BUILDING COMMISSIONER DAVID CHANDLER warned that homebuyers should take it upon themselves to inspect apartments before they settle and adopt a “buyer beware” mindset.
IT is evident that Mr Chandler’s comments come as a consequence of the malaise of this industry, the evidence amassed over many years of defective construction and defective building materials used in housing/high-rise projects …
With the industry having been deregulated,with the loss of Standards,theimportation of defective building materials and Visa Workers, home buyers have been rendered no guarantees apart from self inspection and investigation … what has it come to in NSW INC?
Opal Tower owners corporation back NSW Building Commissioner comments
The owner’s corporation chair of Opal Tower has backed contentious comments from the Building Commissioner, saying in a perfect world consumers should not have to inspect buildings but until the industry changes it’s every man for himself.
Danielle Le Messurier, Anna Caldwell, Exclusive, The Daily Telegraph
October 29, 2019
AAP4:17New powers to tackle shoddy building work
October 23, 2019. NSW Minister for Better Regulation Kevin Anderson speaking to media at state parliament about new legi…
The owner’s corporation chair of Opal Tower has backed controversial comments by the state’s Building Commissioner, saying in a perfect world consumers should not have to inspect buildings but until the industry changes “it’s buyer beware”.
Shady Eskander said while the state government should be protecting homebuyers who have “no way” of peering behind the walls of brand new high-rise towers, consumers must do what they can to protect themselves until legislation is overhauled.
“Definitely I agree it’s not our job to know (about defects) but until the industry gets their act together and fixes the market, of course I’m going to beware,” Mr Eskander said.
“If you’ve got the Building Commissioner telling you yourself be careful – that is the fairest thing to say. He’d be lying if he said don’t worry, the government is going to get this right.”
It comes after Building Commissioner David Chandler was criticised at a budget estimates hearing on Monday for saying homebuyers should take it upon themselves to inspect apartments before they settle and adopt a “buyer beware” mindset.
“If I was in the market for a $750,000 apartment I would certainly be looking at who was the builder and I would certainly be wanting to have a better look at the apartment and the building before I settled,” he said.
Labor MP Courtney Houssos described Mr Chandler’s comments as “remarkable” while colleague Daniel Mookhey said he believed the average consumer would expect the government to regulate to ensure the product served up is acceptable.
Opal Tower in Sydney Olympic Park was evacuated on Christmas Eve when cracks appeared in the brand-new 392-unit high-rise.
Residents from 22 apartment are still unable to return due to ongoing remediation work.
Owners have launched a class action against the state government’s Sydney Olympic Park Authority – which owns the land on which Opal Tower sits – for losses incurred as a result of damage from defects.
It’s understood the total value of sales in the 36-storey tower was approximately $350 million and the claim could be around that figure.
Mr Eskander, who purchased his unit off-the-plan, advised homebuyers to avoid purchasing an apartment built in the last five years and know what they are buying.
“It is not our role to go and ensure the correct concrete strength was applied, the correct amount of steel reinforcement was there … what are we paying for at the end of the day if we’re doing all of that?” he said.
“It is not our job but until the government realises they have to change this industry … 100 per cent buyers beware of buying off-the-plan apartments.”
Better Regulation Minister Kevin Anderson last week introduced a suite of reforms into parliament to tighten the state’s construction industry.
*They include new measures to make it easier for owners of defective apartments pursue damages and a new registration scheme for building practitioners.
*Lead researcher in the field of defective buildings Dr Nicole Johnston of Deakin University said that while it was true “everyone needs to be a little bit more conscious”, the most problematic defects are not observable.
She also said it was costly and time consuming to make checks on off-the-plan purchases and “no amount of due diligence can provide certainty that you are buying something safe”.
“There’s no way a potential purchaser would know the membrane applied to a wall will cause a systemic leak – they can’t see behind a wall, there’s only so much investigation they can do,” she said.
Labor spokeswoman for better regulation Yasmin Catley said it was “pretty obvious there has been a serious failure of regulation in the building industry and we need to immediately restore confidence.”
“Sending a buyer beware message demonstrates the total and utter incompetence of this Liberal National government.”
This decline nationally was driven by Sydney, where site sales fell by 50% and average site values fell by 12% – more than double the decline in Melbourne:
The slump – from $8.25 billion of sales recorded in fiscal 2018 – was led by Greater Sydney, where the value of sales of development sites suitable for high-density projects (25 or more apartments and more than four storeys) halved to $1.97 billion (out of a state total of $2.7 billion)…
Driving the 38 per cent national fall was reduced demand from overseas investors, especially in Sydney, where they accounted for just 11 per cent of total site sales. Across Sydney, average site values fell 12 per cent to $184,000 per apartment, more than double the fall in Melbourne…
The collapse in high-rise site sales and prices follows a similar-sized crash in approvals:
As shown above, NSW high-rise apartment approvals tanked by 38% over the year to August 2019, and have collapsed by 52% since peaking in September 2016.
Given the two-plus year lag between high-rise approvals and completions, Sydney is facing an almighty construction bust that will likely run well into 2022.
Residents of a Frankston South building affected by combustible cladding said the issue, as well as a laundry list of other defects in their complex, had caused them major emotional and financial stress.
“I think this has probably been the worst 10 months of my life, putting up with this,” owner Kerry Ould told 7.30.
“You buy the biggest thing of your life and you have got zip consumer protection. Nothing.
The Victorian government has put $600 million towards a project to identify and replace dangerous cladding and has vowed to pursue dodgy builders who installed it.
*Other states are less advanced, with concerns raised around the delay in action on the issue in NSW.
NSW Greens MP David Shoebridge has been particularly vocal.
“In New South Wales, there’s not one cent that’s come forward from the state government to help property owners,” he told 7.30.
*”There’s no public register,we don’t even have a set of guidelines to identify what property owners need to do to make their properties safe.
*”This is a problem created by bad government, by deregulation and privatisation. And that’s why I believe government has to be part of the solution.”
*Mr Shoebridge said the NSW government was refusing to make a register of affected buildings public.
“I find it astounding,” he said.
“We’re two and a half years post that tragedy in Grenfell and we still don’t have a public register in New South Wales, we still don’t have a comprehensive system to identify buildings at risk of flammable cladding.”
Residents in 37 apartment complexes across Sydney have been advised remediation work to remove some or all of the combustible cladding on their buildings will need to take place.
NSW Better Regulation Minister Kevin Anderson said the government was approaching this issue “practically and diligently”.
“We have prioritised high-rise residential buildings for assessment with local councils, who are making every effort to see assessments done as soon as possible,” he told 7.30 in a statement.
“Every day we clear more buildings and learn more about the buildings requiring remediation work.
“I want to make it clear, residents are not in any immediate danger as a result of living in one of these buildings. Extra fire safety measures have been put in place to protect residents until buildings can be cleared or remediated.”
The tougher regulations would mean builders and designers are required to register plans for key elements like water-proofing to ensure they are carried out in compliance with building standards.
The new laws also state that a duty of care is owed by a person who carries out construction work, making it easier for home owners to sue their builder if things go wrong.
Building commissioner David Chandler said this will be the first in a series of legislative changes to help shore up the industry.
“We’ve got to stop making up construction in the field. So the first thing that we’re going to get here, is we’re going to get documentation that is completely, properly declared as being fit for construction,” he said.
“That’s a leap — that is huge. All of the designers out there acknowledge the fact that that’s a game-changer straight away.”
Renewed trust in ‘great Australian dream’
Minister for Better Regulation Kevin Anderson said the legislation would restore confidence among residential buyers.
“Those that do the wrong thing, those who cut corners, hopefully they will be gone,” he said.
“This is the start of the process that industry has been calling for. We want to fix the problems right at the start.”
He said there would be significant penalties set out in the regulations, in excess of $100,000 for corporations and individuals.
“What we’re doing today is, we’re drawing a line in the sand to fix those problems right at the start so mums and dads who buy into residential apartments in Sydney, in NSW, will have confidence that their dream — the great Australian dream — is as the plans that have been declared in that building.”
The changes will not be retrospective, so any owners of properties that experience issues in the future will not be covered by the new laws.
IT would appear that the longer ALAND, the Builder of neighbouring Peak Towers blocks access for the MASCOT TOWERS Engineers … the more attention they draw from the audience of SydneySiders concerned about defective developments … and unfair debt imposed upon the Mascot Towers residents …
ALAND’s reputation as a builder it would seem is sullied … how can they believe they can ride this out? How can they possibly recover?
Mascot Towers on unstable ground due to ‘loss of soil’, owners say
The owners of Sydney’s troubled Mascot Towers claim new tests have revealed a “loss of soil” under the cracking apartment complex’s north east corner.
The Mascot Towers Owners Corporation said new tests revealed the soil supporting the building has lost “bearing capacity”
*They claim engineers have been refused access to neighbouring apartment block Peak Towers where there were previous groundwater leaks
On Tuesday night the owners decided to pursue a commercial loan instead of raising money in special levies, which some could not afford
The 132-unit block was evacuated in June, and its Owners Corporation on Tuesday accused the developer of a neighbouring apartment complex, Peak Towers, of denying access to engineers as they try to determine the cause of the structural problems.
“Urgency has arisen following tests revealing a reduction in bearing capacity of soils at the north eastern corner of the building near the boundary of the Peak Towers development,” an Owners Corporation statement read.
Aland — the company that built Peak Towers — said it had not been shown the report the Owners Corporation was referring to.
The Owners Corporation urged Aland to do “the right thing” and allow them access to the building.
“If Aland is confident that Peak Towers is not of any cause for concern for Mascot Towers, then they should have no difficulty in allowing our engineers access to the site,” the statement read.
In a statement, Aland’s managing director Andrew Hrsto said his company had no control over access to Peak Towers.
The Mascot Towers Owners Corporation said all engineering findings were being reported to newly appointed NSW Building Commissioner David Chandler — a role created by the State Government two months ago in response to concerns about construction standards in Sydney.
Construction is a complex industry with many layers of responsibility, so where does the blame lie when things go wrong? Builders, if they’re still around, are the first port of call. But private certifiers or building surveyors say they’re often the ones unfairly accused of missing defects. Many in the industry say the rules just aren’t tough enough to enforce accountability or stop those cutting corners.
GEOFF HANMER, ARCHITECT: It’s almost incomprehensible but government has had an agenda to reduce regulation at a point where buildings have become more complex and probably require a higher standard of regulation.
AND … VIEW ‘APARTMENT OWNERS PAYING FOR DEFECTIVE BUILDINGS’
Apartment owners paying for defective buildings
UPDATED 22 OCTOBER 2019
Australia’s building industry has been under scrutiny after a series of significant defects were found in high rise buildings, including the Opal and Mascot Tower complexes in Sydney.
These incidents have focussed attention on the lack of protection for owners when things go wrong, and the impact of the building boom on quality.
TRACY BOWDEN, REPORTER: More than 2.3 million Australians live in apartments.
The number of people choosing high-rise living has jumped by 78 per cent in 25 years.
But what happens when your biggest investment becomes a disaster?
GEOFF HANMER, ARCHITECT: You’ve got better protection if you buy a toaster than if you buy a unit. If something does go wrong, there’s really nobody to turn to.
MAREE PETERS, MASCOT TOWERS OWNER: We have an asset worth $1.5 million that, right now, is worth nothing.
BRIAN TUCKER, MASCOT TOWERS OWNER: We’ve just hit a brick wall and I can’t see a way out of this at the moment.
TRACY BOWDEN: As the spread of residential towers has grown especially in Sydney, Melbourne and Brisbane, oversight and quality have lagged behind.
SHADY ESKANDER, OPAL TOWER OWNERS CORPORATION: Build it quick, build it fast, sell it quick and move on to the next one and the government has allowed that to happen.
This is my beautiful apartment, my home in Opal Tower.
TRACY BOWDEN: That is a remarkable view!
SHADY ESKANDER: This is what we bought into.
TRACY BOWDEN: Shady Eskander finally returned to his apartment in Sydney’s west eight months after the building was evacuated.
SHADY ESKANDER: We’re excited to be home, but there’s just uncertainty with what the future holds.
JEREMY FERNANDEZ, ABC NEWSREADER: The New South Wales Government has ordered an urgent investigation into the structural integrity of the Opal Tower.
NEWS REPORTER: Residents of the crumbling Opal Tower were hoping for answers…
NEWS REPORTER: The situation inside Sydney’s cracked Opal Tower…
NEWS REPORTER: The apartment block, the Opal Tower…
TRACY BOWDEN: Christmas Eve, 2018 – an event that would shake the foundations of Australia’s construction industry. After cracking sounds were heard, all 392 apartments were evacuated.
SHADY ESKANDER: Oh, it’s been devastating. I mean, financially, it’s been huge.
There have been people in the tower who have wanted to sell and, of course, cannot sell and so, you can imagine you’re going to the bank, you’re saying to the bank, “I’d like to borrow money.”
They say “Okay, let me look at your assets. Oh, one of your assets is Opal Tower…”
PROFESSOR MARK HOFFMAN, DEAN OF ENGINEERING, UNSW: The Opal Tower was a significant event in the lifetime of the Australian construction industry.
Not a fortunate event, but certainly caused everybody to step up.
TRACY BOWDEN: Dean of Engineering at the University of New South Wales, Professor Mark Hoffman, co-authored an independent report into what went wrong at Opal – a change in designs meant a key structural element wasn’t built to standard.
MARK HOFFMAN: The beam is much weaker than it should have been and, ultimately, failed.
In another place, there was similar sorts of situation where. but one beam failed and what we found in that beam is it had a lower-strength concrete than the other beams.
TRACY BOWDEN: The Opal report, released in February, makes a series of recommendations to the New South Wales Government.
These include that all engineers that approve designs should be registered, designs are independently verified before construction starts, and that during construction, a registered engineer makes critical stage on-site checking.
Those recommendations are being considered by the government.
The Opal builder, Icon, has so far spent $29 million on repairs and allowances.
JOHN FLECKER, CEO, MULTIPLEX: It’s over half a billion dollars’ worth of work, this project, and several years of construction over about 14 separate phases.
I would say that the building industry generally in Australia is actually world-class, and I’d go as far as to say, in some circumstances, in quality and safety, that we’re world-leading in many respects.
They are just such a complex industry…
TRACY BOWDEN: Multiplex CEO, John Flecker, says the confidence crisis in the industry has sent business towards the big companies.
JOHN FLECKER: We’ve had more enquiries, but we will price work at what we think it costs to deliver the quality that’s required and if the developer doesn’t like the price we offer, we don’t do the work.
TRACY BOWDEN: But there must be some people out there doing the wrong thing?
JOHN FLECKER: There may be some bad apples, but I think it’s more a case of probably, in a circumstance where there is a lot of work in a boom situation in some states, that you just can’t spread the appropriate skills and training far enough to deliver the product that needs to be delivered.
TRACY BOWDEN: It’s a grim situation for the owners at the 10-storey Mascot Towers in Sydney’s south.
Their building is more than a decade old, so the statutory warrant period has ended.
It’s up to them to fund repair.
MAREE PETERS: It’s your home. It’s everything that you’ve worked for, that you think is safe, and that is protected.
ANDREW BURRELL, MASCOT TOWERS OWNER: I feel like it’s a black hole with a never-ending siphon of money into it and how we’re going to get out of it, is the worrying thing.
TRACY BOWDEN: In June, the building was evacuated when cracking appeared in the basement.
ANDREW BURRELL: I took early retirement with the view to using the money from Mascot Towers’ rental money to fund that until I’m 60, when I can draw down my super.
Well, it hasn’t worked out that way.
BRIAN TUCKER: Well, we did everything that I believe a responsible person would do.
We absolutely did due diligence in inspecting the books and inspecting the, doing a visual inspection of the building…
You’ve got the intersection of the path there…
TRACY BOWDEN: Apartment owner Brian Tucker is a surveyor but even his knowledge of the building industry didn’t protect him when he bought into Mascot Towers.
BRIAN TUCKER: That should all line up with this…
At the moment, we have a building that’s, if we don’t do anything, it’s worth nothing and unless we put money in to try and get some value back, we’re left with an asset that is worthless.
TRACY BOWDEN: Having just learnt that the cracks in their building are widening, owners will meet now to decide between a commercial strata loan or a multimillion-dollar levy to pay for urgent repairs.
Stage 1 of the levy would cost around $7.7 million.
MAREE PETERS: For nine months, it’s about $10,500 a month.
TRACY BOWDEN: Where will you find that?
MAREE PETERS: Out of super, out of some savings that we had that we retired on. Family will help us if we need be.
TRACY BOWDEN: Andrew Burrell and his partner, Alex Chan, can’t see how they will afford the payments.
ALEX CHAN, MASCOT TOWERS OWNER: It’s just bundled together like we’re sort of on the Titanic. We’re actually sinking together. We have no way to actually escape.
The worst comes to the worst, I think the only way we can find a way out is to declare bankruptcy.
TRACY BOWDEN: It’s probably no surprise that there’s been a drop in confidence in the high-rise residential sector, and that’s affecting prices.
TIM LAWLESS, HEAD OF RESEARCH, CORELOGIC: A couple of years ago, the market was very different. Values were still rising, in fact, quite quickly.
TRACY BOWDEN: 7.30 can reveal a significant change in the value of off-the-plan projects in Sydney and Melbourne.
TIM LAWLESS: In Sydney, about 60 per cent of off-the-plan apartments at the time of their settlement are valuing lower than the contract price.
In Melbourne, it’s closer to 50 per cent, about 53 per cent.
TRACY BOWDEN: That means that, for more buyers, the apartment is worth less on the day they settle than when they signed the contract.
Two years ago in Sydney, less than 16 per cent of off-plan properties were selling below the contract value.
Why is that happening?
TIM LAWLESS: There’s a whole lot of reasons. I mean there’s the organic factors around the fact that values have fallen over the past two years . Sydney’s down 15 per cent, Melbourne’s down 11 per cent.
But there’s also the fact that we have seen quite a significant oversupply in that high-rise sector of the marketplace.
TRACY BOWDEN: Many in the industry believe the only answer is tougher, enforced regulations.
GEOFF HANMER: The new construction will be different than construction up till Opal, if you like.
But that still leaves us with 500,000, four-storey-plus units which have been built over the last 30 years which are potentially defective.
TRACY BOWDEN: Architect, Geoff Hanmer, has been in the industry for more than 30 years, and says calls for an overhaul of regulations go back decades.
GEOFF HANMER: I just wish somebody would do something about this. We first started working on this issue in the 1990s, and since then, things haven’t got any better.
SHADY ESKANDER: You’ve got defective buildings that are coming up and what’s it going to take? Does a wall have to fall on someone and injure human life in order for them to turn around and realise that we now need to regulate our industry?
Changes need to happen.
Your life does get turned upside-down.
TRACY BOWDEN: Back at Opal Tower, Shady Eskander and his fellow residents are planning a legal class action in a bid to recoup their losses.
Do you feel safe in this building?
SHADY ESKANDER: Well, let’s be honest – you hear a little creaking, you hear a little bit of cracking, your mind starts to question.
.with your finances, the bank may have second thoughts about your mortgage
.along with the falling value of your property your equity is not looking good either
.if you are looking at selling you know it’s going to be harder to get even near what you need to break even
.to sell now means further proof of your meeting quality assurances the market is now demanding following recent well-publicised failings in this space
AND where are the strata fees going, where are the insurance premiums going, up of course!
Ever increasing realisation that once the developer and builder have left the site having met their minimum obligations they are off the hook, and the owners and the body corporate are left with the issues and liabilities.
Gladys is not going to help, after all her lot are about development they are simply not sincerely concerned about anything that stands in the way.
IT will be interesting to see how long her lot will keep pretending they are genuine about fixing the backlog of major building defects … all they seem to be interested in doing is keeping secret the list of those buildings still cladded in dangerous materials! OMG!
VIEW 7.30 TONIGHT!
Majority of off-the-plan apartments worth less than purchase price, data shows
Shaky confidence in the capital city apartment market is hitting off-the-plan buyers hard, with a significant rise in the number of newly constructed units now worth less at completion than the price they were originally purchased for.
According to CoreLogic data for August, more than half of newly constructed off-the-plan apartments in Sydney and Melbourne were worth less than the owners bought them for
Nearly a third of off-the-plan apartments in Sydney were worth at least 10 per cent less
CoreLogic’s Tim Lawless said there had been an oversupply of apartments in the high-rise sector
7.30 can reveal that 60 per cent of off-the-plan apartments in Sydney, and 52.9 per cent in Melbourne, werevalued lower than their contract price at the time of settlement.
The latest figures from property data provider CoreLogic for the month of August shows that nearly a third of off-the-plan buyers in Sydney were moving into new apartments worth at least 10 per cent less than the price they purchased them for.
Just two years ago, less than 16 per cent of newly constructed NSW units were valued below contract price after they were completed.
In Queensland, 43.1 per cent of units were worth less at settlement than what they were purchased for, and in Western Australia it was 22.5 per cent of apartments.Follow this story to get email or text alerts from ABC News when there is a future article following this storyline.Follow this story
CoreLogic’s head of research, Tim Lawless, said when many of these newly completed apartments were originally sold off the plan back in 2016 and 2017, the market was very different.
“We were seeing values rising at about 15 to 20 per cent per annum in Sydney and Melbourne,” Mr Lawless said.
“Now cast your mind forward to 2019 and we’ve seen prices come down in Sydney by 15 per cent. In Melbourne, they’re down by about 11 per cent.
“A lot of those off-the-plan buyers have seen a very fundamental shift in the value of the project that they purchased a couple of years ago.”
Mr Lawless said there had been a significant oversupply in the high-rise sector, with supply substantially outpacing demand.
But he said concerns around construction quality, remediation costs and flammable cladding had had a compounding effect.
“That [is] probably also weighing on the minds of people in the marketplace and potentially affecting the resale value of those properties as well,” he said.
A string of negative headlines has plagued the apartment market in the past two years, beginning with London’s Grenfell Towers fire in June 2017 and the discovery of the widespread use of combustible cladding on apartment buildings.
They will decide between a commercial strata loan or a multi-million-dollar levy to pay for urgent repairs.
Stage one of the levy would cost around $7.7 million.
“At the moment we have a building that if we don’t do anything it’s worth nothing, and unless we put money in to try and get some value back we are left with an asset that is worthless,” Mascot Towers owner Brian Tucker said.
AndRise, in Moonee Ponds, north-west Melbourne, is offering to pay buyers’ body corporate fees and council rates for two years.
Pete Wargent, a buyers’ agent and co-founder of property investment advisory firm Allen Wargent, said the unconventional sales tactics show developers have “excess stock that is very difficult to shift”.
Such discounts and incentives are par for the course at this stage of the construction cycle, he said. As are developers offering buyers’ agents large cash incentives and commissions of up to 6 per cent to sell unwanted apartments.
But a healthy pipeline of projects suggests there are plenty more incentives to come.
“Even now, there’s a high volume of completions coming through,” Mr Wargent said.
“In the June quarter, the number of completions in New South Wales for apartments was the highest ever … so there’s likely to be more discounts and unconventional measures to get stuff sold.”
Don’t expect prices to nosedive anytime soon, though.
*Despite the testing selling conditions, developers will do whatever they can to shore up the purchase price.
According to Angie Zigomanis, associate director of residential property at BIS Oxford Economics, that’s because dropping the price for some units could drag down the valuations of neighbouring units that were previously sold for a higher price.
*When that happens, the amount banks are willing to lend buyers is less than the contracted purchase price, meaning buyers either need to cover the shortfall, or forfeit their deposit.
*By holding firm on the purchase price and offering incentives instead, developers hope to prevent this from happening.
But Mr Zigomanis said this comes at the cost of over-valued apartments.
“Most developers will take into account the incentives and discounts in terms of the net price,” he said, adding that spelled trouble later on.
“Someone who bought a $500,000 apartment with a 10 per cent incentive or rebate, or something else, technically it was worth $450,000 for them to buy.
“But if it re-sold for $450,000 … when you look at the listed purchase price, it would reflect a 10 per cent drop in value – so it’s a double-edged sword in that sense. And that [affects] valuation down the track.”
*Propertyology director Simon Pressley has a clear
*“Do not touch high-rise apartments,” he said to The New Daily.
*Based on historical data, Mr Pressley predicts the capital growth of newly built, high-density apartments to lag that of houses by at least 20 percentage points over the next five years.
“There will be significant challenges for the construction industry for quite some time … [because] we have been building a lot more apartments than we actually need,” Mr Pressley said.
“Significant job losses is one concern … and selling apartments off the plan is going to become increasingly difficult for developers … because the consumers are getting more educated on the crap quality of construction in this country due to poor quality control.
“The Mascot Towers stories … all that kind of stuff … it’s just the tip of the iceberg.”
The ACT Government has intervened to prevent the possible collapse of the Kingston Place apartments, after its developer refused to install temporary propping on the site.
Morris Construction Group says it will not comply with an emergency rectification order over concerns it could cause further damage
The ACT Government has begun to carry out the work itself, and will hand the bill to Morris Construction
Morris Construction faces a maximum $1.62m penalty for refusing to comply with the order
Morris Construction Corporation (MCC) warned the emergency work could risk safety and cause further damage to the building.
The ABC understands an independent contractor began installing the 234 props to support the building on Thursday.
Morris Construction disputes emergency order
Canberra’s construction watchdog issued Morris Construction an emergency rectification order late last month over concerns the apartment block was not structurally sound.
Apartment owners said they were told the building suffered from “punching shear” in its underground floors, a defect in which concrete columns are subjected to high amounts of pressure, which could cause them to fail.
The developer, which has paid for the installation of props at the apartment previously, unsuccessful tried to block the order in the ACT Civil and Administrative Appeals Tribunal.
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It had until today to complete the work, but Morris Construction has confirmed it will breach the emergency order.
“The safety of the public and those who live and work in its developments is Morris’s utmost priority,” the company said in a statement.
“On the basis of expert advice it has received, MCC is not willing to perform the works specified under the [emergency rectification order] at this stage.”
ACT Government will have to foot initial rectification bill
It is an offence not to comply with a rectification order, with corporations facing a maximum penalty of $1.62m for a breach.
The ACT Government will be forced to pay for the work to be completed, with Morris Construction then owing a debt to the territory.
Company director Barry Morris said he was committed to resolve the litigation involving the building.
“However, we cannot in good faith perform rectification works to a build when we have been independently advised that doing so may cause further damage to it,” Mr Morris said.
Mr Morris said requests to meet with the constructions occupation registrar over the order were not responded to.
“Further investigation is needed to ensure that any works required — if any — are performed safely,” he said.
Building Quality Improvement Minister Gordon Ramsay said neither the Government nor the community would tolerate sub-standard building work.
“Cleaning up the building industry requires all parts of the supply chain to realise that poor work is not only detrimental to homeowners and investors but damaging to the industry and community as a whole,” Mr Ramsay said.
“I’m also committed to improving access to justice outcomes for Canberrans who have suffered or are suffering potential financial stress due to structural defects involving the work of a dodgy builder and or developer.”
Mr Ramsay said the Government was considering a developer-licensing scheme to ban “dodgy operators” from working in Canberra.
THIS from the Owners Corporation raises our hopes for the Mascot Towers victims …
‘THE OWNERS CORPORATION intends to seek “legal redress and compensation based on the engineering advice to date on what is behind the damage caused to Mascot Towers”. ‘
SOME COMMENTATORS ASK VERY PERTINENT QUESTIONS AND OFFER SUGGESTIONS …
For example …
-where is the technical information? A description of the problem, and a
description of the options available to fix the problem(s)?
And suggestions from another …
What has to happen to prevent future construction problems, is to only allow buildings that have insurance paid for by the developers to provide a 25 year warranty for all structural faults and water penetration in Strata Title buildings with a requirement the insurers undertake the building inspections whilst it’s under construction.
Some architectural/construction methods are clearly quite stupid, and are used to give buildings a “sleek look” and fashionable feel, flat roofs, invisible downpipes.
Fashionable trends in architecture should be banned, buildings required to be soundly engineered, with passive water exclusion/fire safety.
Internally bathroom tiling should be banned in strata units and replaced by continuous heat sealed vinyl floors and walls, multiple bathrooms in Strata Units banned. No gas in Strata Units.
The insurers must be backed by a large reinsurer with final liability for Government if claims are not paid.
No 25 year warranty, no insurance it can’t be built.
Government needs to learn that “red tape” was there for a reason, voters have to learn not to vote for red tape cutters.
From another …
What happened to Home Warranty Insurance to cover the cost? Or the Certifier being liable for signing off on work that does not comply with Australian Building Standards? Oh, that’s right the NSW LNP Government weakened the laws so much to please their developer mates that the developers are completely un-accountable.
Why does not every article on this subject mention that as the opening paragraph?
This is the result of the ideologically blinkered approach that demands surpluses at the expense of good governance. Continually cutting back on regulation and the staff to enforce such regulations has created the situation where there is virtually no oversight of anything.
On top of that we allow overseas tradesmen to work on projects to fill the shortages governments have engineered through the destruction of TAFE.
Aren’t “developers” required to place funds into an account to be held there for a number of years to pay for such failures? This should be an insurance policy for buyers of property.
I believe travel agents, for example, operate under such a system.
If things go wrong, the customers are protected. Point in case, the recent shut-down of Thomas Cook.
What appears to also be relevant …
Rack and stack it and watch the stamp duty poor in. We will pay lip service to the victims later
It’s clear that this building will have to be demolished, foundations cannot be repaired whilst a building of this size remains upright.
It’s also clear from the waterlogged carpark it’s below the water table, well-constructed sealing is not in place, the reinforcing steel will always be an ongoing problem.
No unit in this building will ever be sold.
All that remains is how, or if the owners are to be compensated for both the Government and Council negligence in approving this development in the first place, failing to ensure that it complied with Architectural/Construction/Engineering requirements.
These problems will occur in all low lying areas from Kensington to Botany/St Peters as global warming raises the water tables and makes now/previously compliant construction methods unsuitable for the future conditions of the terrain.
I would not buy any units in any low-lying floodplain areas like Eastlakes, Kingsford, Alexandria or Homebush Bay.
I would insist on a rock subsurface.
Squarely the fault of successive State governments.
*Forget the stadiums and start fixing Sydney’s apartments.
Everyone knows the stadiums did not need replacing, but the crumbling apartments of Sydney are a real crisis and a human tragedy.
Mascot Towers residents given two ‘very bad’ options after building failure
Residents of the evacuated Mascot Towers are being forced to consider two options to fund urgent remediation works at the 132-unit complex, but fear they won’t be able to afford either.
At an annual general meeting later this month, apartment owners will be given the option to proceed with a multimillion-dollar special levy or rescind it in favour of a commercial strata loan to fix the building.
One loan proposal would offer up to $20 million at a 7.7 per cent variable interest rate per annum over 15 years, with funds to be put towards stages one and three of the remediation works which have already started.
One resident, who did not want to be named, said “the options presented to us as owners are like choosing a preferred execution method”.
Another owner said both options are “very bad”, adding he had spoken with a bankruptcy lawyer on Wednesday morning.
“We don’t know whether the $20 million is the end or just the beginning. We have not yet received the final costing,” the owner said. “The strata committee can liquidate me if they push through the motion in the AGM.”
Resident Brain Tucker said the need to finalise a payment option had intensified after engineers warned that as the weather warms, the building would be under significantly more pressure.
He said the uncertainty of the situation is “at the back of your mind all the time”.
“It’s the first thing you think of in the morning, and the last thing you think of at night – just how am I going to get out of it,” he said.
“It’s a nightmare, there is just no easy way out. Just to see Mascot Towers boarded up, it’s just horrible memories.”
Residents of the 132 apartments were evacuated in June over cracking in the primary support structure and facade masonry, causing fears the building had become unstable.
Four months on,owners have been given no indication when they will be allowed to return.
A spokesman for the owners corporation said they were presenting owners with the best funding options it had managed to secure.
“Although the special levy was approved at the last extraordinary general meeting, we now have access to loan alternatives which will reduce the owners’ short-term funding commitments by extending the payment term to 15 years,” he said.
*The spokesman also said the owners corporation needed to factor in legal costs because they intend to seek “legal redress and compensation based on the engineering advice to date on what is behind the damage caused to Mascot Towers”.
A spokesman for the Minister for Better Regulation and Innovation said the government had made additional expert technical advisers available, who would provide independent advice on any remediation plan.
“This will allow the full scope of the works to be understood, costed and verified through an independent expert peer review and help provide greater peace of mind to lot owners that any works program will ultimately enable the building to again be occupied,” the spokesman said.
Better Regulation Minister Kevin Anderson told Parliament last month rental assistance for owners had been extended by six months, covering residents until March 2020.
The AGM will be held on October 22 at the Stamford Plaza, Sydney Airport Hotel.