Fifty-three per cent of NSW strata buildings registered between 2016 and 2022 have had a serious defect in common property, up from 39 per cent in the previous survey, according to Building Commission NSW’s own research.
Those figures get read as a construction problem. They are an operating one too, because a tower run reactively is a tower where nobody catches the small version of the defect while it is still small and still someone else’s liability. Poor building management services rarely announce themselves. They turn up three years later as a special levy.
Here is what reactive facilities management costs the owner of a Sydney, Melbourne or Brisbane high-rise, and where that money goes.
Reactive is not cheaper
The pitch for a low-cost contract is simple: fix things when they break, do not pay for inspections that find nothing.
Here is what that misses. A failure attended at 2am on a Sunday is billed at penalty rates, by whoever answers the phone rather than whoever knows the plant, and usually with a temporary fix because the part is not on the truck.
Then there is the collateral damage. A pump seal that weeps for six months does not stay a pump seal problem. It becomes a corroded slab, a mould claim in the apartment below, and a plant room that fails its next inspection. The mechanism is always the same: water gets somewhere it should not be, and the cost of removing it scales with time.
The expensive part is not the repair. It is the eleven months of quiet compounding before anyone looked.
There is also a hard deadline most owners miss. Defect liability and statutory warranty periods run out. Where a reactive provider writes “attended, monitoring” on a report, a proactive one issues a dated defect notice while the builder is still on the hook. Once that window closes, the same money leaves the sinking fund instead. Our construction and defects management team sees this constantly: the evidence existed, but nobody documented it in time.
The compliance bill nobody budgets for
Essential services compliance is where reactive high rise building management stops being a maintenance question and becomes a legal one.
In NSW, the owner of a building with essential fire safety measures must give council an annual fire safety statement under the Environmental Planning and Assessment (Development Certification and Fire Safety) Regulation 2021. Miss it and the penalty notices are weekly and escalating, with many councils issuing around $1,000 for the first week and more for each week after. Keep missing it and the matter can reach the Land and Environment Court.
NSW is not the only state chasing this paperwork. Victorian owners corporations carry an equivalent obligation through the Annual Essential Safety Measures Report under the Building Act 1993, and Queensland building owners lodge an Annual Occupier’s Statement covering their fire safety installations. Different forms, different regulators, same principle: a lapsed or failed measure sits on the public record until someone fixes it and signs it off.
The fine is rarely the real cost. Statements are usually late because something failed its test and has not been rectified, which means the building has been sitting with a documented fire safety deficiency for weeks. That is the paperwork an insurer asks for after a claim.
Energy: the largest controllable cost, and the one reactive FM never touches
Common property energy runs the lifts, the car park exhaust, the pumps and the chillers. It is usually the biggest controllable line in an administration fund, and a reactive contract has no mechanism to reduce it, because reducing it means measuring it first.
A car park fan running at full duty because a CO sensor drifted will never generate a work order. Nothing is broken. The bill simply arrives higher, quarter after quarter, and gets paid.
Across the National FM Group portfolio, metering and optimisation work has delivered a 32 per cent average cut in energy use, an average payback of 1.2 years, 850 tonnes of CO2 abated annually and $1.1 million in annual client savings, detailed on our Smarts and Sustainability page. None of it is available to a building measured only when something stops working.
In BTR and premium residential, the cost shows up as churn
Australia’s build-to-rent pipeline reached 51,000 apartments worth $40.1 billion in early 2026 on BDO research reported by the Property Council, with NSW now the leading growth market.
BTR economics are unforgiving in a way strata economics are not. Revenue depends on occupancy and renewal, so a lift out of service for nine days, a gym that smells, or an intercom that takes a fortnight to fix are not maintenance issues. They are vacancy risk. Every departing resident costs advertising, re-letting time, an incentive and empty days, and the review they leave on the way out prices the next twenty enquiries.
Reactive build-to-rent facilities management is the most expensive way to run an income-producing residential asset, because that asset is judged daily by the people living in it.
What asset owners are leaving on the table
A reactive arrangement quietly costs a premium tower:
- After-hours premiums on work that could have been scheduled
- Consequential damage a planned inspection would have prevented
- Defect claims lost to expired liability periods
- Energy overspend that is never measured, so never questioned
- Compliance penalties and harder insurance renewals
- Occupancy and renewal revenue in BTR and PBSA assets
- Capital replacement brought forward, because neglected plant never reaches its design life
None of these appear as a line item called “poor FM”. They appear as a larger budget every year, and everyone gets used to it.
What good high rise management services do differently
They employ their own people. At National FM, building managers and technicians are directly employed rather than subcontracted, which is why the person on site next year is the one who knows why that chiller trips in February.
They run the building from data, so live dashboards and condition monitoring turn a 10-year CAPEX forecast into a real replacement plan rather than a depreciation table.
And more than 40 years of high rise facilities management across Sydney, Melbourne and Brisbane is mostly a long catalogue of what goes wrong, and how early it can be caught.
The question worth asking this quarter
Ask your current provider for three things: last quarter’s common property energy use by end use, the status of every measure on your fire safety schedule, and the planned versus reactive spend split for the past twelve months.
If the answers arrive as a folder of invoices, you already have your assessment.
Good building management services tell you what your building will cost in three years, not just what it cost last month. If you are a developer, owner or committee in Sydney, Melbourne or Brisbane reviewing your arrangements, contact us. No obligation, and we will tell you if the answer is to fix your metering first.