In business and politics, the end of year holiday season when everyone is distracted by family and fun is notoriously a good time to bring out your dead.  And that’s exactly what two high profile apartment construction companies did in the dying day and weeks of 2020.

A company related to Icon Co, the builder of Opal Towers, filed for winding up in November 2020 and revealed recently it was being chased by the strata owners of no less than 7 developments around Sydney. Carrie Fellner and Nigel Gladstone of The Sydney Morning Herald reported on 29 December 2020 that the company leaves apartment owners fearing an alleged $30M in defects. A spokesperson for the administrator said according to the press report, that given the increasing number of warranty and defects claims, the appetite of the parent companies for continuing to provide funds for defects has diminished, and eventually ceased altogether.

In another blow for strata owners a company related to Ganellen construction group went into liquidation just days before Christmas and mid litigation over defects worth more than $1M. 

It’s likely with the spate of defective buildings still dealing with their defect claims that more builders will wind up their companies leaving strata owners out of pocket.

As a result of new laws in NSW at least some owners may have retrospective claims against others involved in the design and supply of products to buildings. But these cases are much harder to win than a straight-out defect claim against a builder.

These recent cases make the point that apartment purchasers must look beyond the reputation of the builder to the designers and suppliers of the major building products to make sure they are dealing with reputable suppliers.