The Real Cost of Defects

Strata managers today face increasing complexity in managing buildings, often

with limited oversight, incomplete documentation, and escalating stakeholder expectations.

Defects are an unavoidable part of building management, but their impact can be significantly reduced through early detection, documentation, and strategic planning.

A Chaning Industry Landscape

Australian construction activity has reached record lows. The construction sector faces compounding pressures due to both the aftermath of the 2008 Global Financial Crisis (GFC), and persistent skill shortages, combined with inefficiencies. As many experienced professionals have exited the industry, shell companies have emerged, often with little or no post-construction accountability. Risk and liability are being increasingly shifted onto strata managers and owners’ corporations.

At the core of this issue lies poor documentation and a lack of independent oversight. Many projects experience undocumented on-site changes and incomplete recordkeeping, leading to delays and embedding long-term defects. The certification process is typically limited to end-of-build sign offs, bypassing critical in progress quality assurance checks.

Stetting Realistic Expectations from Day One

One of a strata manager’s most important responsibilities is managing the expectations of owners and councils. This begins with education, providing stakeholders with performance-based assessments of building conditions rather than relying on assumptions. Ten-year maintenance plans should be based on real performance data and tailored to the materials and systems in place.

Proactive management depends on consistent, structured reporting. Regularly scheduled defect and performance audits of common areas allow managers to monitor degradation and plan timely interventions. For new builds, it is essential to obtain the Builder’s Warranty Report as early as possible. These reports must be accurate and unbiased to ensure that defects can be resolved within contractual deadlines.

Dilapidation reports are also critical when construction occurs near existing properties. Without a pre-work baseline, the Council of Owners (COO) may have limited grounds to pursue compensation for any structural damage resulting from adjacent activity.

The Cost of Poor Documentation

The absence of reliable documentation and timely intervention can lead to costly consequences. Without accurate 'as-constructed' drawings, diagnosing defects and planning repairs becomes speculative, often resulting in incomplete or ineffective solutions. Engaging building consultants early ensures that proposed scopes of work are properly validated and that repair plans are both thorough and relevant. Vague or incomplete briefs frequently lead to scope creep and increased costs, issues that can be avoided with clear and detailed preparation.

Routine inspections remain essential to maintaining compliance and performance standards. Repairs should be supervised by qualified professionals and include hold points for high-risk areas such as waterproofing and fire protection. Inspections must be conducted before works are covered to ensure no defects are concealed.

A Case Study in Oversight Failure

A recent involving a rooftop terrace highlights the consequences of inadequate

oversight. The building was approximately fifteen years old when the original

waterproofing membrane failed.

After remedial works were carried out and anew membrane was installed, the replacement membrane also failed, this time in under five years, due to a critical component of the system being omitted. The failure was attributed to improper installation and a lack of inspections during the remedial works.

This resulted in significant water ingress, tenant displacement, and a prolonged legal dispute. The case underscores the importance of consistent oversight, not only during initial construction but throughout the building’s lifecycle.

Planning for the Inevitable

Defects are a natural part of the construction process, not anomalies. What determines their impact is how they’re managed. Strata managers must take a proactive, forward-thinking approach, grounded incomprehensive documentation and expert support.

Providing owners with clear, fact-based reports helps set realistic expectations for maintenance and repairs. Strata managers serve a vital role in bridging the communication gap between technical consultants and non-technical stakeholders, ensuring decisions are transparent and aligned with long-term building performance.

With self-regulation in the construction sector proving insufficient, the role of the strata manager has never been more critical. By championing better documentation, involving experts earlier, and implementing regular performance reviews, strata managers can mitigate risk, improve outcomes, and strengthen trust across their communities.

This article was bought to you by SCA (WA) sponsor Building Consultancy and Inspections (BCI WA).