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The news that the NSW government is offering an open-ended, low-interest loan to the Mascot Towers owners corporation (body corporate), to allow them to pay for evacuated residents’ emergency accommodation, is much more of a game changer than the casual observer might think.
Forget the rights and wrongs of the situation, the precedent that it threatens to set for …
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Building defects and liability need to include all buildings not just those less than 4 floors. Both sides of the NSW State Government have failed in protecting strata owners. Free standing house, townhouse, low rise, high rise we should have equal protection.
How’s this for a suggestion? When we bought our unit, we had a choice of handing over a deposit of $73,000 (which could have disappeared if the builder went broke) or buying a Deposit Bond for $3,000. If you know how these work, skip the next paragraph.
Deposit Bonds replace putting up a deposit for real estate. The Deposit Bond company puts up the money for you, for which you pay them a non-refundable fee of a few thousand dollars. When you settle, they get their money back. If you default, however (if you can’t raise the purchase price, say) they lose their money – and they come looking for you to pay them.
The same basic system could be used to guarantee against faulty construction. Instead of the builder setting aside 2% of the build, he or she could pay a relatively small amount for a bond equivalent to, say 8% of the build. The bond issuer would have to pay for rectification work, and would then pursue the builder for compensation. Bond-issuing companies have the dollars and the legal muscle to get their money back.