As at the time of writing this article, most of you have probably already heard of the problems being faced by the owners of units within the Mascot Towers complex. The residents of the towers were evacuated from their building and were only able to take the necessities with them as cracks started to appear on the walls. It has been determined that the building had begun to move which had caused the damage.
Fearing the damage is structural, only very few residents were allowed back inside of the complex to collect their belongings. None of the residents have been able to return to the building to live and have been required to find alternative accommodation. Not even Basil Fawlty’s horrible service could cause this much havoc in an apartment building!
So what are the legal implications? And more importantly, what if this was you?
The first thing that you need to be aware of is that as an owner of a unit you become a member of the Body Corporate, which is an unlimited liability entity. The risk associated with this is, if there are serious building defects that require rectification works, each unit holder must contribute towards the cost which is usually raised by a special levy.
In the case of Mascot Towers the current special levy has been requested to raise $1.1 million to cover the emergency costs alone. It is predicted that the amount to be raised could increase to $5.5 million by the time repairs have been completed.
The second factor that comes into play as an owner or potential owner of a unit, is that you will need to know your protection under the Queensland Home Warranty Scheme. This scheme is aimed at providing statutory insurance cover for rectification of defects in residential work for a period of six years and six months. For the defects on their approved list the rectification work is paid for under this scheme.
Woohoo right? Unfortunately wrong! Buildings containing multiple dwellings over three stories in height are not covered under the scheme. Most unit complexes fall within this exception and therefore the responsibility of rectification costs lands squarely with the body corporate and the owners of the lots within.
This is a good reminder of buyer beware and what to expect if you purchase a unit within a community titles scheme. Our recommendations when looking at purchasing within an apartment complex is to research, research and research! Spending a little bit more money at the purchase stage and ordering more comprehensive searches into the body corporate records, or having a lawyer review the information presented to you can save you some quite expensive headaches down the track.
If you are thinking of purchasing a unit, ask to speak to one of our friendly conveyancing department staff and they will be happy to assist you.
Lachlan Cramb | Solicitor