Anger erupts as cracking apartment owners left destitute and bankrupt

Yesterday was the first day of the inquiry into NSW building standards, which was set up last month after major faults appeared in apartment buildings such as Mascot Towers and Opal Tower.

The inquiry heard tails of woe from owners of apartments in the Mascot Tower, who have been left destitute and facing potential bankruptcy. From The SMH:

Vijay Vital, who was evacuated from Sydney’s Mascot Towers on June 14, was overcome with emotion…

“I stand here as a parent as well; my daughter asked me, ‘When can I go home?’ ” Mr Vital said….

Another Mascot Towers resident, Alton Chen, said he may have been better off investing in a caravan.

“Perhaps what I should have done is invest in a caravan because at least, if it was burnt down, at least I’d be covered by the insurance,” he said.

Mr Chen said he and hundreds of other residents were still waiting for answers to what caused the 132-unit block to be deemed structurally unsound.
“For a lot of us, this is the only place that we have that we call home … we don’t know when we can go back, a lot of uncertainties are right in front of us,” he said.

“We’ve got to pay mortgages for a place we can’t live in”…

“Developers and builders are protected by a limitation period … limited liability protects the companies. What about us, where is our protection?” he asked…

Mr Chen told the committee affected residents needed more government support. “A lot of us can’t afford to go bankrupt … we need the government’s support,” he said…

Meanwhile, returning residents of the Opal Tower, which was evacuated on Christmas Eve amid severe cracking, have been told that they face a ten-fold increase in insurance premiums:

Karl Sullivan, head of risk and operations for the Insurance Council of Australia, revealed the grim picture for the owners of 172 apartments at the Homebush building who were told on Christmas Eve that all residents must leave…

As he gave his evidence, Mr Sullivan said local insurers had assessed the risk for Opal Tower and other apartments found to have structural damage or defective materials such as combustible cladding…

He said he was aware that no Australian insurer was prepared to offer coverage to Opal Tower owners. Those wanting coverage were forced to “go offshore” and pay annual premiums that were “tenfold increases” on previous years.

These residents last month launched a multi-million dollar class action lawsuit against the NSW Government.

As I keep saying, this is likely only the tip of the iceberg given the unprecedented boom in high-rise apartment construction over the past decade:

According to the ABS, around 200,000 high-rise apartments were approved across NSW over the past decade, many of which likely contain significant faults.

The cost of rectification will be massive and will likely fall on both apartment owners and taxpayers alike, with most developers getting away scot-free.

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