With the recent news about building defects in the Mascot and Opal Towers, there’s some nervousness amongst buyers who are looking to buy into apartment buildings.
There are ways to mitigate risk by doing some research and due diligence before signing any contracts to buy.
First, when inspecting the property prior to purchase, do some research on the builder. This component is just as important as checking out the developer because this is the company that has completed the build.
Enquire about the builder’s history and how long they have been operating, as this will demonstrate their credibility within the building sector.
Next, check that there is no legal action against the builder (pending and post) and also request to inspect other developments that this company has completed. This will give you an understanding of the quality of the finishes, such as the plastering, painting, tiling, and flooring.
If you are then satisfied that the building appears to be sound and you proceed with the purchase, it is essential that the building’s strata management company undertakes a building inspection on a yearly basis.
This action will ensure that any defects can be addressed in the warranty period (tenure does depend on which state) as well as allow for documentation of the issues over time which will substantiate any claims post the warranty period.
If the strata can demonstrate that there have been ongoing issues with the building which have led to a major defect, this will assist with class actions and other legal avenues.
While most new builds (whether a house or an apartment) will have a level of defects, which is up to the owner to address, the issue with apartments is that it can obviously affect many owners, versus one.
But if you are diligent both prior and post your purchase, this will assist in minimising any fallout. And remember, with an apartment purchase you are talking about a build of ten of millions of dollars, and in that case, even more, care and checks need to apply.
Our recent research with over 3000 apartment owners nationally, showed an 86% satisfaction rate with their apartment purchase which demonstrates that while building defects, like the Mascot and Opal Towers, are often a rarity and not a common occurrence.
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