Award-winning Landmark building at Charlestown has some problems
Newcastle Herald
Joanne McCarthy
09 March 2018
THEY call it the Landmark – a $24 million commercial and residential
building on a look-at-me location at Charlestown that won a NSW Master
Builders Association excellence in construction award in 2009.
But nearly 10 years later the Landmark is in trouble as the NSW
Government is criticised for doing too little, too late to protect unit
owners, while supporting a unit development boom across the state.
The Landmark’s developer/builder – high profile Belmont businessman and
Hunter building industry director Peter Durbin – has wound up his two
companies behind the project after legal action by its 59 unit owners,
most retired and many on pensions. It’s left them with the bill to
repair significant defects costed at between $730,000 and $2 million.
Some are considering reverse mortgages to meet the unexpected special
levies of at least $10,000, and up to $40,000, with the possibility of
more special levies in future in addition to regular maintenance costs.
Many told a recent tribunal hearing of the stress of being forced to
bear the “enormous cost” of repairs for long-standing defective works
which led to internal divisions among building residents.
“The law is not protecting purchasers,” said Aidan Ellis, whose
penthouse unit with spectacular 270-degree views has severe water,
corrosion, noise, insulation and cladding problems and a wrap-around
balcony with serious defects, where the repair bill must be shared by
all owners because it is common property.
“It’s not a question about buyer beware. The fact is the current system
we have doesn’t hold anybody to account when things go wrong. And the
cost is all back on the unit owners,” said Mr Ellis.
It’s not a question about buyer
beware. The fact is the current system we have doesn’t hold anybody to
account when things go wrong. And the cost is all back on the unit
owners.
—Aidan Ellis
Peter Durbin is not denying the Landmark has problems. “I think it’s a
clear fact there’s some defects in the building,” he said on Wednesday.
But in a statement on Thursday he distanced himself from the Landmark,
saying he “participated in discussions with the owners concerning the
possible resolution of the matter by agreement” until late last year
but “regrettably, it was not possible for an agreement to be reached”.
“The ambit of the claim being pressed by the owners was such that (his
company) Nelson Bay Building could not continue to meet the expense
associated with responding to it, and the company therefore entered
into liquidation,” Mr Durbin said.
Nelson Bay Building was wound up by Mr Durbin, as sole director, in
October last year and a liquidator was appointed. In his statement Mr
Durbin confirmed the creditors were other companies owned by him that
were owed $128,000.
“The owed monies are effectively to myself and companies I operate,” he said.
He confirmed unit owners could not make home warranty insurance claims
because the residential part of the Landmark building is above the
three-storey minimum where apartments are not covered by the insurance
under NSW legislation.
In January the NSW Government announced a new developer defect bond
scheme requiring developers to post a 2 per cent bond with NSW Fair
Trading that can only be returned if no defects are found after two
years.
Minister for Better Regulation Matt Kean said the new law was the result of “extensive industry consultation”.
"I think it’s a clear fact there’s some defects in the building."
—Landmark developer/builder Peter Durbin
But critics say the bond is too low, the time frame too short to
identify some serious building defects, the inspection system could
lead to conflicts of interest between inspectors and developers, the
scheme includes a loophole potentially exempting many projects and the
scheme does not address the bigger issue of when builders and
developers make companies insolvent.
Landmark documents show that by 2009 – as the building was winning a
state excellence in construction award – a defect report was
commissioned followed by another in 2011. The documents show that at
least for a period in 2010 Mr Durbin was on the Landmark’s building
management committee.
On November 20, 2014 the Landmark’s owners corporation took legal
action against Nelson Bay Building and Mr Durbin’s development company,
Kingston Piazza. Less than a month later Kingston Piazza – with Mr
Durbin as sole director – applied for voluntary deregistration of the
company and Kingston Piazza ceased to be a defendant in the court case.
In February the NSW Civil and Administrative Tribunal found the
Landmark’s strata committee had breached a section of the Strata
Schemes Management Act by failing to repair “clear” and “significant”
defects requiring remediation which had been “known for some time”.
But the tribunal declined Mr Ellis’s application to have the strata
committee replaced with a strata manager and found the committee had
not acted unreasonably in trying to seek a lower quote for repairs
after a quote of nearly $2 million to deal with urgent works.
Strata committee spokesman Mr Barry McCulloch said unit owners had to
pay two special levies so far for $730,000 of repair works.
“It’s quite a slug, especially for the elderly. A lot are on pensions.
We’re just trying to keep the levies down as low as possible,” Mr
McCulloch said.
Mr Durbin said he was “not aware of any special levies that are occurring as I am not an owner in the building”.
Mr McCulloch said unit owners had complained to the Australian
Investments and Securities Commission after Nelson Bay Building was
liquidated, but ASIC replied that “these type of disputes are best
resolved through communication with the insolvency practitioner
appointed to the company, and not with formal intervention by ASIC’s
investigators”.
ASIC, like other government authorities contacted by the Landmark unit
owners over the years, had offered “sweet bugger all”, Mr McCulloch
said.
Asked to comment on Mr Durbin’s response to the Landmark’s problems, Mr McCulloch said: “You couldn’t print it.”
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