GENERAL PROPERTY

Mascot Towers owners to foot bill for defects, off-the-plan buyer beware

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OWNERS of Sydney’s Mascot Towers will wear the costs of repairing the building after cracks were discovered, coming six months after the Opal Tower incident, prompting advocates to warn buyers against buying off-the-plan apartments.

The building was evacuated on Friday night after cracks were discovered in the primary support structure. The building’s management said on Monday that the building’s insurance policy for temporary accommodation has been rejected and told residents to go to the Salvation Army to seek financial hardship assistance.

Residents were also told they are responsible for the costs for the structural repairs because it was built in 2008 and the warranty in New South Wales only covers defects for up to six years after the completion.

This incident comes six months after residents were evacuated from the Opal Tower were many apartments remain empty. A subsequent review recommended an overhaul of the industry, however the government has yet to act.

NSW Premier Gladys Berejiklian said it was a complex issue and should not be rushed.

Berejiklian said a Building Commissioner would be appointed by the end of the year. Advocates have reaffirmed the calls for an overhaul of the building sector.

“Consumers have nowhere to go in these sorts of situations, there’s nobody for them to sue, there’s nowhere for them to turn,” the Owners Corporation Network’s spokeperson Stephen Goddard 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,” he added.

Goddard warned prospective buyers against buying off the plan, adding that buyers cannot assume buildings have been built to code.

“We’re now seeing owners confronted with the possibility that their investment … may be lower than their outstanding mortgage,” he said.

Builders Collective of Australia president Phil Dwyer, who previously called for a Royal Commission, said the industry needs an overhaul.

“It is just disgraceful what we have done to those residents, throwing them out on the street without any support, let alone what we have done to their building’s value.

“It is a 20-year system that is not acceptable for modern Australia. We need to clean the slate, throw out everything because the regulators, or so-called regulators, have done nothing about making sure that we have a compliant industry and they haven’t enforced regulation,” he added.

“In fact, the regulators have delegated their responsibility to insurers and sat back for 17 years.

“We have had an industry that has been able to do what it likes, because there has no proactive enforcement of regulations,” Dwyer said. “We’ve had 70 plus enquiries into building industry, and everyone of them has made recommendations that have never been to adopted,”

The Australian Institute of Building Surveyors, Engineers Association and Owners Corporation Network yesterday backed the calls for a royal commission.

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