WA's apartment sector has become embroiled in an aggressive campaign led by consumer advocate Samantha Reece as she has ramped up her drive for mandatory construction inspections.
The state’s apartment sector has become embroiled in an aggressive campaign led by consumer advocate Samantha Reece as she has widened her drive for mandatory construction inspections.
The David versus Goliath apartment battle – pitching the self-proclaimed ombudsman against a big part of the industry – began in earnest last month with a warning from Ms Reece, the Australian Apartment Advocacy chief executive, to about two dozen developers seeking their support for mandatory inspections, or else.
The ‘or else’ was clearly stated by Ms Reece in a letter to developers.
“As of November 1, AAA will be commencing an aggressive marketing and PR campaign highlighting those developers that have not supported the audit process,” Ms Reece wrote.
“This will include, but not be limited to, social media advertising, our e-news (which is distributed to 5,000 WA apartment buyers/owners), media, direct mail drops as well as petitioning outside these developers’ sales offices.”
While that challenge merely seemed like an extension of the tactics AAA had used in the recent past to highlight issues with certain developers at various apartment projects, at least two industry associations were alarmed enough to respond to the AAA on behalf of their members.
Both local chapters of Property Council of Australia and Urban Development Institute of Australia wrote to Ms Reece about what they termed threats to defame or otherwise damage the reputation of their members unless they supported the AAA position.
Ms Reece told Business News that, by the time of her deadline, only three developers had met her demand to write to Finance, Commerce, and Women's Interests Minister Sue Ellery supporting mandatory inspections.
The industry body positions, as stated in their responses to Ms Reece, was that their members had chosen those organisations to represent them in negotiations with the state government with regard to mandatory inspections.
Backing the overall quality of work done in Western Australia, the industry anticipates an announcement regarding mandatory inspections to be made in the near future after long-running discussions with the state.
Ms Reece’s view is that time has run out.
“Things have got so bad that we have told buyers to abstain,” she said.
In early November, Ms Reece went a step further than her letter suggested by publicly advising against buying any apartment in WA.
“It is with a heavy heart, that for the first time in seven years of operation we are advising apartment buyers in WA to abstain,” Ms Reece wrote in a LinkedIn post.
“Increases in the presence of defects, lack of mandated audits during construction, and lengthy delays to projects commencing due to lack of operational builders leaves consumers unprotected and vulnerable.
“There are changes that the government and industry can introduce to improve consumer confidence, but until that time apartments in WA are not a wise choice.”
In the commentary linked to that post, some developers criticised her decision to tar the whole industry with the same brush. Ms Reece responded to some individuals by questioning their building standards at certain developments.
Subsequent to that there have been several stories highlighting apartment issues, including this week when Ms Reece told Business News AAA was considering a class action against Shenton Quarter developer Iris PW on behalf of buyers in the $140 million project, shut down by builder BGC in late October.
Property Council of Australia WA Division executive director Sandra Brewer told Business News today the industry felt aggrieved by what she said was a sensationalist campaign against all apartments at a time when it was already dealing with cost issues and financial constraints on consumers, as well as huge demand for housing.
“The industry is distressed and upset by claims that buying an apartment in Perth is something people should not consider,” Ms Brewer said.
She added that Ms Reece’s latest approach from the outset had put developers offside.
“They did not take kindly to threats to petition outside their offices, which is an unusual way to go about gaining their support,” Ms Brewer said.
The aggressiveness of the AAA campaign has led to questions from some in the industry around the motivation behind the shift in direction of the organisation: an unlisted public company and non-profit company, according to Australian Securities and Investments Commission records.
The AAA was previously financially supported by industry members for promoting apartment living.
Industry observers have highlighted AAA’s involvement in an inspection program that has sought to conduct the very audits the organisation is advocating.
Ms Reece said her Apartment Audit and Assurance Accreditation Programme, established with 17 industry-related associations, was not created to profit from the possibility of a mandatory inspection regime.
“We do not think it is appropriate to criticise without providing a solution,” she said.
Ms Reece said the program was offered to the WA government as a trial but was declined.
She added that funding had been sought for the program from the venture capitalists, and at least one developer in Queensland was intending to use the program during a project’s construction.
Another beef the industry has with Ms Reece is her self-proclaimed apartment ombudsman title, which some think is misleading.
An ombudsman is a title typically reserved for a government-appointed supervisor or watchdog.
Ms Reece said she had been asked by a state government representative to stop calling herself an ombudsman but has refused.
“On my LinkedIn I say self-appointed ombudsman,” she said.
“I would like the WA government to appoint an ombudsman and I would not apply for that job.
“All I am trying to do is trigger the government to make the right decisions for the consumer.”
Approached for comment today, UDIA WA stated it would work directly with the state government and provide feedback in relation to any draft policy proposals in relation to building audits or inspections once the detail of what may be proposed had been provided.
“We understand the state government is working on a draft policy in relation to this matter and we will formally respond on behalf of industry when the opportunity arises,” UDIA WA executive director of strategy and policy Sarah Macaulay said.
“To date, UDIA WA has not been provided with any formal policy, proposal or detailed recommendations from AAA or any other party in order to be able to respond more formally or in any detail in relation to proposed audits or inspections.
“Currently and in the interim of a state government policy, our members have their own rigorous processes in place to ensure full compliance with existing regulations and to achieve high-quality outcomes with the consumer being front of mind.
“This includes working with a host of expert consultants, actively engaging with relevant authorities who will later service the building during the design process and progressive inspections by registered building surveyors throughout the construction process to identify and rectify non-compliances.
“Developers of quality and repute will have stringent processes in place, and we would encourage buyers to discuss this with them to assist in understanding how risks are managed and what the process of rectification would be if any issues were to arise during or following the process of construction.”