If you buy a used car you get a service history.
If you buy a fridge or flat-screen TV you get a warranty.
But what about buying an apartment?
In the past eight months, at least three apartment buildings in Sydney have been evacuated because of defects, prompting questions about the consumer protections available for buyers of high-rise units.
Today, it was revealed another building in Zetland had sat empty since late last year after extensive water damage made it non-compliant under NSW fire codes.
According to Owners Corporation Network (OCN) executive officer Karen Stiles, a lack of regulation has created a dog-eat-dog scenario.
“You need to research the developer and builder yourself,” she said.
“Find out their previous projects and go to the site itself and speak to other residents.”
Chamber Russell Lawyers partner and residential construction dispute expert Paul Jurdeczka said his best advice was to find a “reputable builder”.
“But as we’ve seen [in Sydney], that has been harder to determine these days,” he said.
He said the potential buyer also had the responsibility to carry out their own due diligence, such as engaging a conveyancing solicitor and looking at the strata report.
“The problem is the property market has been so hot that people have been thinking they’re going to miss out,” he said.
“But the only thing they’re missing out on is buying a lemon.”
Three buildings, three evacuations
Residents from 30 apartments in a studio-style complex in Zetland were evacuated eight months ago after “extensive and severe water damage” made the building non-compliant under state fire codes.
The City of Sydney said it spoke to the building’s owner in February, who had engaged “consultants to address the issues and make the building habitable again”.
It comes as residents of the nearby Mascot Towers were evacuated from the 132-apartment complex last month after cracks appeared in the building.
Owners of apartments in that development have been left with a multi-million-dollar repair bill as the building, which was constructed more than 10 years ago, is too old to fall under warranty.
Meanwhile, more than six months after the Opal Tower at Olympic Park was evacuated, about a third of the apartments are still deemed uninhabitable.
The three incidents have highlighted what industry experts have labelled a gaping hole in regulation and protections, with some residents suggesting there were more protections for someone buying a toaster.
For prospective buyers, industry experts suggest the following advice:
- Look for a sinking-fund forecast in the strata report, plus any planned or completed remedial works
- For existing apartment complexes, conduct a body corporate records search
- The search should outline recent annual meetings and information on the sinking fund and any planned and completed capital works projects
- Find the builders’ previous projects and go and inspect them in person
- Don’t buy an apartment in a complex more than three-floors high
- Have an independent building inspection completed
Ms Stiles said the OCN also suggested buying an apartment more than 10 years old.
“Generally we find faults have emerged and been fixed within the first 10 years,” she said.
“But Mascot Towers and this most recent one in Zetland were more than 10 years old, so that doesn’t always ring true.”
She said NSW needed a resourced building commissioner with statutory authority.
The NSW Government has flagged a number of proposed reforms last month, including the introduction of a building commissioner, however they are yet to be introduced.
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