A hauntingly familiar headline has hit the Melbourne press -
‘Sinking Melbourne apartment complex leaves hundreds of homeowners facing the prospect of paying a ‘double mortgage’ to fix severe foundational issues with their properties.’
I only know what I’ve read in the press, but the similarities between the buildings at Eucalyptus Drive, Maidstone and Mascot Towers, Sydney are alarming -
- Subsidence of a mature-aged suburban residential high rise
- Evacuation (although it seems in this case some have returned to collect items and some are living there)
- Builder and developer probably long gone and without assets even if this can be traced to their work (about which there is nothing reported to date about the cause of the defects)
- Mixed circumstances of owners – some with mortgages, some without, some first homeowners, some investors, some old, some young
- An initial repair proposal voted down by owners because it’s too expensive
- Talk of a strata loan at 9 to 11 %
- Owners pinned hopes on politicians and the media
All these things track with Mascot Towers. And that didn’t end well for the owners.
Read: Mascot Towers – the other side to a sad story
The Maidstone owners deserve our help, but based on the Mascot Towers experience and other catastrophic tower failures around the world (that I’m presently studying, link at the end of this article) they also need some tough love, and here it is -
1. Choose life over property
The condominium owners at Surfside Florida had been warned for years that they had a building safety problem and failed to take remedial action because they feared not being able to afford the cost of repairs; then one night the building collapsed, killing 98 of them.
2. No one is coming to help
Not the government, not the media, not your priest. You have been unlucky and others may be to blame but you are the owners of the property, and you are legally responsible for the property you collectively own. Unlike a company that gets into financial trouble, you can’t wind up a strata entity without paying all the bills, and that includes the bill for fixing the common property. Collectively, you need to accept this harsh reality as fast as you can.
3. Time is your enemy
During the time you spend chasing false hopes of politicians, the media, the no win no fee lawyers, and a compassionate Australia coming to your rescue, the damage will get worse. The rectification costs will get more expensive. More mortgages will go into default. More money will be wasted on consultants and campaigns. And finally, your relationships will deteriorate along with your mental health.
Read: Lodge It or Lose It: Lessons from a 7-Year Legal Action Wait
4. Stay united
As a group of owners, you will have many differences: age, financial circumstances, ethnicity, personality types, capacity for risk and levels of resilience. Don’t let these things tear you apart. The only thing you have in common is the problem. Stay focused on that rather than siding with people you like.
5. Your first loss will be your best loss
The result in Mascot Towers was a loss for each owner that was about equivalent to what they would have lost if they had accepted the first round of advice and got on with the repairs. What really hurt owners personally was the five years of indecision agonising about coping with that loss.
I wish I had better news, but sometimes you must be cruel to be kind.
Meanwhile, those of us in strata management need to get better equipped to deal with these cases because, sadly, there are more coming. It’s happening everywhere in the world.
Read: My Research – Towering Tragedies
Michael Teys has more than 30 years’ experience as a strata lawyer and academic and has owned 11 strata management agencies throughout Australia. He has a Master of Philosophy (Built Environment) and Bachelor of Laws. He lectures and writes widely about strata management issues in Australia and internationally.
