Hidden developer penalties raise questions for NSW apartment buyers

NSW apartment buyers have been given a reminder to look beyond display suites, promotional material and star ratings after an investigation found the state’s building watchdog chose not to proactively announce major disciplinary action against a large developer.

ABC News reported on Friday that Building Commission NSW abandoned a draft media release about penalties imposed on Aland’s construction arm and its founder. The disciplinary action was instead recorded on the government’s searchable licensing system, where buyers would need to look for it themselves.

Aland’s construction business was fined $220,000 in April, which the ABC described as the largest penalty imposed by the regulator. Founder Andrew Hrsto was fined $40,000 and required to undertake compliance training to retain his licence.

The breaches included the use of unlicensed contractors and the unauthorised removal of a power pole, overhead wires and street lighting at a St Marys building site. The electrical work cut power to a childcare centre and created a public safety risk, according to the ABC report.

A decision not to publicise the action

Documents obtained by the ABC under freedom-of-information laws showed that officials initially prepared a media release about the disciplinary outcome. Internal communications later shifted to a holding statement that would be supplied only if journalists asked questions.

Building Commission NSW told the ABC it did not routinely publish a media release for every disciplinary matter. It said the action against Aland and its founder was available through Verify NSW.

The ABC noted, however, that the watchdog publicly announced separate action against plumbing businesses during the same period. That contrast raises a broader consumer issue: significant regulatory information may be technically public without being easy for an ordinary buyer to discover.

Aland told the ABC it had worked with the regulator to strengthen its processes and remained committed to improving its standards. It also pointed to its gold-star iCIRT rating.

Ratings and regulatory records answer different questions

iCIRT is an independent rating system operated by Equifax and supported by the NSW Government. It assesses participating builders and developers across areas including capability, conduct, character, financial capacity and counterparties. Only businesses rated at least three gold stars appear on the public registry.

A rating can be a useful part of due diligence, particularly for an off-the-plan purchase where the finished home cannot yet be inspected. It should not be treated as a substitute for checking licences, disciplinary decisions, building work orders, court proceedings and the history of the specific project team.

Ratings can also reflect a broad assessment of a business at a point in time, while regulatory records describe particular incidents or findings. Buyers need both types of information to form a more complete picture.

The practical concern is especially important where a developer, builder and sales brand use related but differently named companies. A buyer should identify the legal entities named in the contract and search those names, not only the brand displayed in advertisements.

Due diligence before buying an apartment

For an established strata property, the NSW Government recommends considering the reputation of the developer, builder and strata manager. Buyers should also arrange a professional strata records inspection covering defects, insurance, levies, legal disputes, maintenance plans and building reports.

Off-the-plan buyers should obtain independent legal advice before paying money or signing documents. NSW Fair Trading says the contract should include a disclosure statement, draft plan, proposed finishes and draft by-laws. Material changes can trigger time-limited rights, making it important to send every notice to a solicitor or conveyancer promptly.

Useful checks include:

• searching the licences and disciplinary history of the developer and builder
• checking the Building Commission NSW work order registers
• reviewing the iCIRT registry while understanding what the rating covers
• identifying the exact corporate entities responsible for development and construction
• asking whether any defects, stop-work orders or regulatory investigations affect the project
• having marketing claims and unusual incentives confirmed in the written contract.

No single search can eliminate construction risk. The aim is to identify warning signs early and avoid making a high-value decision based solely on a sales presentation.

What it means for you

• Search official licensing and disciplinary records even when a developer has a strong rating.
• Check the legal company names in the contract, not just the project’s public brand.
• For strata purchases, commission an independent review of building and owners corporation records.
• Treat ratings, insurance, regulatory history and contract advice as separate parts of due diligence.