News | Owners Corporation Network


How to avoid buying a dodgy apartment

With state planning ministers meeting this month, informed in part by a behind-closed-doors meeting of development “stakeholders” in NSW last week, you can be sure that building defects in their myriad forms will be on their agenda. From the crumbling Opal and Mascot towers in Sydney to the estimated thousands of apartment blocks across the land that are clad in deadly flammable composite, there will be plenty to talk about. But the problem may be even worse than we thought. As was revealed in a Sydney Morning Herald story last week, millions of dollars in defects claims are quietly being settled out of court. But that only works if there is someone there to sue. If the developer, like Monty Python’s parrot, has ceased to exist, then the apartment owners can be left high and dry. Leading strata lawyer Stephen Goddard, who is also spokesman for the Owners Corporation Network, the peak body for strata owners, is in no doubt what the main issues are. He says, in broad terms, it’s the lack of a duty of care. Under current law, builders have no responsibility to the purchasers of apartments – their responsibility begins and ends with the developer. If that developer has gone into voluntary liquidation (often to “phoenix” into a new entity) there is no one there to sue or settle with. This is such a massive hole in consumer law that it represents part of the business plan of many small, self-styled developers and get-rich-quick schemes. Goddard believes the largely unregulated development industry – anyone can call themselves a developer – needs proper certification … and fast.
The Australian Financial Review
Jimmy Thomson

Zetland apartments abandoned in secret evacuation over 'severe' defects

An inner Sydney apartment building remains abandoned eight months after its occupants were evacuated over water and fire safety defects, in revelations expected to deliver a fresh blow to confidence in the city's building standards. The emergence of a third residential unit building with severe defects will intensify pressure on the state government to address concerns about building standards. Cracking forced the evacuation of Sydney Olympic Park's Opal Tower on Christmas Eve and the Mascot Towers on Bourke Street last month. Less than a month ago, the minister responsible for the building industry, Kevin Anderson, said there was no "great cause for alarm" about building quality with no need to rush into reforms. Owners Corporation Network spokesperson Stephen Goddard said there has been a "conspiracy of silence" around building defects for years due to confidential legal settlements and owners' fears of damage to property values.
The Sydney Morning Herald
Carrie Fellner Laura Chung Jacob Saulwick

'It hasn't worked': Premier admits Sydney's building industry is failing

Premier Gladys Berejiklian says the system of regulation in the building industry is not working, after the Herald revealed the evacuation of a third apartment building in Sydney. As the state opposition called for an immediate response to the growing number of building defects emerging in the city, Ms Berejiklian said she wanted to "assure the community that we know there's a problem. "We know there's a gap in legislation," she said. "We allowed the industry to self-regulate and it hasn't worked. There are too many challenges, too many problems, and that's why the government's willing to legislate." One of the reforms proposed by the Berejiklian government is the creation of a "building commissioner" position, which would have power to investigate construction sites. Ms McKay called for that role to be established immediately, and described the situation as a "ticking time bomb". "I think we will have more and more of these buildings come to light," she said. "Right now we have no building commissioner in place because this government won't release the details. "If you are serious ... then tell us about the building commissioner. Put that commissioner in place right now, ensure they are resourced, and ensure they have the power to be there."
The Sydney Morning Herald
Jacob Saulwick Megan Gorrey and Lisa Visentin

Danger Sydney apartment defects revealed in Zetland block

A third Sydney apartment block is under scrutiny over building and safety issues after it was revealed its residents were evacuated last year. Residents from the 30 loft-style apartments at 19 Gadigal Avenue in Zetland, in Sydney's southwest were evacuated late last year, while City of Sydney staff had inspected the building in February and found it had "extensive and severe water damage", a city spokesman said.   Stephen Goddard from the Owners Corporation Network also told 9News he was distressed after people were made homeless by the defects. "We have lived with building defects for the last 20 years, but we're now having structural defects that are a threat to live (with) safely - causing people to evacuate," he said. "(There is) no silver bullet solution - there's no 20-minute solution to this story."
9 News

How cost-cutting makes buildings fail

Waterproofing isn't unique. In a cut-throat construction industry where price trumps everything and every player in a cascading hierarchy of relationships is trying to minimise costs, there's relentless pressure on lower-order players to accept less. "There is this practice of subcontractor shopping," said industry veteran John Murray.  "A contractor will seek prices from subcontractors and then go to the lowest subcontractor - or even its preferred subcontractor who may not have the lowest price - and ask it to further shave its price." The consequences of all the cost-cutting and resulting shortcuts are now all too visible as state governments prepare themselves to pay hundreds of millions - some estimate billions - of dollars to rectify the buildings built carelessly, with combustible cladding that fails to meet building code standards or defects such as cracking.
The Australian Financial Review
Michael Bleby

Mascot Towers incident: Negative stigma could impact unit prices in troubled building

Unfortunate owners in the Mascot Towers complex could see up to 40 per cent of their affected units’ value wiped away due to negative stigma attached to the building. In scenes similar to what happened with the Opal Tower in Sydney Olympic Park, residents were evacuated on Friday night and structural support added to the building in Mascot after it was noticed that cracks in the building were getting wider. “Consumers have nowhere to go in these sorts of situations, there’s nobody for them to sue, there’s nowhere for them to turn,” Stephen Goddard, a spokesperson for the Owners Corporation Network, told the ABC. “Anybody looking to purchase in a building less than 10 years of age is foolish because the defects will not have yet surfaced. “People have more consumer protection buying a fridge than a million-dollar apartment.” Apartment owners within the building will now need to pay for repairs, likely through increased strata levies. Of the 392 units in the Opal Tower building, 155 of them are still unable to be reoccupied six months after it was evacuated on Christmas Eve last year. “We’re now seeing owners confronted with the possibility that their investment … may be lower than their outstanding mortgage,” Mr Goddard added.

‘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. Engineers evacuated the building after they became concerned about cracks in the walls of the 10-year-old apartment complex. Apartment owners will reportedly have to foot the bill for repairs as the building is too old to come under warranty protection. 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.”  
Ross Greenwood

Boycott: Is it time we had an off-the-plan ban?

The advice from Owners Corporation Network spokesman Stephen Goddard could not have been more blunt: Don’t buy apartments off the plan. His actual words in an opinion piece in the Sydney Morning Herald (Sydney's dirty strata secrets emerge through cracks in Mascot Towers -See post below for full story) were “prudent purchasers cannot buy strata ‘off the plan’ or, given that most defects emerge within a decade of construction, any residential strata building less than 10 years of age.” Mr Goddard, a strata lawyer and veteran of many a unit block battle against dodgy developers, has a point, notwithstanding the fact that the Mascot Tower that started falling apart a couple of weekends ago is actually 11 years old. All that shows is that even extreme caution will not protect you if you put your money into the wrong chunk of concrete and glass. The OCN and this website and newspaper column have been making those sorts of noises for years, largely ignored or dismissed by a conga line of training-wheel Fair Trading ministers, some of whom have in the past seemed more concerned about the party donations (rather than guarantees) that they could extract from developers. Their consistent failure to impose any sort of quality control on developers and builders have led us into a situation where we are simply waiting for the next brick to fall.  The one thing on which all observers agree is that Opal and Mascot Towers are not the last examples of government and corporate failure that we will see.
Flat Chat
Jimmy Thompson

Aussie state government steps in to help stranded Sydney residents after building foundation cracks

SYDNEY, June 24 (Xinhua) -- Residents of Sydney's Mascot Towers, which were evacuated earlier this month due to suspected structural damage, will receive financial support from the New South Wales State Government to cover the costs of temporary accommodation. State government officials said on Sunday that residents of the around 10-year-old building will be able to apply for the costs of daily accommodation for a period up to three months. Owners Corporation Network chairperson and strata solicitor, Stephen Goddard told Xinhua that he welcomed the government stepping in to address the immediate needs of residents. "The people who were removed from Mascot Towers nine days ago left without even a toothbrush and they have only been allowed to go back to get some personal effects yesterday," Goddard said. Both renters and owner occupiers are eligible for the payments which are capped at 152 U.S. dollars per night for one bedroom apartments, 208 U.S. dollars for two bedrooms and 277 U.S. dollars for three bedroom dwellings. "Ultimately, we've got to do the right thing by them, they've been in a terrible situation," Minister for Better Regulation and Innovation Kevin Anderson told reporters outside Mascot Towers. Both Anderson and Goddard agreed that the construction process in Sydney is in need of reform and will meet later in the week to discuss the issue. "None of us know how many buildings are out there like Mascot - there could be more," Goddard said. "We've been living in a community where the building industry has been operating literally unsupervised. The focus now must be how to prevent these buildings from continuing," Goddard said.
Xinhua Net
Li Xia

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 Opal Tower, which was evacuated on Christmas Eve because of cracking in parts of the concrete structure, had been a “turning point” Mr Goddard said. “If Opal was a turning point, Mascot [Towers] must be a last straw, and that does not mean there are no more straws left,” he said.      
Sydney Morning Herald
Deborah Snow

Mascot Tower owners crowdfunds to raise $1m

Sydney Mascot Tower owners have started crowdfunding to raise money after an owners' meeting on Thursday elected to raise a special levy of $1.1 million to fix the defective building. The Owners Corporation Network agrees it is time for governments to look at better consumer protections for homebuyers. Strata management also needs another look-in while homebuyers, particularly the growing number of apartment owners, need to continue take an active interest in the upkeep of their building. "As people take possession of their shiny new homes or investments at the end of the building boom they should budget for more than mortgage repayments," Owners Corporation Network Karen Stiles said. "All but a lucky few new apartment owners will face additional levies to deal with the inevitable building inspections, drawn out disputes with builder, the possible liquidation of the builder." "This is happening every day but, until two recent emergency evacuations, owners and tenants have suffered in a terrible conspiracy of silence. It's time for governments to act to protect its citizens."
Financial Review
Su-Lin Tan

'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

What Members Say

"The whole strata community owes a huge debt of gratitude to you and the OCN executive. Much appreciated."

Robert, Darlinghurst

"I am very pleased with my membership of OCN, the discussions through sharing emails is very valuable in increasing my knowledge of strata living, the laws and EC responsibilities. I think I am better armed to tread the minefield of the managing agent responsibilities and the necessary action of the EC to monitor the contradictory interests of the agent."

Jim, Wollstonecraft

"I so appreciate being part of the OCN email forum. It provides a great opportunity for sharing ideas and learning"

Ingrid, Neutral Bay

"I must say that I have enjoyed and found consolation in the discussions that have been part of the email chain (forum). I did attend one general meeting and found that it was informative and the people "running the show" were knowledgeable and dedicated to the tasks that had taken on. In short, well done. You and the committee have and continue to support the Strata Community in a very professional manner."

Greg, Parramatta

"Nothing is easy in Strata World and we have been in building defects “mode” for some years – hopefully almost at an end but that process has been most demanding and difficult but again – greatly helped by the experience and wise counsel of other members of OCN."

Pat, St Leonards

"Keep up the good work, as many (if not most) strata schemes need your help, advice and representation at all levels of government."

Jann and John, St Ives

"I belong to OCN because of its professionalism.  I have found the meetings I have been to extremely well presented, to the point, and of course very topical and informative. Speakers on the whole certainly know their topic.  My role of Secretary last year was certainly assisted with the coverage regarding TPG & other subjects. Member newsletters are also of benefit as the topics are specific to strata matters."

Graham, East Balmain

I have enjoyed attending the quarterly OCN meetings and the exchange of emails between other Executive Committee Members and think OCN is playing an increasingly important role as a voice for strata dwellers and representing us at Government level. I wish the organisation continuing success in the future."

Pauline, Kings Cross

"The [forum] response to my question was amazing and really useful.  The OCN community is wonderful so thanks."

Jenny, Killara

"I would like to thank you all for the important effort that you are all putting in to look after apartment owners and tenants. It is so valuable and you are heroes. I would not have been able to deal with my duties as a strata chairman without your advice and assistance." 

Angela, Mascot

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Bill, Surry Hills

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Sue, Neutral Bay

"Thanks to all at OCN for your continuing efforts to keep us up to date with current strata information and has been very helpful to us"

Kate, Coogee

"When my wife & I first encountered a problematic Executive Committee I heard that OCN was a great help (from a Strata manager whom I knew) so we both joined and have gratefully used the on-line information sources. We continued to happily rely on OCN’s assistance when we progressed to Committee status & later as Chair & Secretary of our Committee. I still use OCN in my current role as Treasurer."

Peter, Chiswick

"Thanks to OCN for being such a rich resource of trustworthy information about strata matters."

Peter, Chiswick

"I wanted to extend my personal thanks for the very informative & interesting event today. The OCN team did an outstanding job in the organisation of this event & I enjoyed it thoroughly. The quality of speakers, the flow of conversation & interaction from the attendees - first class …& of course, the amazing Jimmy T - always a delight."

Sue, Epping

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Lois, Wollongong

"I am sure my appreciation of your good works is echoed by many in the Stratasphere. Keep up the good work."

John, Elizabeth Bay

"Once again, being able to discuss such things through this forum, helps clear the mind, puts things into perspective and helps one to understand their rights and to form a strategy if needs be. As a simple EC member trying to do what is in the best interests of lot owners, I truly value OCN and am grateful."

Pamela, Point Lookout

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Alan, Maryville