16 August 2017

Buying an apartment? Read the contract...

| Paul Costigan
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When I was first alerted to the issues below – sadly my response was: Why am I not surprised?

There are too many stories in this town about the goings-on with the building of apartments – and with the proliferation of apartments (not necessarily a bad thing), one cannot help but wonder about the extent of problems that are going to surface in the near future.

Here’s one of those stories.

When a group of residents and potential residents attended a community consultation about the next stage of an apartment complex, one resident asked questions about the ‘variations’ that were being made to the apartments still under construction (and nearing completion).

His list of ‘variations’ amazed other buyers and a group has been formed to see what can be done about these previously unknown changes. So, as I write this, those conversations with the builder and developer are ongoing.

As one said, we are paying Rolls-Royce prices for these apartments and it looks as though we might be getting a Mini (no disrespect to the makers of the Mini).

Everyone would agree that variations may have to be undertaken – but this should be in consultation with the buyers and should not be undertaken ‘behind closed doors’ to obtain simple cost-cutting.

It would be easy to say ‘buyer beware’. But there is more to it than that simple response.

Buyers normally think that they access to plans but they are not the detailed plans that get submitted to the Planning Directorate. In this case, a lawyer had to subpoena the detailed plans for the purchaser.

Access to the site is forbidden. So the buyer or their agent, even under special conditions, cannot get to see how the build is progressing and whether what is being paid for is being supplied.

The buyer who asked the questions had obtained evidence of the final fit-out and all other residents present were amazed at the difference to what they were expecting to see on the day when they would be allowed in for the final inspections.

And it must be noted, this evidence was about what could be seen in the final fit-out – not what was already covered up – so buyers will have to take the word of the developer that the materials now not visible are what they were supposed to be.

Here are a few examples: A laundry that was supposed to include a bench, with sink and space for a washer etc, had become one of those cheap tin sink units anyone could buy from the local hardware – and it looks as though the taps for the washing machine/dryer are missing. The vents (bathroom and laundry) that were supposed to travel through the ceiling to an outlet were left well short of the outlet and so were going to be pumping steam and the like into the ceiling cavity.

The bathroom cabinet was meant to be recessed; it wasn’t and instead poked out over the top of the sink. And, a last example (there are more), was that the designer glass shower panel in the glossy brochures had become one of those cheap glass doors you see in most motels (that do not quite fit properly).

So where are the building inspectors who should be checking the various stages? Have we heard these stories before? Yes – constantly. How is it that developers set out a glossy version of what they are to build and constantly deliver something less?

My sympathy goes out to the buyers who have paid premium prices for what should be top quality. This next stage (having to confront the developer) will be an unnecessary stress for the new owners who now have to act collectively to convince the developer/builder to not play games and to deliver against expectations.

Generic apartment shot. iStock

Canberra is to have far more apartments on offer in the years to come and yet we currently seem to have a government or a planning regime that does not take these matters seriously.

The message is:

Yes to building more apartments and supplying more accommodation options for people living in Canberra – noting that Canberra has always had a wide range of residential options.

The problem today is that while there was a period a decade or two ago when these residential options (apartments and townhouses etc) were offered, there was a much better building standard enforced.

Asks any real estate agent, would you buy into one of these new apartments or would you look for one that is at least a couple of decades old?

The immediate fix?

  • Off-the-plan contracts need to be changed (through legislation) to close up the loopholes around ‘variations’.
  • Something has to change to allow access to the site while it is still under construction so that buyers can get independent inspections undertaken and checks made on what is being supplied.
  • There is a serious need to revisit how and when and who conducts the scheduled building inspections.

Let’s have apartments – but it would be very much welcomed if this government looked after the residents (and potential residents) and ensured they received the quality they are paying for and have expected.

Have you had any problems with variations? Do you think more needs to be done to protect the buyers of apartments under construction? Let us know your thoughts in the comments below.

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bringontheevidence said :

Biggest recommendation to make when buying off the plan is to go with a reputable and established developer and go and see one of their previous buildings first. Also if possible speak directly with anyone you know who has bought an apartment in one of their previous developments.

You can still be unlucky.

Our builder has been established for over 20 years (so not a phoenix scam company) and Google found a few reviews, some of which were glowing (we suspect posted by his staff) and some of which were not great (a bit slow and designs not cutting edge etc) but not red flags.

It wasn’t until things went pear shaped and we resorted to walking around the suburb to find houses using the same builder that we discovered the builder apparently limits bad reviews by threatening legal action against people who post them, and in some cases when the person stands up to him, he threatens the websites with legal action.

As he had a large Kingston Foreshore development about to start, he was very protective of his public image.

bringontheevidence6:21 pm 17 Aug 17

Biggest recommendation to make when buying off the plan is to go with a reputable and established developer and go and see one of their previous buildings first. Also if possible speak directly with anyone you know who has bought an apartment in one of their previous developments.

I’m buying off the plan and blanco appliances are specified. I rather hope they change them. Blanco are utter garbage, fidgetty, quick to fail the minute they pass their warranty date. I don’t mind though. I’m saving a fortune as the purchase price is very low ($280k), and appliances can be replaced with a better make & model easily and cheaply when they start to fail.

This isn’t surprising. At all. I’ve had friends by off the plan only to find that there were numerous problems which were not justified. The ability of builders to vary from what’s specified in the contract is one of the reasons I absolutely won’t be anything off the plan. The “built it as fast and as cheaply as possible” attitude that’s pervasive in Canberra is the other reason.

Sharlene Cohen2:42 pm 17 Aug 17

We see these kind of problems day in and day out we are a property inspection company who inspects these properties independently for the buyer. I will just clarify when you say “building inspector” in this story I think you mean “building certifer” they are 2 very different people and at the moment by calling them a building inspector you are actually saying the building inspection industry is at fault (FYI). Also a building certifier will typically not identify issues with inclusions, quality of trade work etc they are more looking at the building structurally and built in accordance with standards etc. But moving on we carry out New Construction Handover Inspections and 90 Day Defect Liability Period inspections for the buyers/owners of units and we also do the same for new homes but with new homes we can do Stage Inspections as well which as you mention in the story is not an option in the unit arena. The problems identified are common place. The developers/builders/agents only give the buyers 20 minutes to view the property prior to handover and we only have the same amount of time and in some instances they will deny access of a building inspector (not building certifier) they block us – what are they hiding. If anybody needs any advice or help you can call Surety Property we are hear to help.

Scumbag builders are very well protected by Government and professional bodies in the ACT. It is blindingly obvious and well known by everyone associated with the industry – except apparently to those who could change things for the better.

Even when you have overwhelming evidence (as we did) that your builder is crooked it is almost impossible to do anything about it.

Such builders are well aware of this and can behave as they want, safe in the knowledge it is almost impossible for the average owner to take any real action.

In our case we tried everyone from a Federal Minister to ACT ministers to Government Watchdogs to Professional Bodies.

The responses ranged from nothing to “We asked the builder about this complaints and he denied them so that is the end of it”, to “Yes that is clearly fraud but this organisation can’t do anything and probably no other organisations will be interested”

And our complaints were all backed up with emails between us, the builder and our solicitor, which supported our claims.

There are some very good and honest builders in Canberra, and it is great if you find one.

On the other hand, if you get a bad one, then prepare for your faith in our legal system and consumer protection to be destroyed.

And keep remembering that to these builders and the bodies that claim to regulate them, you and your money are merely a resource that gets ground up by the system. It doesn’t matter to them if you get ripped off because as long as your money goes in, the system keeps running and they are happy.

Holden Caulfield8:08 am 17 Aug 17

This sounds like a series of unfortunate events and I hope the owners get a satisfactory resolution.

I do agree that some level of site inspection during construction should be allowed.

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