Developer hell

This week’s SPEAKER’S CORNER is by a couple from Vincent, who endured a prolonged nightmare with a construction project next door.

It was the best of times and the worst of times. A line adapted from Dickens prefaces our support for, and concern about, development in Perth and the City of Vincent (specifically, Mt Hawthorn and Leederville). We canvass problems that can arise for existing residents and small business owners when development makes everyday life worse rather than better.

Our tale shows what can happen when building companies are able to visually and structurally damage existing homes and businesses without recompense, have designs supported that diminish exposure to light and warmth for nearby dwellings, undertake construction minus a current Third Party Liability Certificate, carry out unsafe work practices, trespass, leave damaged public walkways, stifle communication, and declare bankruptcy resulting in sub-contractor debt.

Our criticisms are not specifically directed at City of Vincent (where concerns have been taken and mostly responded to sympathetically), but to circumstances that allow certain construction companies to take advantage of confused legislative, policy and administrative processes, and to rely on failed responsibility as default.

From the perspective of persons who care deeply about their homes, businesses, and the local community environment, the construction of a next door mixed-use building over eighteen months’ resulted in the following problems to our building: structural damage to floors and walls, poorly poured wet cement, front entrance security damage, and window skewing. Potholes and cracking were left in the RoW, holes made in fences, water theft occurred, and scaffolding without owner consent was erected.

Throughout eighteen months construction, the owners of our complex consistently endeavoured to engage with the developer, builder and their representatives. We had substantive evidence for our concerns due to a pre-construction Dilapidation Report, photographic evidence, witness statements, engineer’s assessment, and reportage from local residents. The interaction with the builder and associates varied from diplomatic to aggressive. Almost no repair or replacement occurred despite our evidence-based claims. The one exception–indicating builder fault–was an attempt to rectify front entrance damage. It was not effective.

Near the end of the construction, just as we thought an insurance claim against the builder might progress, we were advised that the builder had not only gone into liquidation but that they had no current Third Party Insurance Policy against which we could claim. (That this is allowed in Western Australia stands in stark contrast to the requirements for Vehicle Liability policies.) At a meeting convened for creditors—mostly sub-contractors—advice was that the building company director had moved company assets to outside accounts. The sub-contractors had also heard this news on their work-grapevine. They knew, as we all knew, that such an unethical action—referred to as ‘phoenixing’—is still somehow deemed legal, at least within the Black Letter rather than the ‘spirit’ of the law.

Our building remains in a state of disrepair despite our efforts, including turning to all levels of government, and eventually resorting to lawyers, a hard decision due to both risk and cost. The liquidator and builder’s lawyers have obfuscated and resisted our complex making an insurance claim against their client. While the claim exists we are unable to carry out even the most minor of repairs, leaving people’s homes and businesses affected. We mostly pull together, but this is not always the case when tensions arise and economics intervenes. The ‘best’ of times seems at a distance.

Of course, the ‘best’ of times cannot and should not be measured solely in terms of economics. The hardest aspect of our saga is not so much to do with home and business owners as it is to do with sub-contractors, who acted in good faith, undertook the work, yet lost financially for their labour.

What role is there for future builders who take seriously the value of existing dwellings, and those who live and work in, and build those dwellings? One could be an assurance that any evidence-based damage will be rectified by builders; another is that Third Party Liability Insurance (perhaps with an amount secured at the outset for unforeseen damage) will be formalised; and a third is that parties affected will agree to progress insurance claims when these are made with substantial supporting evidence. That the state and/or the commonwealth introduces legislation with the power and the authority to oversight builder behaviour, including sections to manage the implications of bankruptcy and the so-called freedom to establish another company despite those wounded being left behind, is apparently (and hopefully) a matter being considered by government. In the meanwhile, many are caught in the worst of development and ‘phoenixing’ times.

Postscript: The complex at the core of this piece—the building of which caused so much damage to our own—recently suffered construction-related damage.

No one was seriously injured, fortunately. We understand an insurance claim is now being negotiated.

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