A LUXURY Pyrmont apartment block has stood empty for almost two years, its residents relocated at a cost to taxpayers of $90,000 a month, while the Department of Fair Trading's home warranty insurance arm has delayed fixing defects and fire safety problems.
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The home warranty insurance system was supposed to protect the owners of new buildings from dodgy builders, but four years into this claim the government insurer has not even agreed on the repairs needed.
After a council declaration that the building in Bunn Street was not fire safe, the government insurer BIG Corp moved the owner-occupiers of more than half the 40 apartments out, paying their rent from money set aside for rectification work. Tenants, too, had to vacate, with no compensation to landlords. The building has been vacant since early last year.
The owners are trapped in a bureaucratic nightmare; more than $1.8 million has gone on alternative housing and there is no progress on repairs.
"We've been out of our home for 20 months because of fire issues and we're still no closer to agreeing what has to be fixed and when the work will start. It's a shameful waste," says Ros Davies, who owns an apartment in the building with her partner, Marion Hansell.
There have been mushrooms growing in damp carpet from a leaking bathroom, leaks from faulty waterproofing on balconies, and the building, completed in 2001, has unsafe windows, acoustic problems, ventilation problems and important technical breaches of fire regulations.
The owners' corporation became aware of serious defects and told the state government in 2006. The Department of Fair Trading promised they would be back in their fully repaired homes by Christmas this year.
Now the City of Sydney council has threatened a $100,000 fine for non-compliance with fire regulations when the owners' corporation advised it of the problem.
The builder, BJ Metro Pty Ltd, was deregistered in 2008. Its principals could not be found by a lawyer working for residents. Their only recourse was the government insurer BIG Corp, which was set up in 2001 to take over the home warranty policies of the failed insurers HIH and FAI.
But the owners say the system has failed them.
''We feel as though our lives have been on hold for almost five years,'' says Davies. ''Every commitment we have been given about when things would happen has passed with no action. The system is completely broken.''
The Herald understands BIG Corp has offered to repair some major problems, but the owners' corporation rejected the most recent offer as being up to $1.5 million short of bringing the block up to compliance.
Despite not being able to live in their homes, owners are still paying mortgages, rates, increased levies and higher building insurance due to non-compliance. They learnt only this year that their relocation rent comes out of a limited pool of funds for rectification works, capped at $200,000 a dwelling.
The owners' corporation has taken the matter to the Supreme Court seeking a resolution before the funds run out, but the lawsuit has been temporarily withdrawn as they wait for a new offer.
Hansell says: ''We've been screwed by both local and state politics. Neither [the council nor the government] really cares about the impact this has had on people's lives.''
The City of Sydney was the principal certifying authority in 2001, but cannot be liable for defects under the self-certification legislation. A spokeswoman for the council said its fire order required the owners to bring the building up to compliance in stages by September next year for public safety reasons.
The Department of Fair Trading did not deny the costs involved but refused to comment due to the litigation.
