Podcast: The end of the strata world is NOT nigh

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Don't worry ... and don't believe everything you read about apartments

Sometimes it feel as if we are lurching from one strata disaster to another.  But then you take a second look and realise things are not as bad as they seem.

Take the coverage of defects in the Lachlan’s Line building in Sydney’s Macquarie Park. According to some reports, it sounded as if the three towers totalling 900 apartments were about to fall in on each other like dominoes.

In fact, it was the discovery of concrete cancer  or spalling in the joints of the beams holding up the massive podium, which sits below the huge tower blocks and broad recreational areas.

Yes, I know we referred to it as “crumbling” but “a bit of concrete cancer that can be fixed but could eventually cause a structural failure if it isn’t” didn’t fit the headline space.

The simple fact is that concrete cancer is like human cancer – it can be fixed, especially if you get in early.  But do nothing and it could be fatal.

Some of the coverage was so alarmist that it has given Building Commissioner David Chandler cause to rethink the language he and his depart use when describing fixable defects.

Talking of alarms, there has been another ebike battery fire in a unit block.  No one was hurt but property was destroyed and we are all wondering where the next one could erupt.

Finally, Lock Up And Leave returns with a celebrity chef foodie tour of Vietnam… only without the celebrity chefs or the eye-watering price tag. That’s all in tis week’s Flat Chat Wrap.

TRANSCRIPT IN FULL

Jimmy Thomson  00:00

So it’s all happening in Macquarie Park, Sue?

Sue Williams  00:02

Yes. None of it very good, is it really?

Jimmy Thomson  00:04

No. I mean, we had the story the other day, that there were serious defects in Lachlan’s Line, which must really please Lachlan Malloch, who’s basically the assistant Strata Commissioner. He’s a senior adviser to John Minns; there’s a lot to talk about. And then there’s another E bike fire in Bondi.

Sue Williams  00:30

It’s been a bad week for apartment living.

Jimmy Thomson  00:32

It has. There’s lots and lots to talk about. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.

Sue Williams  00:39

And I’m Sue Williams and I write about property for Domain and the Sydney Morning Herald and The Age.

Jimmy Thomson  00:43

And this is the Flat Chat Wrap.

[MUSIC]

Jimmy

Okay, so where do we start? Where do we start with the Lachlan’s Line?

Sue Williams  01:02

A few years ago, I went to the launch of Lachlan’s Line, and it was actually a really quite high-grade development. There were lots of young people there, looking to buy a place. The developer is Greenland, which is a Chinese company, but they’ve set up an Australian arm. They’ve done lots of press…

Jimmy Thomson  01:18

They have been around for a while.

Sue Williams  01:19

And they’ve done other prestige buildings as well.

Jimmy Thomson  01:21

I think they’ve got a big one in the city.

Sue Williams  01:23

Yes, the highest building in the city; Greenland. It’s a very thin tower. They also did the the Omnia in Potts Point, which was taken over by somebody else, or they took it over. But they were involved in it as well. So, you know, they’re quite high-end developers. They’ve got a good reputation.

Jimmy Thomson  01:42

So basically, we got the story that the Building Commissioner’s office had said there were defects in the building that needed to be repaired, and they’d been ordered to repair them within eight months. Then we had a press conference, at which David Chandler kind of had a go at journalists for exaggerating the seriousness of the defect alert.

Sue Williams  02:10

I guess he was saying that the building isn’t in imminent risk of collapse. And Greenland had disputed the defects as well and then they’d said that they will get them all fixed, as quickly as possible. So it’s kind of become a bit of a flashpoint for lots of arguments. I mean, there’s always a media war, between the Sydney Morning Herald and The Daily Telegraph, so if one of them has a story, then the other one might work to sort of play it down a bit.

Jimmy Thomson  02:37

And then there was the issue that some of the owners in Greenland are saying that Greenland knew about these defects, but didn’t tell people when people were buying.

Sue Williams  02:49

That’s right.

Jimmy Thomson  02:50

Which is kind of illegal, if it’s true.

Sue Williams  02:53

I think Fair Trading is now conducting an investigation into that.

Jimmy Thomson  02:57

And then, to top it all, the other day there was a drug raid here. Somebody had something like $700,000 in cash and guns.

Sue Williams  03:10

Which shows that it’s a really high-end building!

Jimmy Thomson  03:14

I mean, it’s not necessarily the residents who are high-end, but the apartments are.

Sue Williams  03:18

That’s right. Probably good security…. You often get alleged drug dealers, going into places with good security. Apartments are fantastic for them, because you can screen who comes in…

Jimmy Thomson  03:30

You can see who’s at the door, and you’ve got time to…

Sue Williams  03:32

Disappear.

Jimmy Thomson  03:32

Obviously in this case, it didn’t work. Maybe the police had followed the Building Commissioner’s people in, you never know. Probably shouldn’t say that; I’ll get into trouble from David Chandler. So just dialling this back a bit… The issues are in the podium level; the other supports for the podium level. So if you haven’t seen the pictures (and there is one on the Flat Chat website), it’s basically three tall towers, sitting on top of a podium, which has gardens and a swimming pool I think, and stuff like that. It looks really nice, but they found what they call ‘spalling,’ which we know more commonly as concrete cancer, in the supports of the joints of the supports for the podium.

Sue Williams  03:54

So that means the kind of metal inside the concrete…

Jimmy Thomson  04:29

Yes, the reinforcement…

Sue Williams  04:31

Wasn’t properly protected; is that right? When moisture gets in, it gets rusty.

Jimmy Thomson  04:35

And then the rust expands and it blows out the concrete and creates cracks and weakens the structure. Now, it’s not fatal and the sooner you get to it, the better. You can basically get in there, dig it out, fill the hole, strengthen it again, and no one will be any the wiser. Part of the problem seems to be that our friends at the Sydney Morning Herald made it sound a bit like it was going to be the next Mascot Towers. And to their credit, the Building Commission said nobody needs to move out; nobody’s in danger. But that wasn’t the headline. That’s the headline in the Flat Chat coverage on our website. There’s no need to evacuate. But I think the Herald may have gone in full-blast on that and then, I’m pretty sure The Telegraph were not entirely innocent in this regard.

Sue Williams  05:32

It was interesting, because David Chandler was then saying that maybe he’s going to look at the language that the Building Commissioner uses, so it doesn’t sort of inflame anxiety too much, in situations where anxiety perhaps, isn’t warranted.

Jimmy Thomson  05:50

See, I get the feeling that had he been in place when Mascot Towers happened, when the cracking first appeared there… I wonder if they would have evacuated? Because he now has a policy of making buildings safe, rather than making them empty.

Sue Williams  06:07

Well, I suppose that means getting in as early as possible.  I mean, I think Lachlan’s Line has only just been completed, so he’s got in there quickly.

Jimmy Thomson  06:17

It’s still whatever warranties exist.

Sue Williams  06:21

But it makes me wonder, does David Chandler go into every single building that is…

Jimmy Thomson  06:27

He can’t.

Sue Williams  06:27

He doesn’t have the time. He’s getting a lot more employees, isn’t he?

Jimmy Thomson  06:33

There’s something like a thousand new apartment blocks coming on stream every year. So that would be 20 a week. It can’t be done. I mean, some of them are quite small…

Sue Williams  06:47

I guess you’ve got to do a thorough investigation, haven’t you?

Jimmy Thomson  06:50

And one of the things he was saying just the other day was, there’s been a culture, if you want to call it that, in Australian strata, of if you see there are problems, don’t mention it. Sell out and let somebody else deal with the problems. And because people are quite rightly worried that the value of their apartments would go down, it might be a very good time to buy into Lachlan’s Line. He’s saying report it early; the earlier you report it, the more likely you are to get it fixed, before the developer, either their liability runs out, or they disappear, to somewhere like Lebanon.

Sue Williams  07:33

Yes, which brings us to Jean Nassif of Toplace and there’s a number of his buildings that have been identified as having defects. He’s a wanted man, but he’s now in Lebanon, which doesn’t have an extradition treaty with Australia. He’s just been spotted wining and dining in a fabulous restaurant in Beirut.

Jimmy Thomson  07:57

Just winding back that story, just to add another layer; Jean Nassif was the person that Eleni Petinos wanted David Chandler to meet and David Chandler said “not interested. I resign; if you insist on me doing this, I’m going to resign.”

Sue Williams  08:17

Doesn’t reflect very well on Petinos, does it?

Jimmy Thomson  08:19

And then she was asked to get her cardboard box and “don’t come back on Monday,” by the Premier, who oddly said it had nothing to do with this case and it had to do with some sort of abusive culture in the office, like she was being too strongly- worded in her criticisms of people. She almost lost her seat. She had an absolutely rock-solid seat, down at Miranda, and she was on the brink of losing it at the last election and then Scott Morrison, Scotty from Marketing, turned up and went around with her and got her over the line. And she is now a junior shadow minister. So she’s a woman…

Sue Williams  09:16

Who is still going places.

Jimmy Thomson  09:18

I’m sure in four or five years time, at the next election, she’ll pop up again. Which is more likely to happen than Jean Nassif popping up again.

Sue Williams  09:26

I mean, she wouldn’t be the first politician who’s been perhaps, duped by a developer.

Jimmy Thomson  09:35

Certainly not the first and probably not the last.

Sue Williams  09:39

But it does go to show how important this iCIRT system is. You know, the rating system for developers. Because if you really are not sure of a new building that’s going up, but you really want to buy in there… I think a lot of confidence in buying off-the-plan has been rocked this week, by all these stories. It would be good to go and have a look at the iCIRT rating for the developer and check that the developer hasn’t told you that he’s got a fantastic iCIRT rating, but is making it up.

Jimmy Thomson  10:08

Not that anyone would ever do that, but some of the people serving their food at the welcome desk might.

Sue Williams  10:15

From our own experience. Check on the iCIRT website and you can see which developers have got lots of stars and which developers don’t have quite so many.

Jimmy Thomson  10:25

I’m wondering if Greenland have…

Sue Williams  10:28

We should have a look.

Jimmy Thomson  10:28

We should have a look. We should have done that before we started this recording. The thing is that the iCIRT rating doesn’t guarantee that the apartment you buy will be in a building without defects, because that’s almost impossible. But what it does suggest is that if there are defects, and they’re discovered, the developer will fix them.

Sue Williams  10:52

That’s right, and has the financial backing to do so.

Jimmy Thomson  10:57

I would be very surprised if Greenland weren’t in there with four or five stars. They have a terrific reputation, actually. As you say, it’s another blow to the idea of people buying off-the-plan.

Sue Williams  11:11

It couldn’t have come at a worse time really, because we’re talking so much about high-density, about the housing shortage and how we just need more apartments and we need more people to go into apartments. So it’s kind of a real blow for governments of all the states and territories around the nation. No doubt, Victoria is watching closely, Queensland’s watching closely and they’re both quietly smiling to themselves, at the mess New South Wales finds itself in once again.

Jimmy Thomson  11:37

There’s an interesting piece in the paper today by Geraldine Brooks, the Pulitzer Prize-winning Australian author, who’s saying stop this idea of knocking down old cottages in Balmain. Let’s build apartment blocks in Point Piper. She said Malcolm Turnbull’s house is on so much land, you could build a really decent sized apartment block there.

Sue Williams  12:02

That’s funny. I mean, there are lots of apartments in Point Piper, absolutely. But yes, some of those houses on huge blocks…

Jimmy Thomson  12:13

No, you’re not going to get rid of them in a hurry.

Sue Williams  12:15

But some of those people, you could tell them how wonderful apartment living is (because generally it is), and I mean, those people will be able to afford the top two floors of any new tower that went up.

Jimmy Thomson  12:27

And they’d get the views and the security.

Sue Williams  12:32

And they’d have rooftop barbecues, with amazing 360-degree views of the Harbour. Many of the people who own those huge houses (apart from the tech billionaires), are a bit older and they want to be able to live without stairs, with lift access and things. They don’t want to do the gardening and they don’t want to have to do all the maintenance, so apartment living would really suit them.

Jimmy Thomson  13:03

I think if you’re talking about Point Piper and Vaucluse and places like that; even if you wanted to build an apartment block on your plot of land, I have a feeling the neighbours might have a problem with it.

Sue Williams  13:18

But maybe you get on well with your neighbours and you could all get together and say “yes!” Can you imagine the strata committee; the arguments?!

Jimmy Thomson  13:27

Well, one of the first strata stories we ever heard, was about two captains of industry, who had apartments on the same floor, and one of them wanted the carpet to be vacuumed in one direction, with the pile sticking up and the other one wanted it to be vacuumed in the other direction, with the pile lying down.

Sue Williams  13:46

It went all the way to court.

Jimmy Thomson  13:47

All the way to the Supreme Court, yes. That’s partly because it was a company title, so they have to be decided in the Supreme Court, or they did then. But yes, the irresistible force and the immovable object; there’s so many of those stories through strata. So the message about Lachlan’s Line is, don’t panic. The smart money is probably on having a look at what’s for sale there in the next month or so, before it all calms down again. Jean Nassif is having a great time in Lebanon, which is more than a lot of Lebanese people are having.  And the residents of his buildings, as well.  And we can expect to hear from Mr. Chandler that there’s going to be a new codification of the warnings that they put out, when they say that a building needs repair and the thing about concrete cancer is, it’s not the developer; it’s not even probably the actual builder. It’s been the tradies at that level, who have been a bit slack.

Sue Williams  14:54

And the supervision of those people.

Jimmy Thomson  14:57

And the developer says they’re going to fix it, or get it fixed, because they’re blaming the builder, obviously. But yes, everybody calm down, go back to your seats, and we’ll carry on. When we come back, we’re going to talk about the other big issue in apartments, which is electric bike battery fires. That’s after this.

[MUSIC]

Jimmy

So we’re recording this on Saturday, because it’s, what are you calling it? Rum Rebellion day? Is that what you’re calling it, after your column in the Herald the other day?

Sue Williams  15:35

Well, January the 26th, Australia Day, is also the anniversary of the shameful Rum Rebellion in Australia and I was kind of likening it to the assault on the Capital. So yes, that was my column and I got lots of abuse about it. Being told to “f-off, you wokey.” But then other people wrote with differing views on it, and sometimes the same views, so it was interesting. But yes, it is Australia Day week next week and we’re going off to New Zealand, to do some work.

Jimmy Thomson  16:10

Not to escape in any way; to do some serious work. In any case, being a Scot, I think of it as Burns Night, Robert Burns birthday.

Sue Williams  16:22

January the 26th?

Jimmy Thomson  16:23

The 25th, but the 26th here, is the 25th in Scotland.

Sue Williams  16:28

Oh, I see; it’s a big day!

Jimmy Thomson  16:31

‘Fair fa’ your honest sonsie face, Great Chieftain o’ the Puddin race!’

Sue Williams  16:37

Okay, I can’t match that!

Jimmy Thomson  16:38

So, electric bikes… As I was saying, we’re recording this on Saturday; overnight there was a fire in a unit in Bondi. A few weeks ago, I ran a piece in the Flat Chat website about the number of electric bikes outside hostels. There was a fire in a hostel in Kings Cross and that was again, food delivery riders. It seems to be that especially backpackers and people coming into Australia; they’re looking to go into share flats or hostels, because they’re working as delivery riders at night, on electric bikes. Where are they charging them up? Now, I don’t think that this is a huge issue for the majority of apartments, because the proportion of electric bikes and electric scooters, like what you’ve got, is quite small, but it’s a concern. So this is a fire; there were four young blokes in this apartment. It was the exploding batteries that woke them up. Two of them got out the front door and then two of them climbed out onto the awning and got out that way, out the window.

Sue Williams  17:54

How terrifying!

Jimmy Thomson  17:55

Absolutely. A couple of things strike me; the door to the apartment had one of those automatic closure things that we all have and it slammed behind the first two when they got out, thereby saving the rest of the building from the smoke. It contained the fire and the smoke.

Sue Williams  18:17

But did the other two try and get out the same way?

Jimmy Thomson  18:20

They did, but there was too much smoke, so they went out the window. There was a small fire in a flat somewhere; I think it was Baltimore, or Boston, or Chicago, or New York? And lots of people died in it. This was last year and the reason they died was from smoke inhalation and it was because the guy in the flat where the fire had started, had grabbed his kids and ran out and left the door open. Presumably, if it had… A lot of people will disconnect their door-closing devices, because of door slamming. In this case, it wasn’t connected, or it didn’t work and it was the smoke that went through the rest of the building that killed people. It’s a lesson for people who jam doors open, who disconnect their door closures. They actually work; they actually save lives and this is a very good example of how that happened. The apartment was gutted by the fire. These guys lost everything, including their passports. The shop and the other apartments weren’t affected.

Sue Williams  19:32

Wow, that’s amazing, isn’t it? So even if door slamming is an irritation, you can get them adjusted, can’t you, so that they soft-close a bit more?

Jimmy Thomson  19:42

We have regular fire inspections in our building and the fire guys come around and just crank up the adjustment. So it was on maximum slam every time and then the building manager would come around and readjust them back to a reasonable level. I eventually told the fire people “you have got to just stop doing it;  it’s counterproductive and you know, we’ll adjust them to a safe level.” But what do we do about electric bike batteries?

Sue Williams  20:12

The OCN has tackled this issue, haven’t they?

Jimmy Thomson  20:14

They’re having a webinar in the middle of next month, and the details will be on the Flat Chat website. And also, they’ve put together a bylaw, that you can adopt at a general meeting. I’m not sure what it says in the bylaw; I’m sure it has things like ‘you may not leave the battery charging unattended.’

Sue Williams  20:17

That makes sense, doesn’t it?

Jimmy Thomson  20:20

How you would police that?

Sue Williams  20:37

But even if it makes people think twice, because as you say, I’ve got an E-scooter; I would never charge it up and go out now, because of what’s happened elsewhere. So I’m just much more aware of the situation now and when I power it up; it’s on the balcony, so that I could close the door if anything happened. And before, that wasn’t an issue; I might charge it up overnight in the corridor of the apartment. But now I’m so much more careful and I think publicity about these things is good, because people are aware and they know not to buy cheap batteries, or cheap chargers that aren’t the same make as their batteries.

Jimmy Thomson  21:26

And it does come down to these young people especially, who have multiple bikes, with different batteries and sharing one charger, which may not be ideal for the battery that they have. I can see some buildings banning them, just saying ‘you may not take your electric bike battery into the apartment. If you’re going to charge it, it has to be in a safe place.’

Sue Williams  21:53

And providing a safe place, maybe? Although providing a safe place is a bit difficult, isn’t it really?

Jimmy Thomson  21:59

There was a big fire at Sydney Airport a few months ago and it was a battery that had been disconnected and it shouldn’t have been.

Sue Williams  22:08

Was that a bike, or a car?  Jimmy, do you have a recommendation of a ‘lock up and leave’ for this week?

Jimmy Thomson  22:09

It was a car. But that car burnt out about four other cars next to it. So you know, can you imagine if your charging point is a garage of your apartment block? Not ideal. So anyway, keep an eye open for that webinar, that OCN webinar. When we come back, we’re going to talk very briefly about ‘lock up and leave,’ our recommendation for this week.

[MUSIC]

Jimmy

 I do. Now you won’t be surprised to learn that it’s Vietnam; Luxury Escapes. Last year, there were these fabulous videos on the Luxury Escapes website, of the Master Chef chefs, who were doing a guided tour of Vietnam; a foodies tour of Vietnam, from street food to high-end restaurants. And they were going to be there on the tour. I remember vividly, the film of them in Hanoi. I could see my usual hotel in Hanoi right behind them and that is a terrific spot, because there’s lots of great food there. So they chose well. The thing was so popular,  it went on around midday, and by about five o’clock, they’d taken it back down again, because a. they’d booked out and it wasn’t cheap. It was about $12,000 for a 14-day tour, or something like that, which is very expensive by Vietnam standards, but I think it almost crashed their website; they had so many people coming on to watch the video. So that was good news for Luxury Escapes. But now they’ve taken basically all the research that Matt Preston and Gary thingy (I hope he’s not listening to this), that they had done to build this tour. And they’ve taken all that research and now you can do the tour, but they’re not there and it costs less than half of what it would have done, if they had been there.

Sue Williams  22:56

Following in their footsteps, aren’t you?

Jimmy Thomson  24:08

Very much so; following their recommendations and stuff like that. And you know, the tour guides will be pretty savvy with what they’re supposed to do. So that’s my ‘lock up and leave’ for this week.

Sue Williams  24:41

The food in Vietnam is quite incredible, isn’t it?

Jimmy Thomson  24:43

If I was allowed to go to Vietnam again (because I was there three times last year)… Do you remember that hotel where we stayed in Saigon, The Myst Dong Khoi? Remember coming back; the afternoon tea was just amazing, because it had that lovely combination of local Vietnamese and French pastries. And the breakfast; you had your European breakfast, you had your French breakfast, then you had your Vietnamese breakfast. It was terrific. I’m sure if we could afford to go back there again, it would still be.

Sue Williams  25:10

Maybe we might be able to go back.

Jimmy Thomson  25:41

We shall see. All right. That’s us. Thank you, Sue, for taking time out of your weekend this time, to contribute. And thank you all for listening. We’ll talk to you again soon.

[MUSIC]

Jimmy

Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website flatchat.com.au. And if you haven’t already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, or your favourite pod-catcher. Just search for Flat Chat Wrap with a W, click on subscribe, and you’ll get this podcast every week, without even trying. Thanks again. Talk to you again next week.

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      Sometimes it feel as if we are lurching from one strata disaster to another.  But then you take a second look and realise things are not as bad a
      [See the full post at: Podcast: The end of the strata world is NOT nigh]

      The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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