Common Class 2 Building Design Mistakes and How to Avoid Them

Common Class 2 Building Design Mistakes and How to Avoid Them

By Franz Phan, Registered Design Practitioner (DBP Act 2020), Senior Planning Consultant — 15+ years experience in NSW residential development

Class 2 buildings — the BCA classification covering multi-unit residential dwellings like apartments and townhouses with shared common areas — are the most regulated building type in NSW. Since the Design and Building Practitioners Act 2020 came into force, every building element in a Class 2 project must be designed, declared, and lodged by registered practitioners. Yet Building Commission NSW's 2025 Strata Defects Research Report found that 53% of Class 2 buildings registered between July 2018 and June 2024 still had serious defects, with waterproofing (22%) and fire safety systems (16%) topping the list.

After 15 years designing and coordinating Class 2 developments across Sydney — from boutique townhouse projects in Inner West LGAs to mid-rise apartment buildings in Western Sydney — I have seen the same design mistakes recur across projects, regardless of the developer's experience or the council's planning department. The financial consequences are severe: rectification costs for waterproofing alone can reach $300,000–$800,000 for a single building, and fire safety non-compliance can delay occupation certificates by months. This article breaks down the seven most common Class 2 design errors I encounter in my practice, explains the regulatory framework behind each one, and provides practical mitigation strategies for developers, builders, and certifiers.

What Are the Most Common Defects in NSW Class 2 Buildings?

The 2025 Strata Defects Research Report, published by Building Commission NSW in April 2026, provides the most authoritative data on defect prevalence in NSW apartment buildings. The survey covered 520 strata schemes managed by professional strata managers, with buildings registered between July 2018 and June 2024 — the cohort most affected by the transition into the DBP Act regulatory framework. The findings are striking in their consistency: the 53% serious defect rate is unchanged from the 2023 research, suggesting that while compliance frameworks have improved defect management processes, prevention at the design stage remains inadequate.

One positive signal: the report notes that buildings registered in 2022–2024 — after the DBP Act took full effect — show lower defect rates than those registered in 2018–2021. This suggests the regulated design declaration framework is working, but the design quality gap has not closed entirely. The most common design mistakes I see in practice map directly to these defect categories, which is why addressing them at the design stage — before construction begins — is the single highest-impact intervention a developer can make.

Mistake 1: Inadequate Waterproofing Design and Specification

Waterproofing remains the most prevalent serious defect in NSW Class 2 buildings, affecting 22% of surveyed buildings. The root cause is rarely the membrane product themselves — it is almost always a design coordination failure. Waterproofing is a "building element" under the DBP Act, which means it requires a regulated design prepared and declared by a registered design practitioner. Yet too often, the waterproofing design is little more than a generic specification note referencing AS 3740, with no project-specific detailing of junctions, penetrations, substrate conditions, or movement joint locations.

In my practice, I have audited Class 2 projects where the waterproofing design consisted of a single A3 drawing with three notes: "waterproof to AS 3740," "refer to membrane manufacturer," and "all penetrations to be sealed." That is not a regulated design — it is a disclaimer. The consequence is that the builder and waterproofing contractor are left to make critical design decisions on site, without the oversight of the design practitioner who declared the design. When those on-site decisions fail — and they frequently do — the defect often does not manifest until 12–24 months after occupation, by which point rectification requires removing finishes, tiles, and sometimes cabinetry.

In one project I was called to remediate — a 14-unit apartment building in Merrylands — the original waterproofing design had no detail for the bathroom floor waste penetration, no specification for the bond breaker at the wall-floor junction, and no requirement for a waterstop at the balcony door threshold. Within 18 months of occupation, seven units had water damage to ceilings below. The rectification cost $380,000 and took four months, during which those units were uninhabitable. A proper regulated waterproofing design would have added perhaps $5,000–$8,000 to the design fee — roughly 2% of the eventual rectification cost.

Mistake 2: Fire Safety System Design Non-Compliance with BCA Section C

Fire safety defects are the second most common category at 16% of buildings. Under the National Construction Code (NCC 2022 Volume One), Class 2 buildings must comply with Section C (Fire Resistance) and Section D (Access and Egress). The most common design errors I see involve fire-resisting construction between sole-occupancy units, fire-stopping at service penetrations through fire-rated walls and slabs, and inadequate specification of fire hazard properties for linings and materials.

These are not obscure code requirements. NCC Volume One Part C2 mandates fire-resisting construction between dwellings in Class 2 buildings, and Part C3 requires protection of openings in fire-resistant elements. The problem is that these requirements interact with structural design, services design, and architectural detailing in ways that a single discipline cannot resolve alone. When the structural engineer designs a slab penetration for a plumbing stack without coordinating with the fire safety engineer, the result is a penetration that may require fire-stopping that was never specified in any regulated design. This is precisely the kind of interface failure the DBP Act's Principal Design Practitioner role was created to prevent.

A particularly costly fire safety design error involves combustible cladding. Project Remediate, the NSW Government's voluntary program to replace flammable cladding on eligible Class 2 buildings, has identified approximately 225 buildings requiring remediation. The program offers 10-year interest-free loans, but as ABC News reported in October 2025, individual owners have faced special levies of $70,000 per unit. The design-stage mistake is specifying cladding systems without verifying fire performance compliance — particularly for buildings over three storeys where the NCC requires non-combustible external wall construction. This is a design decision with financial consequences that can exceed $10,000 per unit decades after construction.

Mistake 3: Skipping the Principal Design Practitioner Coordination Role

The DBP Act introduced the role of Principal Design Practitioner (PDP) specifically to prevent the interface coordination failures that cause most Class 2 defects. The PDP is responsible for ensuring that regulated designs from different practitioners — structural, hydraulic, fire safety, waterproofing, mechanical — are integrated and consistent before building work begins. In practice, this means reviewing each discipline's regulated designs, checking for conflicts at junction points, and ensuring that variations during construction are re-declared and re-lodged.

The most common mistake is treating the PDP role as a nominal title — something the lead architect holds on paper without actually performing the coordination function. I have reviewed projects where the PDP signed the compliance declaration without ever reviewing the hydraulic engineer's regulated design for the waterproofing system. In those projects, the waterproofing design specified a membrane system incompatible with the structural slab's deflection characteristics, and the PDP — who had the architectural drawings showing the slab spans — was the only person who could have identified the conflict. They did not, because the PDP coordination step was treated as a formality rather than a genuine design review.

Mistake 4: Inadequate Acoustic Separation Design Between Units

Acoustic performance is one of the most common sources of strata disputes in NSW Class 2 buildings. The NCC 2022 Volume One requires that walls and floors separating sole-occupancy units in Class 2 buildings achieve a minimum weighted sound reduction index (Rw) as specified in Part F5, with field-tested values meeting the corresponding Rw + Ctr requirements. The most common design error is specifying acoustic assemblies based on laboratory ratings without accounting for flanking transmission paths — the sound that travels around the wall or floor through junctions, penetrations, and continuous structural elements.

In a 22-unit development in Canterbury I was engaged to assess after occupancy complaints, the inter-tenancy walls were specified at Rw 50 using a staggered stud system with two layers of 13mm plasterboard each side and 75mm acoustic insulation. This met the NCC requirement on paper. However, the structural engineer had specified continuous perimeter beams that created a direct flanking path through the wall junction, and the mechanical consultant had not coordinated the ductwork routing to avoid penetrating the acoustic wall. The result was a field-tested performance of Rw 38 — well below the required minimum — and a building-wide rectification involving resilient mounts and acoustic sealants at a cost of $220,000.

The fix is straightforward in principle but requires genuine PDP coordination: the acoustic design must be integrated with the structural, mechanical, and hydraulic designs at the junction level. This means reviewing every wall penetration, every floor junction, and every service route for flanking potential — not just specifying an assembly from a manufacturer's catalogue and declaring it compliant.

Mistake 5: BASIX and NatHERS Compliance Treated as an Afterthought

NSW's BASIX (Building Sustainability Index) requirements apply to all new Class 2 buildings and to alterations and additions exceeding $50,000. Since 1 October 2023, the thermal performance standard increased to 7 stars under the NatHERS accreditation, and the BASIX tool updates of May 2026 introduced the Passive House Standard method as an alternative compliance pathway. Despite these well-publicised changes, I still encounter Class 2 projects where the BASIX certificate is obtained late in the design process — sometimes after the construction certificate has been lodged — treating it as a compliance checkbox rather than a design driver.

The consequences of late BASIX integration include forced redesign of glazing ratios, addition of insulation that was not in the structural design, and specification of mechanical ventilation systems that require coordination with the fire safety design. In one project in Liverpool, a 16-unit development had to reduce its window-to-wall ratio by 18% after a late BASIX assessment showed the original glazing specification would not achieve the 7-star NatHERS rating. The redesign delayed the project by six weeks and required new window procurement at a premium cost. Had the BASIX assessment been conducted at concept design stage — as I recommend in my practice — the glazing specification would have been compliant from the start, with no downstream impact.

For developers planning Class 2 projects, I recommend engaging a BASIX-accredited assessor at concept stage, running preliminary thermal performance modelling before the design development phase, and treating the BASIX certificate as a design input rather than a submission output. The Passive House Standard method now available through the updated BASIX tool offers an alternative for projects targeting high-performance outcomes — but it requires engagement of a certified Passive House designer and PHPP software modelling from the earliest design stages. You can read more about this in our BASIX compliance content.

Mistake 6: Performance Solutions Without Adequate Documentation

Performance solutions — previously known as alternative solutions — are a legitimate pathway for achieving NCC compliance through methods other than the Deemed-to-Satisfy provisions. However, under the DBP Act, a performance solution is explicitly defined as triggering the requirement for a regulated design. The design practitioner preparing a performance solution must document the analysis, modelling, or testing that demonstrates compliance with the relevant Performance Requirements, and this documentation must be declared and lodged on the NSW Planning Portal before building work starts.

The most common mistake is treating a performance solution as a construction-stage workaround — something negotiated with the certifier on site when a Deemed-to-Satisfy detail proves impractical. This is a fundamental misunderstanding of the regulatory framework. Performance solutions require rigorous documentation, including fire engineering briefs, computational fluid dynamics modelling for smoke hazard management, or acoustic testing reports for wall systems. When these are prepared retrospectively after construction has started, the quality of the analysis is inevitably compromised by the pressure to justify decisions that have already been made.

In my practice, I insist that all performance solutions are identified at design development stage, documented in a performance solution report, and reviewed by the PDP before any compliance declaration is made. This adds time to the design phase — typically one to two weeks per performance solution — but it prevents the far more costly scenario of a certifier refusing to issue an occupation certificate because a performance solution lacks adequate supporting documentation.

Mistake 7: Inadequate Design Coordination for Services Penetrations

Services penetrations — the holes drilled through fire-rated walls and slabs for plumbing, electrical, and mechanical services — are one of the most common sources of non-compliance in Class 2 buildings. Each penetration through a fire-resisting element must be protected with a fire-stopping system that has been tested to the relevant AS standard, and this fire-stopping must be specified in a regulated design, not left to the builder's discretion on site.

The design coordination challenge is that services penetrations are determined at the construction documentation stage, after the architectural, structural, and fire safety designs have been declared. If the services engineer designs penetrations without coordinating with the fire safety engineer, the penetrations may not align with fire-stopping systems that were specified in the fire safety regulated design. The PDP is responsible for resolving this interface, but in practice, many PDPs do not review the services penetration drawings because they are produced after the regulated designs have been declared.

The solution is a coordinated services penetration review — a meeting between the services engineer, fire safety engineer, and PDP — before the services drawings are finalised. This review identifies every penetration through a fire-rated element, confirms the fire-stopping specification, and documents the coordination in a revision to the fire safety regulated design. In a 30-unit development in Strathfield, this review identified 47 penetrations that would have been non-compliant had they been installed as initially designed. The cost of the review was approximately $4,000 in consultant fees; the cost of rectifying 47 non-compliant penetrations after installation would have exceeded $120,000.

How Can Developers Avoid These Class 2 Design Mistakes?

The thread running through all seven mistakes is the same: design coordination is treated as a process step rather than a quality function. The DBP Act created the regulatory framework — registered practitioners, regulated designs, compliance declarations, and the PDP role — but the framework only works if the people filling those roles actually perform the coordination and review functions the legislation intended. From my experience across dozens of Class 2 projects, the developers who avoid these mistakes share three characteristics: they engage the PDP early, they budget for genuine design coordination time, and they treat regulated designs as living documents that must be updated when site conditions require variations.

The total cost of these prevention strategies for a typical 15–20 unit Class 2 development is approximately $17,000–$41,000 in additional design fees. Against a typical construction budget of $4–6 million and potential rectification costs of $300,000–$800,000 for a single serious defect, the return on investment is clear. The developers who understand this calculation are the ones whose buildings pass strata defects inspections without findings. The ones who do not are the ones whose buildings appear in the next Building Commission NSW research report.

What Should Strata Managers and Owners Corporations Know?

For existing Class 2 buildings, the DBP Act applies to remedial building work — not just new construction. If an owners corporation commissions waterproofing rectification, cladding remediation, or fire safety upgrades, the work must be designed by a registered design practitioner, declared, and lodged on the NSW Planning Portal. The 2025 Strata Defects Research Report found that 84% of strata managers now say reforms have improved defect management, up from 76% in 2023 — a sign that the regulatory framework is maturing in its application to existing buildings.

Strata managers should ensure that any building work commissioned by the owners corporation is scoped with DBP Act compliance in mind. This means engaging a registered design practitioner for regulated designs, not just a licensed builder, and ensuring that the principal certifier is provided with the declared designs before construction starts. Owners corporations that skip this step — for example, by engaging a waterproofing contractor directly without a regulated design — risk creating a new compliance gap that can affect insurance, resale warranties, and future strata certificate applications.

Frequently Asked Questions

What is the most common defect in NSW Class 2 buildings?

Waterproofing defects are the most common, affecting 22% of Class 2 buildings surveyed in the 2025 Strata Defects Research Report by Building Commission NSW. Fire safety system defects rank second at 16%. Both categories have shown declining rates since the DBP Act took full effect, but they remain the primary design-stage risks for developers.

Who can prepare regulated designs for Class 2 buildings in NSW?

Only a registered design practitioner under the Design and Building Practitioners Act 2020 can prepare and declare regulated designs for Class 2 buildings. Each building element — fire safety, waterproofing, structure, enclosure, building services — requires a practitioner registered in the relevant category. The Principal Design Practitioner coordinates across all disciplines.

What is a Principal Design Practitioner and when do I need one?

The Principal Design Practitioner (PDP) is a registered design practitioner responsible for coordinating all regulated designs on a Class 2 project, ensuring they are integrated and consistent. Every Class 2 project requires a PDP. The PDP reviews designs from all disciplines, checks for interface conflicts, and manages design variations during construction.

Can performance solutions be developed during construction?

Performance solutions can be prepared at any stage, but under the DBP Act they must be documented as regulated designs, declared by a registered design practitioner, and lodged on the NSW Planning Portal before the relevant building work starts. Retrospective performance solutions prepared after construction has begun risk failing certification and delaying occupation certificates.

How does BASIX apply to Class 2 apartment buildings?

BASIX applies to all new Class 2 buildings in NSW, requiring compliance with thermal performance (7-star NatHERS since October 2023), water targets, and energy efficiency standards. The May 2026 BASIX tool updates introduced the Passive House Standard method as an alternative thermal compliance pathway. BASIX assessments should be conducted at concept design stage to avoid costly redesigns later.

What happens if a Class 2 building has serious defects after completion?

Building Commission NSW operates Project Intervene, which addresses serious defects in Class 2 buildings. Owners corporations can report defects, and the Building Commissioner has powers under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 to issue building work orders. The 2025 research found that 36% of buildings with serious defects were reported to the regulator, up from 15% in 2021.

How much does it cost to fix waterproofing defects in a Class 2 building?

Waterproofing rectification in Class 2 buildings typically ranges from $50,000 for isolated bathroom issues to $800,000 for building-wide systemic failures. Costs depend on the number of units affected, access requirements, and whether finishes need replacement. A proper regulated waterproofing design at construction stage would cost $5,000–$12,000 — a fraction of typical rectification costs.

Does the DBP Act apply to remedial work on existing Class 2 buildings?

Yes. The DBP Act applies to both new and existing Class 2 building work. Remedial projects — including waterproofing, cladding replacement, and fire safety upgrades — require regulated designs prepared and declared by registered design practitioners, and lodged on the NSW Planning Portal before work begins. Owners corporations must ensure compliance before commissioning building work.

About the author: Franz Phan is a Registered Design Practitioner under the Design and Building Practitioners Act 2020 (NSW) and Senior Planning Consultant at giantA Pty Ltd, with over 15 years of experience in NSW residential and multi-unit development. giantA is a NSW registered building design practice specialising in Class 2 apartment buildings, duplex developments, and sustainable residential design.

Need expert guidance on your Class 2 development? Contact giantA Pty Ltd at gianta.com.au or call us for a consultation. We provide regulated design services, BASIX certification, and full DBP Act compliance coordination for apartment developments across NSW.

Sources:

• Building Commission NSW, 2025 Strata Defects Research Report (April 2026) — nsw.gov.au
• Design practitioner obligations when working on regulated buildings — nsw.gov.au
• National Construction Code 2022 Volume One (Class 2–9 buildings) — ncc.abcb.gov.au
• Design and Building Practitioners Act 2020 No 7 — legislation.nsw.gov.au
• Project Remediate: Replace flammable cladding — nsw.gov.au
• BASIX Passive House Standard Method — planningportal.nsw.gov.au