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'No effective oversight': why the Opal and Mascot Towers cases may be the tip of a very large iceberg

The Mascot Towers crisis is the second seismic shock delivered to the Sydney high-rise residential market in just six months, following the emergency evacuation of residents from the Opal Towers at Homebush on Christmas Eve. The Mascot Towers crisis is the second seismic shock delivered to the Sydney high-rise residential market in just six months, following the emergency evacuation of residents from the Opal Towers at Homebush on Christmas Eve. Residents from 156 of those 392 apartments are still not back in their homes, though builder Icon says it hopes to have repairs completed by next month. Owners Corporation Network spokesman Stephen Goddard says Mascot Towers owners have "only themselves upon whom they can rely”. For some, the only avenue of escape may be personal bankruptcy “ because they can’t afford the mortgage repayments or the special levies”. How, Goddard wonders, can the “aspiration of owning your own home go so terribly wrong, that the outcome could be bankruptcy [because] of the absence of consumer protection?”  
Sydney Morning Herald
Deborah Snow Megan Gorrey & Laura Chung

Mascot Towers resident angry over restricted access to strata meeting amid cracks in building

A resident evacuated from a Sydney apartment complex is angry over what they say is an attempt to block them from bringing supporters and legal representatives to tonight's owners' meeting. One Mascot Towers apartment owner, who did not want to be identified, said she asked a colleague who is a lawyer to accompany her to the meeting, only to find out he was not welcome. On Tuesday, she received an email from building management, who wrote that the meeting was "intended for owners in Mascot Towers and a strict identification registration process will be enforced". "Only owners recorded on the strata roll will be permitted to enter and participate in the meeting's proceedings." Stephen Goddard, spokesperson for the Owners Corporation Network — an owners' advocacy group — described the email outlining restrictions on attendance as surprising. "I consider that to be very foolish and lacking in transparency and disrespectful of members in the scheme," he said. Mr Goddard said only owners could participate and vote at the meeting, but there was nothing in the strata legislation restricting others from attending. "I understand the strata committee might be fearful of media penetration and troublemakers, but to deny people assistance and appear to be not transparent is a further breach of trust the building cannot afford," he said.      
ABC News
Ursula Malone

The statistic that could make you think twice about buying in a high-rise

Building defects in the Opal Tower and Mascot Towers have cost residents financially and emotionally, but the Grenfell Tower disaster in London cost dozens of people their lives. However, a new report from Deakin University has revealed 97 per cent of apartment buildings in New South Wales, and 85 per cent across Australia have some form of structural defect. It follows studies by the University of New South Wales’ City Futures Research Centre which found 85 per cent of high-rise buildings in NSW built since 2000 have had some form of defects. Fabric and cladding defects were the most prevalent, followed by fire protection, waterproofing, roof and rainwater disposal and structural issues, lead researcher and senior lecturer at Deakin Business School, Dr Nicole Johnston said today. Speaking to Yahoo Finance, the executive officer of the Owners Corporation Network, Karen Stiles said this situation isn’t helped by a culture of silence. She described the NSW apartment landscape as one undergoing a “very quiet haemorrhaging”. “People have [had] to move out for extended periods of time or are forced to live through a reconstruction and all of the emotional and financial and physical impacts that go with that,” she said.  
Yahoo Finance
Lucy Dean

Calls for change as apartment owners forced to foot the bill to save unsteady building

A controversy has erupted in Sydney where residents evacuated from the cracked Mascot Towers have been left homeless and told they'll have to foot the repair bill. Building defects in NSW are covered under manufacturer warranty for six years after construction.  Following this, the burden of paying for all repairs falls to the owners. A controversy has erupted in Sydney where residents evacuated from the cracked Mascot Towers have been left homeless and told they'll have to foot the repair bill. Building defects in NSW are covered under manufacturer warranty for six years after construction. Following this, the burden of paying for all repairs falls to the owners. Mascot Towers was vacated on Friday night after engineers became increasingly concerned about cracks in the primary support structure and facade masonry. Those who own their apartments in the decade-old building will now be faced with a hefty bill, likely paid for with compulsory strata levies. Owner’s rights advocate Stephen Goddard told Sunrise that 80 per cent of all new residential strata constructed in NSW, Victoria and Queensland have defects. He wants to see more protections put in place for home owners. "These people are part of an enormous victim pool. There has been a conspiracy of silence around this," he said. "People have been their buildings quietly to try and protect their capital values, but Opal and Mascot are such significant threats to structural and life safety that there is no secret." Meanwhile, the Owners Corporation and building manager will write to Premier Gladys Berejiklian to plead for “emergency assistance" for those left without anywhere to live while repairs take place.  
Sunrise
Digital Staff

Sydney's dirty strata secrets emerge through cracks in Mascot Towers

The masonry at Mascot Towers isn't the only thing cracking in Sydney this week. The entire edifice of silence and self-interest which has encouraged government and the market to turn a blind eye to the true extent of building defects in new strata developments is crumbling. For 20 years, new residential strata schemes have been plagued with building defects. According to one estimate, 80 per cent of all new residential strata schemes are constructed with defects. Yet the government response has been to shrink consumer protections. Statutory warranties have decreased as has access to home building insurance.  
Sydney Morning Herald
Stephen Goddard

Mascot Towers unit owners to foot bill for repairs prompting calls for better consumer protections

Owners of apartments in the Mascot Towers development will be left with a hefty bill to repair structural damage as the building is too old to fall under warranty, with property experts calling for better consumer protections. Residents were forced to evacuate the 10-storey Sydney building on Friday night after major cracks appeared in its beams. Temporary building props were installed in the carpark earlier in the week due to the "rapid deterioration" of cracks within a primary support beam, residents were told. Under NSW law, building defects are covered under warranty for six years after completion of a development. Stephen Goddard, spokesman for the Owners Corporation Network — an advocacy group for owners in strata schemes — said owners of apartments in the decade-old Mascot Towers development were no longer covered by the statutory warranty period and would now be left with a hefty bill. "Consumers have nowhere to go in these sorts of situations, there's nobody for them to sue, there's nowhere for them to turn," Mr Goddard said.              
ABC News
Bellinda Kontominas & Antonette Collins

Buyer interest plummets as Sydney’s failing high-rises trigger headlines

Sydney residents were evacuated from their Mascot Towers homes in June after cracks appeared in their walls, in an incident that echoed Christmas Eve’s Opal Tower evacuation in Sydney’s Olympic Park area. The images of confused residents milling outside the troubled towers with pets and belongings in their arms have come to represent New South Wales’ high-rise housing crisis. Nearly all (97 per cent) of new high-rise apartment buildings in NSW have some form of structural defect, a report from Deakin University released in June found. It’s a situation executive officer of the Owners Corporation Network Karen Stiles described as a “quiet haemorrhaging”.
Yahoo Finance
Lucy Dean

Apartment owners worried they are living in structurally unsound buildings

The quality of new apartment buildings has been in the spotlight since residents of Mascot Towers in Sydney were forced to evacuate more than a week ago. It follows on from the emergency evacuation of the 3,000 residents of Opal Towers late last year after beams collapsed. Nicole Johnston from Deakin University has just released a report into building safety. She says that would-be owners often have no way of knowing if there are structural problems with their apartments. "Sometimes it doesn't matter how much due diligence you do, you won't know that these defects are coming," she said. Her report found poor waterproofing, unsafe cladding and fire risks were the most common problems. "The costs involved in going through those rectification works is so much more than it would have been if the job was done right in the first place," Dr Johnston said. "So the costs in relation to rectify the fix is exorbitant, and it's grossly unfair for the people having to pay." Key points: Apartment owners around Australia say they are being left to foot the bill for poor-quality construction John Grant's apartment building in Canberra has a defect bill estimated at $9 million Melbourne apartment owner Andy White says the Government needs to step in It follows on from the emergency evacuation of the 3,000 residents of Opal Towers late last year after beams collapsed.
ABC 7.30 Report
Julia Holman

Minister defends city's high-rise housing

The Minister for Better Regulation has denied there are widespread problems in the city's high-rise residential housing sector, saying “I don’t believe there is any great cause for alarm for other apartment buildings across Sydney". Announcing an emergency financial assistance package for residents of the beleaguered Mascot Towers block on Sunday, Minister Kevin Anderson said the NSW government would restore "confidence" with “the biggest shake-up of the construction industry that this state has ever seen”. He said this would start with the creation of a building commissioner to “look at accountability, transparency and the quality of buildings that will be going up in the future”. However, a spokesman for the Owners Corporation Network, Stephen Goddard, said he did not share Mr Anderson's sanguine view. He told the Herald that studies had indicated a high proportion of all new residential strata were prone to defects, mainly in the areas of water penetration, fire safety and flawed facades.  
The Sydney Morning Herald
Deborah Snow

Experts warn of more major building defects to follow Mascot Towers drama

Just six months after Sydney’s Opal Tower was dramatically evacuated, another Sydney high-rise has been hit by potentially devastating cracks. And experts say the nightmare facing residents of Mascot Towers won’t be the last. According to Owners Corporation Network spokesman Stephen Goddard, these incidents could be just the tip of the iceberg. He said the problem was probably far greater than most people realised because many owners within faulty buildings did not want that information to be made public, as they feared being “stigmatised like Mascot and Opal”, which would cause their building “to become toxic” — and lose value.
News.com.au
Alexis Carey

Owners in some Melbourne CBD, Docklands apartment towers face resale, lease issues

Owners in Melbourne’s high-rise apartment towers are selling properties at a loss amid a tarnished reputation thanks to wild parties and crime. Some city and Docklands buildings are tarnished thanks to the sheer volume of short-stay apartments and what happens there, such as the confronting death of Laa Chol, 17, who was killed at a party in an Airbnb apartment in the EQ tower in the CBD. Landlords and vendors in the tower have been forced to reduce rents to lease properties in some cases, and vendors in the past 12 months have often sold at a loss.  The Neo 200 building in Spencer Street has faced similar problems of failure to rent and slipping prices. It had a reputation for hosting short-stay tenants and also caught fire earlier this year.
Domain
Jim Malo

Buck-passing on apartment building safety leaves residents at risk

Hundreds of residents in a Sydney apartment complex, the 122-unit Mascot Towers, were evacuated last Sunday when cracks began to appear due to a serious structural failure. And it isn’t clear when the residents can return. This crisis echoes the structural failure at Opal Tower and its evacuation on Christmas Eve last year. We have seen a series of serious building failures and fires in recent years. And state and federal governments have had more than year to act on recommendations for better construction regulations, but instead they’re shifting blame. Although each building failure was different, the end result is the same: misery for the residents and a looming financial disaster for the owners. It’s difficult to estimate the total bill for remedial works to all apartment buildings built over the last 25 years, but it may well exceed the Productivity Commission estimates of savings resulting from the introduction of the National Construction Code. All governments must take an active role in fixing the defective regulatory regime they have created. If they can’t get on with this process in a timely way, we will need yet another royal commission to sort it out.
The Conversation
Geoff Hanmer

Buying a new high-rise apartment is a risk best avoided

I write this piece as one of the lucky apartment owners. Lucky not because I managed to break into the apartment market, but because I survived it financially intact.The predicament facing Opal Tower and Mascot Towers apartment owners is only the visible tip of a very big iceberg. So my advice to my kids today, and anyone who'll listen, is this: do not buy a new apartment, especially if it is over three stories high. This mess has been with us now for many years as ever bigger apartment buildings have been pumped out to meet demand in rapidly growing cities. Quantity has trumped quality and the needs of the consumer. The poor companies are low-cost, low-standard outfits. The good companies have to compete with this and it tends to be a race to the bottom. As one builder told me candidly, "if they buy rubbish, we will build rubbish". Governments appear to have been looking the other way, too. Review after review has raised issues with the regulation of the industry. Confidence in new apartment offerings has been shattered at the very time that builders and developers are facing a downturn. While I feel for the good companies, and I am sure there are some, the industry's neglect of the end consumer will probably hurt them all. The failure of apartment living to work is a disaster for the wider community too. How do we meet the housing needs of the future if people shy away from apartment living? What are the economic consequences of a collapse in the demand for new apartments? Effective public policy initiatives, including effective consumer protection for apartment owners, are economic imperatives. In the meantime, if you are tempted to buy a new apartment over three levels, don't.
ABC News
Phil Gall

Cracked up: how can apartment buyers guard against a defective purchase?

With faults and cracks discovered over the weekend in Sydney’s Mascot Towers apartment complex – and similar cracks in Opal Tower six months ago – the spotlight is back on the quality of New South Wales apartment buildings. Research from the University of NSW in 2015 found that 85% of new apartment buildings had defects at completion – mostly with waterproofing and fire detection systems – and the certification system had “broken down”. Philip Gall, the chairman of the Owners Corporation Network, says the current warranty is too short and too imprecise. “What often happens is the builder or developer, to avoid their warranty obligations, wind up the companies,” he says. “Then there is nobody for the owners to pursue for defects. “And there is always an argument as to what a ‘defect’ is.  You’d be able to do that with a fridge but you can’t do that with an apartment. That is just appalling.”
The Guardian
Naaman Zhou

‘Daunting’ reality for strata lot owners after Mascot Towers evacuation

Strata lot owners could have to pay for building repairs after the Mascot Towers residents were evacuated. Owners Corporation Network President Gary Petherbridge tells Ross Greenwood the problem is systemic.  “People shouldn’t be buying off the plan anymore, you’re better off to wait 10 years until the property is sorted out.”
Money News with Ross Greenwood
Ross Greenwood