Builder and manufacturer trade blows as pipes burst in newly-built homes across Perth

Builder and manufacturer trade blows as pipes burst in newly-built homes across Perth

Major Perth builder BGC is pleading with homeowners affected by bursting pipes not to start legal action as the company grapples with almost seven burst pipe reports a day.

Key points:

Pipes in newly-built Perth homes are bursting at a rate of almost seven per day

Major WA builder BGC says pipes may have to be replaced in almost 12,000 homes in WA

BGC says the manufacturer of the pipes is at fault, maker blames faulty installation

The issue, which first came to light last year, involves a particular polybutylene water pipe manufactured by Iplex, and installed by BGC in almost 12,000 new homes constructed between 2017 and 2022.

Homeowners first began reporting burst pipes and extensive water damage in their kitchens and bathrooms in 2020.

Sam Gray, general manager of strategy and commercial at BGC, told Nadia Mitsopoulos on ABC Radio Perth the company had used Iplex pipes for 20 years, but in 2017 the pipes were changed.

"Back in 2017, Iplex changed an ingredient in the pipe. The ingredient is called a resin and it's basically the core thing that the pipe is made of," Mr Gray said.

"[It was changed] to a resin called TYPLEX-1050 out of Korea, and that is the telltale sign that there is a problem with the pipe."

Mr Gray said BGC began to identify the issues with the pipes in October 2020 after the first burst pipe was reported.

"It took us 18 months to establish the pattern that there was a problem going on beyond just a random burst occurring here and there," he said.

"It's only because BGC is so big and has its own plumbing company … that we've actually been able to join all the dots to establish the pattern, and that there is a problem."

Manufacturer blames installation
Iplex's parent company Fletcher Building hit back at the claims, saying its investigations pointed to faulty installation as the cause of the frequent pipe bursts.

"Our investigation and extensive independent testing points to installation as the cause," the company said in a statement.

"Iplex has continued to work with builders and has undertaken 20 separate testing regimes on more than 875 individual samples which show a categoric correlation between basic plumbing installation failures/mistakes and the location of the plumbing failures which have occurred.

"At this time, the work that Iplex Australia has undertaken or commissioned does not identify a manufacturing defect."

But BGC's claims are backed up by an investigation by the Building and Energy division of the Department of Mines, Industry Regulation and Safety (DMIRS), which concluded, after an inspection of 50 homes, that workmanship was not the cause of the pipe failures.

BGC is in the process of removing the polybutylene water pipes from projects under construction and estimates that the bill for replacing the pipes in all the 11,817 homes the company used it in will come to $700 million, about $60,000 per home.

"You need to rebuild half the home, you're stripping it back to lock-up, which is essentially where you've got a roof on, windows and a door," Mr Gray said.

"It takes six months, and those homeowners have to find somewhere to live, it's an awful situation."

Call for regulator to step in
BGC is hoping that the regulator will issue a product recall of the polybutylene water pipe in question.

"My understanding is that if there's a product recall the onus shifts to Fletchers to enact that recall and to facilitate that process and fund it," he said.

But Mr Gray said the company was urging frustrated homeowners not to launch legal action, saying that could delay the remediation process.

Our advice is, if any party starts litigation, the regulators will step away from a product recall," he said.

"So the ACCC (Australian Competition and Consumer Commission) and WA consumer protection will step away and say, 'guys fight it out in court'.

"The last thing we want is for a six-year legal battle, trying to work out who's at fault, like we had with the lead pipes at the Children's Hospital."

But Trish Blake, WA Commissioner for Consumer Protection, said her agency could still issue a product recall even if litigation commenced.

"Our process around product recall is completely independent of any litigation between the parties … if there is a need for a recall, we would conduct that recall," she said.

She said the agency was now conducting its own investigation as well as speaking to both the builders and manufacturers to see if a voluntary resolution was possible

Ashley Rozze's pipes began to burst 13 months after he moved into his new Perth home, and said the second, third and fourth leaks occurred within the following weeks.

"From that point onwards, we've had sort of two years of living within a building site, essentially, floor coverings ripped up, mould," Mr Rozze said.

"Even up until this week, we discovered a lot of mould during repairs that have happened, and this is from leaks that have happened two years ago.

"The impact from the start to finish is a lot of stress; a lot of worry, a lot of time off work, a lot of lost revenue. The health impacts we just don't know [about]."

It's the second major headache for BGC this year; the company suspended new house orders in April after scores of customers complained that the construction of their homes had ground to a halt amid an overheated housing market.

In September 800 disgruntled customers launched a class action against BGC Housing Group after they experienced long delays and steep price rises in trying to get their houses completed.