A unit owner from Mascot Towers says he is “outraged” by the announcement of the proposed first phase of multimillion-dollar repairs to the troubled unit complex.
He told news.com.au owners felt there was a “gun to their heads” and were considering organising a protest after they were informed of a series of expensive plans organised on their behalf, to be delivered at a third extraordinary general meeting later this month.
Residents of the apartment complex in Sydney’s inner south have become increasingly stressed since they were forced to flee their homes in an emergency evacuation on June 14, caused by “rapid deterioration” in the basement area of the building.
The apartment complex has since been deemed unsafe by expert engineers, who continue to assess the buildings, which had become unstable, were tilting and had suffered damage in more than one area.
Owners have been told of new plans, delivered by StrataChoice, which include the proposed first phase of repairs to the troubled apartment complex, funded by a second special levy paid for by the unit owners, worth up to $10 million.
The plans also include the appointment of a barrister to oversee the owners corporation’s legal concerns, as well as the engagement of Grace Lawyers to pursue their neighbour, the Peak Tower, owned by Aland Developments, in the Supreme Court, allowing their appointed experts access without conditions.
A document given to owners by StrataChoice proposes whopping new $10 million levy will be paid with money loaned to the owners corporation, as opposed to being loaned to individual unit owners, and financed by Lannock Strata Finance.
The loans are to be repaid quarterly at 7.7 per cent over 15 years.
Lannock has approved loans to the owners corporation of between $5 million and $20 million for building defects to Mascot Towers.
One unit owner told news.com.au the proposed loans had caused “outrage” among the owners, who are discussing the possibility of holding a “sleep-out protest” at the building.
“This whole thing is a gun to our head with minimal transparency and we’re just being asked to sign over,” the owner, who didn’t want to be named, told news.com.au.
“There’s outrage among the owners. They’re saying we must take this loan at 7.7 per cent.”
He said more competitive loans should have been offered to the owners.
Responding to these claims, a spokesman from the owners corporation told news.com.au there was no obligation for owners to take on these loans.
“The loan is one form of funding the works,” he said.
“Owners will decide how they wish to fund the works at the meeting. Some owners may have cash to pay for the works, some may use their own financier to fund the works, or the strata can obtain a loan to fund the works.
“This is up to the owners at the meeting and they will collectively decide. Every owner will be able to have their say at the upcoming meeting. No decision has been taken on the funding package”.
Documents indicate the loan offered will be financed directly to the owners corporation, instead of lending to individuals.
The spokesman said representatives from Lannock Strata Finance would attend this upcoming meeting “and any owner has an opportunity to ask questions and seek a negotiated position”.
He explained that the owners corporation approached two lenders, one of which “declined to offer terms” before deciding on Lannock Strata Finance.
The owner suggested another option would be interest-free loans, offered by the State Government.
“The council are the ones washing their hands of the whole thing,” the owner claimed.
“The State Government created the … framework that created the problem.
“There’s no other option, it’s like a gun is forced to our head.”
The spokesman for the owners corporation said the State Government had been approached in regards to these loans, and been provided documentation “for that purpose”.
The owners are concerned about skyrocketing costs. The initial cost to the unit owners for the building’s reconstruction is $10 million but this is just stage one a proposed four phases.
Documents provided to news.com.au show that the building’s principal engineer, Vadim Topolinsky, of TOP Consulting, has recommended four phases of construction to fix the building.
All these phases outline significant remedial and rectification works to different parts of the building.
The document suggests the works can be undertaken independent of one another, or at the same time, “depending on the availability of funds”.
A spokesman for the owners corporation told news.com.au that details of these works were “outlined in the engineer’s report and will be explained in further detail in the engineers presentation”.
Later this month, on August 22, the unit owners from Mascot Towers will meet for a third time and be asked to vote on the raft of proposals.
The owners corporation spokesman disputed that Lannock had offered loans between $5 million and $20 million.
“Lannock has offered terms for the works outlined in the agenda package,” the spokesman told news.com.au.
“The tender for the works is $4.3 million, not $10 million and there are contingencies and other on costs which should be taken into account which may get to $10 million, but they are contingencies.”
“Therefore, the loan agreement is for a higher amount than what is required and the owners corporation will only draw on what they require.”
Documents show Lannock Strata Finance has put together a loan proposal for between $5 million and $20 million for building defects to Mascot Towers.
Documents show repairs for phase one of the building were tendered to four different companies, two of which declined to tender. The Owners Corporation chose the lowest bidder, at $4.3 million, over a second bidder, who tendered at $7.91 million.
OWNERS TO VOTE ON WHETHER TO SUE THEIR NEIGHBOURS
One of the raft of proposed actions unit owners will be invited to vote on at the upcoming extraordinary general meeting will be whether or not to commence legal proceedings against neighbouring complex, the Peak Tower, at Church Ave, Mascot. The aim would be to seek access to the building for “undertaking inspections, works and investigations relating to the damage to common property”.
Documents show the owner of the Peak Tower has “not consented” to allowing experts employed by the owners corporation onto their property to complete tests and inspections “without placing a range of limitations/requirements which advice has been received should not be agreed to”.
The owners corporation therefore intends to sue Aland to gain access to the property, according to the minutes.
“The owners corporation appreciates the strain and stress on owners and owners are working collectively together to achieve the best outcome for all owners at Mascot Towers,” the spokesman said.
The building’s manager contacted residents of Mascot Tower last year seeking evidence that construction of the neighbouring Peak Tower had damaged their property.
Residents were informed there would be an attempt to put together the evidence for a case against the tower’s insurer. News.com.au has contacted Mascot Tower’s building manager, but did not receive a response in time for publication.
STILL NO TIMELINE FOR REOCCUPATION
An estimation in the engineer’s report suggested the building’s settlements may become more stable over the coming “three to four months”, but this has not allowed for a clear timeline of when residents and owners in Mascot Towers could expect to be able to move back in.
Rather, if the tower was to stabilise over the coming months, it would allow the engineers to assess the “risk of further damage to structural fabric of the building”, and if that is such a risk that it prevents residents moving back in.
The engineer said in the report that “no reliable time line” can be given to the residents until all investigations have been exhausted, but recommended units in one part of the building would become habitable if residents funded the first phase of remedial works.
Unit owners have already ratified a special strata levy of $1.1 million, which they paid on August 1.
Do you know more? @email@example.com
Originally published as $10m ‘gun’ to apartment owners’ heads