1,011 owners of strata title properties were asked "To your knowledge, have any of the following defects ever been present in your strata scheme?' (multiple responses permitted)

More and more city-dwellers choose to live in apartments so they can live in more accessible locations. In the order of three and a half million Australians now live in multi unit housing.

Living at density with shared ownership of common property provides many benefits, but it also presents big challenges. The strata title system was introduced in the 1960s to address those problems but it’s getting old and creaky.

A new report prepared by the City Futures Research Centre at the University of New South Wales reveals a litany of difficulties with NSW’s strata titles system. It shows there are worrying inadequacies in the way multi-unit buildings in Sydney are managed and maintained.

The researcher was undertaken by Dr Hazel Easthope, Prof Bill Randolph and Sarah Judd. They consulted 1,550 individuals including 1,020 strata owners, 413 executive committee members, 106 strata managing agents and 11 peak body representatives.

They found a high incidence of building defects, a lack of engagement by owners in the running of their strata schemes and inadequate financial planning for repairs and maintenance in a lot of buildings. Many strata owners do not understand their responsibilities and rights and resolving differences can be a bitter and unhappy process.

The most striking finding is 72% of owners say their building has had one or more defects. The figure rises to 85% when only buildings completed since 2000 are considered.

It can be argued there’ll inevitably be issues with any building project, so that’s not necessarily a big deal. However what’s shocking is three quarters of those 85% report one or more defects have never been fixed.

Nor are these minor problems like maintenance issues. The three most commonly cited defects are water entering the interior of the building from outside, water leaking within the building, and internal and external cracks (see exhibit).

Just as alarming is the finding that many owners have problems identifying the boundary between their property and common property! It’s got to be hard to define rights and responsibilities when an owner and the committee can’t be sure where properties begin and end!

The building inspection system appears to be implicated in this debacle. Yet Fair Trading Minister Anthony Roberts reduced the warranty period for apartment owners last year. There are some obvious parallels with the building inspection fiasco that came to light in Victoria earlier this year.

More than half of management agents interviewed said there were aspects of design that made management more difficult.

Besides defects such as inadequate waterproofing, the most common problems raised were poorly located services which are difficult to access for maintenance.

Designers need to think harder about the long-term ramifications of their decisions. What might be treated as a minor issue down the track by a large housing authority can be much more difficult to resolve happily where multiple owners with different priorities and capacities to pay are involved.

It’s not just design and construction-related issues however that seem to dog multi unit housing developments. Reaching agreement over matters of collective interest like maintenance seems very fraught. A large proportion (39%) of the committee members interviewed said there had been problems in reaching agreement.

The most common issues resulting in disagreements were those relating to major expenditures, including major repairs. The most common explanations given for these disagreements related to personality clashes and the competing interests of individuals in a scheme.

Disputes are accordingly a major issue. People disagree over parking, pets, noise and a host of other issues. New terms like “smoking drift” and “hotbedding” indicate there are new challenges with collective forms of tenure. The competence of strata managers is also a perennial concern.

When owners were asked about disputes, 51% said there had been disputes in the time since they’d purchased their unit, mostly about parking, noise and breaking by-laws. In 40% of disputes, formal measures were taken in an effort to resolve the issue.

Parking disputes were most commonly caused by cars parking illegally on common property, particularly in visitor car spaces and the difficulties experienced in trying to enforce parking rules. Regarding noise, while some owners pointed to the behaviour of other residents as a reason for noise problems, many identified noise issues that resulted from the quality and design of the buildings in their schemes.

More than a quarter of Sydneysiders already live in strata title developments and this will inevitably rise. One estimate puts the proportion at 45% by 2030. The proportion of residents of other Australian cities living in strata title developments is also increasing as more residents seek to live in accessible locations.

It’s therefore extremely important that the quality of construction of new developments is improved. It’s just as important that the strata title legislation is suited to the exigencies of modern living and is able to provide ways of resolving disputes effectively, cheaply and fairly, preferably before they escalate to formal processes.

The NSW Government is currently undertaking a major review of the legislation. A discussion paper on strata and community title law will be issued later this year.