into the system. All this is part of the government's drive to get people to live in apartments. The only way they're going to seriously tackle the housing crisis is to build more apartments; they are not going to do it by building more houses and making the city even bigger. And there are opportunities there to build apartments above, for instance, railway stations and things like that.
Sue 11:27
Very close to all services. They're close to public transport, close to schools, shops, restaurants, cafes, playing fields, parks, so it makes perfect sense to have more people living in those areas of great amenity. We just have to get rid of the whiff that off-the-plan apartments have historically had. If we can get them to be quality apartments and the kind of apartments that people want to live in; good design and well-constructed, then that's a huge step forward for us all.
Jimmy 11:59
Absolutely. And as he says, the 10-year insurance that's being brought in by some developers... Some insurance companies are now prepared to insure some developers and the iCIRT five-star rating system. And if people just don't buy apartments that are built by people who don't have these things... He said that he was talking to the banks recently, and some of the banks are saying that they're not going to finance apartments that don't have the iCIRT rating, and maybe even that don't have insurance. So if you go for a mortgage because you want to buy into a dodgy development, and your bank manager says "well, no. This developer is not approved."
Sue 12:51
Because it's absolutely open to all developers, to get an iCIRT rating. I mean, it's not like it's just the big boys. It can be small boutique developers, or it can be developers who are coming up.
Jimmy 13:03
But I think it's expensive and time-consuming; that's one of the disadvantages.
Sue 13:07
But then they can charge more for their apartments.
Jimmy 13:11
There's no question of that. But you know, they're reluctant to get involved, because there's no guarantee of course, that they'll get it. And also, part of the iCIRT rating is to look back at the history of the developers and if they've been dodgy in the past, then it's going to be more difficult to get an iCIRT rating now. But that's part of the integrity of the system. It actually protects you from people who've got a history of building bad buildings.
Sue 13:39
They ask people to improve as well, because there are some developers out there who maybe in the past, were well known for not building the best kind of buildings. But recently, they've really improved their act and they've really picked up and they're now doing some great work. There's lots of room for developers to improve, as well.
Jimmy 14:01
As we've said many, many times, it costs several times as much to fix defects once the building is built, than it does to make sure they're not there while you're building. It might be a more expensive process in the building process, but developers who are thinking "maybe we'll get away with this..."We've spoken about the people that we know, with a developer near them who's saying he's just waiting for Chandler to go, so that he can "put up a building and make some real money." We'll be keeping an eye on that one. When we come back, we're going to go back in time a little bit and remember the last time David Chandler resigned.
[MUSIC]
Jimmy
And we're back. It was very funny; as a kind of research before I did my piece for the Fin Review last weekend, I tried to see who else had covered David's resignation. So I googled 'Chandler resignation' and I saw all these stories. I thought "wow, why haven't I seen these in the paper?" It turned out, I was actually looking at stories from two years ago.
Sue 15:19
When he resigned before.
Jimmy 15:20
Yes and that's kind of been a little bit glossed over, but it shows the character of the man. Basically , he said at the time that he couldn't stay in the job because the Minister for Fair Trading at that time did not support his vision, and didn't want to support the legislation that he felt needed to be brought in. The minister at that time was Eleni Petinos, who had (what was until this happened), a very safe seat in Miranda. At the last election, she was on the point of losing it, because, well, she had fallen out of favour with her electorate and Scomo had to come around and campaign with her, to get her over the line. But anyway, the story was that David Chandler was asked to go and meet a couple of developers, one of them was a company called Coronation and the other one was Toplace and their CEO Jean Nassif. Now, the reason she wanted him to go and talk to Jean Nassif was because David had put a stop work order on one of his developments and for whatever reason, Mr. Nassif thought that this would be resolved by having a chat with David Chandler. David Chandler saw this as a huge interference in the process. I mean, he quite rightly was saying, how can a conversation change whether a building is fit for occupation or not? So, he resigned. He said I can't work like this and that caused a huge kerfuffle and also, John Minns, who was then only Property Services Commissioner; he hadn't at that point become Strata Commissioner. He didn't renew his contract when it came up, as well. So the two of them walked out. What happened then was a bit strange. If I recall correctly, the Premier at the time, Dominic Perrottet, had just returned from a conference about women in the workplace and equality and things like that and was told of allegations that Eleni Petinos had been bullying her staff and he came back and basically she was handed the cardboard box and told she was no longer a minister. It kind of feels a bit coincidental, but he said at the time, it had nothing to do with the David Chandler thing.
Sue 17:56
It would be interesting to ask him now, wouldn't it really? Now he's out of power?
Jimmy 17:59
A lot of the people in the Liberal Party felt that she had been badly treated by the press, including people like us, because it was a kind of grubby little thing. She had had an affair with Matt Kean, who was for a while, Fair Trading minister and was a good guy, actually. His green credentials are quite impressive. For a Liberal, he was pretty good, but his girlfriend revealed sexting messages between him and Ms. Petinos, which is a bit embarrassing for both of them. And then later on, she was revealed to have been the person who threw up in the back of John Barilaro's official state car after an event at the racecourse. It was not a great time for her, but I think the David Chandler thing was the last straw in her career at that time. She is now back in as a junior shadow minister in the Liberal opposition in New South Wales, so her career is not over.
Sue 19:11
No. And she did always deny the allegations of having a relationship with Matt Kean as well.
Jimmy 19:16
Really? Okay. Well, fair enough, but that was what was being said at the time. I know that a lot of her colleagues in the Liberal Party felt that she was very badly treated over that, so it was a mess. Anyway, at the end of it, David Chandler was back doing his work and we got another two years out of them, before his announcement last week that he was retiring. When we come back, we're going to talk about what he's left behind, and what his successor will inherit. That's after this.
[MUSIC]
Sue 19:55
So when David actually does go, is it going to be open slather for developers, do you reckon?
Jimmy 20:07
I think not. I think some developers will think that and I think we'll probably see a flurry of dodgy developments coming up. But you know, last year I think it was, when the Building Commission was fully created. 400 people were transferred from Fair Trading into those offices; that's a lot of people. He came up with this funny phrase over the phone, he said "I've been cooking up some people just like me," and he said "they're not going to believe it, what flies out when I open the oven door."
Sue 20:49
He likes a colourful phrase!
Jimmy 20:50
He does. What that means in reality... I mean, he says that those 400 people, a lot of them are analysts, and in a very basic forensic, almost detective way, they will look at developments that have failed in the past. They'll look at the builder, they'll look at the architect, they'll look at the certifier, and, of course, the developer. And if two or three of these people come up in failed buildings in the past, then they look at what they're doing now and they'll say "oh, these guys have got a development out in Miranda... Let's go and have a look at it."
Sue 21:28
Because they'll have an algorithm which will tell them; set off the alarm bells, I suppose, for any other buildings. Well, that's a good idea, isn't it? So it's getting a more sophisticated system all the time and if they're keeping the same level of powers that David Chandler always had, they can act.
Jimmy 21:46
It's there in legislation now. They legislated it, so that the Building Commissioners' staff, his officers, can go into any apartment building and any apartment anywhere in New South Wales. I mean, in some ways, they've got more powers than the police. When he set up the system, he said that they were second only to the military, in their intelligence-gathering powers and I believe it. Can you imagine if you'd been shuffling papers in Fair Trading for two or three years, and then you get tapped on the shoulder, and they say "we want you to analyse and find out the connections between dodgy buildings, and the people who have been building them." It would be very satisfying. Tremendously. So that's what he leaves behind and he also has left behind a culture of, you could call it a zero-tolerance for dodgy buildings.
Sue 22:48
I think they're already recruiting a successor, aren't they? They're looking for possible names.
Jimmy 22:53
They are and going through the due process. I mean, I always suspect with these things, that they know who they're going to appoint before they even start looking. They know who they want, you would think, but legally, they have to go through a process of a search.
Sue 23:10
I wonder if there'll be another engineer like David? I mean, that's a perfect fit for the job, isn't it? I mean, it could have been a lawyer, it could have been an analyst. It could have been an architect, but maybe then an engineer was the absolute right person at that time. But maybe they think it won't be for the next one?
Jimmy 23:30
I think the real fear is that the government might say "look, we cannot build the number of buildings that we need to build, if we are holding back developers," and maybe the next person will be told "you can just turn the screws off a little bit, so we can get more buildings up and we'll try to deal with the consequences of that when they occur," which would be a huge retrograde step. Within five years, we'll be back to square one.
Sue 24:03
And as well, if anything went wrong with any of those buildings, suddenly all of the buildings are looked at askance by potential buyers, so therefore, it would be a huge loss of confidence.
Jimmy 24:14
The problem is, if people need to have somewhere to live, then they need to have somewhere to live and they can't always choose somewhere that's got five-stars.
Sue 24:24
But at the same time... I mean, that building the other day in Bondi, did you read about that, where the balcony fell off? The tenants who complained about their balcony falling off, were immediately evicted.
Jimmy 24:40
It doesn't sound like it was very safe.
Sue 24:42
No, absolutely not.
Jimmy 24:44
I'm just reading a thing by Julie Grove, who is the brains behind StrataVault, which is where you can put all your documents and keep them safe, so they're accessible. She first got interested in strata when she was in Hong Kong. They were in an apartment building, and the balcony on one of the apartments fell down and landed on top of their car. But she said back then, and in Hong Kong, people were just adding balconies to their apartments without any planning permission, or any engineering surveys or anything. And when it happened, people were going "oh, well, shit happens, you know. Good luck with your car insurance." David is going to stay on as a consultant to the government.
Sue 25:36
That's good. So there's some continuity as well.
Jimmy 25:40
He has a weekly post on LinkedIn, called 'The Sunday Roast' and he wants that to get out there, so we're going to start running that on Flat Chat as well. He's not going to disappear.
Sue 25:57
Well, he leaves a great legacy. And it's good that he's still going to be there, carving off the edges.
Jimmy 26:06
I think for somebody like him, he has put so much time and effort into the job that he's done, that it would be very difficult for him just to walk away and go fishing. But he's well past retirement age, and basically has earned a bit of a rest, I think. And on that note, I think we've earned a rest.
Sue 26:27
Yes. But thank you, David.
Jimmy 26:29
Yes. Thanks, David. Who are we going to write about now?
Sue 26:34
We've got a while before he leaves.
Jimmy 26:36
It's August, so we've got two or three months. You will hear him talking about the iCIRT five-star rating and the decennial insurance a lot in the next few month, just to tell people there are protections out there, so just look for them.
Sue 26:55
I do hate that word 'decennial' though. Why isn't it just called 10-year insurance?
Jimmy 27:01
I hate all the acronyms as well. I have to sit there with a glossary, reading some of the stuff that comes out of the Commissioner's office. Anyway, we appreciate him. He's done a great job and we look forward to seeing what happens in the next phase. Thanks, Sue, for taking time off from your packing. And thank you all for listening. We'll talk to you again soon. Thanks for listening to the Flat Chat Wrap podcast. You'll find links to the stories and other references on our website flatchat.com.au. And if you haven't already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, or your favourite pod catcher. Just search for Flat Chat Wrap with a W, click on subscribe, and you'll get this podcast every week without even trying. Thanks again. Talk to you again next week.