sam reece
Samantha Reece, AAA head. Image supplied.
  • Australian Apartment Advocacy identified 26 WA apartment buildings containing defects
  • Many owners can't afford repairs and have taken out loans to cover structural repair
  • An apartment repatriation fund would cover structural defects

Building defect repair costs, being forced to take out loans for cladding repair and sewage problems due to incorrect plumbing are among the many issues that have caused apartment owners to contact the Australian Apartment Advocacy Group WA (AAA) calling once again for an apartment repatriation fund.

While owners of apartment four storeys or higher typically have access to a statutory warranty period covering defects for six years, this does not cover scenarios whereby a builder/developer phoenixes their company or leaves town.

Apartment owners argue it is not their responsibility to pay for structural defects and feel both abandoned and frustrated by the lack of legislative and general support from the government.

One senior North Coogee resident, Bev Mainstone, said she cannot afford the increased levies to cover the cost of repairs to her apartment and will most likely be forced to sell her home.

“I sold the family home with the dream of enjoying a modern, maintenance-free lifestyle but it’s only given me problems, not peace,” she said.

“These developers have lined their pockets because of the governments push for more apartments; they have used cheap materials, often imported products that are not certified for use in Australia – why am I paying for this?”

Bev Mainstone, North Coogee apartment owner

“The water membrane is faulty, the windows weren’t sealed, there is water in the concrete and the fittings and screws are rusting and the company that created this mess has cranes all over the sky, it’s not right.”

First home buyers have also been faced with the same issues. 33-year old Eric Soon said the owners of his property were forced to take out a $900,000 loan to repair the cladding so it could comply with Australian standards.

“This is the first home I have ever bought, and at night it sounds like I am living in a tin shed,” said Mr Soon.

“It’s taken the joy out of owning my first place. I have had to go into more debt to pay for the cladding and other defects on top of my mortgage.”

Eric Soon, apartment owner

The AAA group has identified 26 apartment buildings containing defects – which includes significant structural, water, fire, balcony, cracking and elevator problems – who were built by three companies affecting about 1600 residents. One of these three companies is the Diploma Group, which collapsed several years ago.

Residents at Diploma’s Queens Riverside building in East Perth were left with a hefty bill covering a malfunctioning complex thermal power system.

Sam Reece, AAA CEO, says these stories may just be the tip of the iceberg and suggests without the Western Australian Government’s intervention, a disaster of Titanic-sized proportions could be on the horizon.

“It’s a crisis that isn’t going to go away,” she said.

“This is the dark side of the government’s high-density plans for Perth. It’s systemic and, like a disease, it’s infecting apartments across the city.”

Sam Reece, AAA CEO

To counter this, Ms Reece has proposed a repatriation fund for apartment buildings. This would entail a 2% builders levy to be legislated to cover owners from defective apartment builds. The monies raised would then be allocated to the compensation fund.

She has also called for a portion of the $50 million Real Estate Fidelity Fund – set up in 1974 to cover West Australians impacted by criminal and fraudulent actions of real estate agents or a settlement or business transaction – to be allocated towards repair defects.

“An apartment isn’t just an investment or a building – for a growing number of us it’s our lives and our livelihoods. Western Australian residents are being robbed of the great Australian dream to enjoy their own home.”

The AAA also has a free kit available for prospective apartment buyers.

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