PODCAST: Mascot Tower crisis brings defects closer to home

For obvious reasons, our podcast this week is about the Mascot Tower crisis. We recorded the podcast before we were aware of the story in today’s Financial Review revealing that the developer and builder of the property next door, as well as the local council,  were already facing legal action because of disturbance caused by the construction of another residential  tower in the adjoining lot.

Anyway, our podcast explores a number of other issues, including what we can do to  prevent this from happening again, and what we should do when it inevitably does.

You can listen to the podcast just by clicking the play button.  And if you prefer to read, a lightly edited transcript of the podcast is further down the page.  Enjoy!

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PODCAST #28 – A Transcript

JIMMY:   Cracks appear in another apartment block in Sydney and residents are evacuated at the last minute. What can we do to stop a crisis turning into a catastrophe? I’m Jimmy Thomson. I write the flat chat column in the Fin Review and edit the Flat Chat website ..

SUE:     And I’m Sue Williams, journalist and author.

JIMMY:   And this is the Flat Chat Wrap.

MUSIC

JIMMY:     Okay, Sue. We just had another example of of cracks appearing in a building. People turfed out onto the street, not able to take their belongings or their their pets or whatever. What do we do? What’s happening? What’s going on?

SUE:     It’s horrendous that this could happen again, isn’t it, so close to Opal Tower? It’s just unthinkable, but then it makes you think that how many other blocks are there, with cracks, waiting to be discovered as well.

JIMMY:     Well, when you think about it, the government is saying, oh, we’re going to tighten regulations, which they said they were going to do after Opal, but even if they had, even if they’d brought in their building commissioner that they’re talking about, would it really have made any difference? I don’t think so. This was always going to happen when it was going to happen.

SUE:     Right. It’s very difficult to say because I guess the inquiry hasn’t found out exactly what the problems are yet. They haven’t discovered who is responsible? It’s always hard when you’ve got developers using subcontractors, you know, are they actually supervising them well enough and they probably aren’t. One has to think, and at a time we’ve got so much self certification, that seems to be a huge issue as well.

JIMMY:  Well, certainly at the time this was built, back in the bad old days when the developers were allowed to choose their certifier. If they knew what was good for them, the certifiers wouldn’t not certify a building. We can’t assume that’s what happened in this case. We shouldn’t assume anything really until more investigation has been done. My theory is that the combination of possibly poor building, possibly the building next door has been blamed and it’s sitting over the airport railway line. So there’s constant rumbling of trains underneath. I don’t know if they even hear them, but you know all these tiny little things, it’s the butterfly beats its wings on the Amazon and it causes a storm.

SUE:     So no, that’s right. But in the meantime you, you’ve got to feel terribly sorry for the owners and the tenants who kind of been left in limbo really not knowing what’s going to happen. Obviously the tenants having to pay rent to live in places elsewhere, owners who were living there or having to find alternative accommodation. This is a terrible situation in the 21st century in Sydney and if we get a reputation for our buildings crumbling, that’s going to be awful for the future.

JIMMY:     Do you think that this is likely to be the last time we see this in the next year or so?

SUE:     I certainly wouldn’t put money on that.

JIMMY:     I reckon these things are cyclical. At the very least, the regulations that pertained when that building was being built also applied to another whole bunch of buildings elsewhere. There was laxity in the whole certification thing and the building practices or maybe they were pushing the envelope a little bit in terms of what could be done and they thought would be structurally sound. All the builders, all the developers would be using the same set of criteria. So I think there’s a generation, if you want, of buildings that could be at risk.

SUE:     You’re quite right. And it was interesting because the government said, well this is a very different situation to the Opal Tower because this building was built in 2008 and Opal Tower was built in 2012 and I thought, “Hey, it was only four years!” How can you say it’s a completely and utterly different situation.

JIMMY:     Well Kevin Anderson, you know who, who is from Tamworth Fair trading minister.

SUE:     Fair trading minister.

JIMMY:  He started going on about the strata corporation and I’m sure a lot of people were going “whaat?” is that right?

SUE:    Cause he was saying, yes, we’re going to talk to the owners and the strata corporation.

JIMMY:     So who are they? Who is this body? Look, you’ve got to feel sorry for the guy. He’s got something like 55 different pieces of legislation that come under his remit as well as Fair Trading. And we’ve said many, many times that Fair Trading should have its own exclusive ministry, but nobody cares.

Nobody in the government cares did it still hasn’t got to them that there are huge numbers of people living in strata in New South Wales and in Sydney especially, and it’s kind of like, yeah, you can be with the guy who looks after broken toys and broken kettles and dodgy mechanics and, and that can all come under the same umbrella. Like there’s never any problem in those areas either.

SUE:     But these are people’s homes. We’re talking about the biggest investment of their lives. This is a huge issue and it should be taken really seriously.

JIMMY:     When Minister Anderson said today that there was a crisis of confidence in the building industry, I think there’s a crisis of construction. That’s what the crisis is. Nobody’s checked, as you said, nobody’s checking the subbies. And as we know from our own experiences over the years, the developer comes in and puts a plan to council and gets the architect to draw the drawings up and everything looks fantastic. And then the next thing the developer does is to say, how can I maximize my profits? So the developer goes to the builder who offers the lowest cost to actually build a building. And then the builder goes to the subcontractors and they each individually get squeezed on how much they can charge for constructing the building, putting in the tiles and putting the flooring in, putting the lighting and whatever. And that’s where the squeeze on happens because these guys start cutting corners because they got to make a profit as well.

SUE:     And there’s no overall oversight of the whole building or the whole actual process.

JIMMY:   No. After the opal crisis, they were talking about the certifiers being to blame. But certifiers don’t go into the buildings. And in fact, in some companies they are told, don’t even park your car outside the building because somebody will say, you must have been in there. And as soon as they set foot inside the building, then they become responsible for anything that they might have checked.

So what they do is they sit in an office and they get the the report from the plumber and the plumber says, I checked my work and it’s fine. And they go right. Check that’s, that’s been checked. That’s what certifiers do. You can’t blame them. You can blame the system because maybe they should be going into buildings and checking, but they’re not.

SUE:    No, that’s right. They’re just kind of paper shufflers really aren’t they. And most people would thinkthe certifiers will go and actually check every single thing that’s happening in the building and make sure it’s done properly. And that’s not what certifiers do at all. So maybe it should be,

JIMMY:  Maybe it should. Building engineers should be going in. Yeah. At some stage and should be checking the concrete pour. And they should be even looking at the architect’s drawings and saying, you know, is this even possible? Because if the architect has misread the load that goes on a certain element in the building and that load turns out to be higher than allowed for, that’s when cracks literally start to appear as we saw with the Opal Tower.

One element that came in there wasn’t strong enough to do the job it was supposed to do and that just just spreads, cracks, start appearing, Floors start shifting and people get thrown out in the street.

SUE:    But now that we have an official crisis of confidence maybe developers will start putting a bit pressure on the government to try and improve the system a little bit, Obviously it’s going to hurt developers because people are going to have a lot less confidence in buying apartments, new apartments.

And this is going to be a huge problem with so many of us living in apartments. Maybe we should be out in the streets demanding and the building commissioner and a new set of regulations.

JIMMY:     Well at the moment people are out in the streets demanding to get into their homes and get their cat. But you know, in all seriousness, they should possibly be a moratorium on all new buildings. Just stop work. Now let’s get engineers in there. Let us stop this happening in the future. But can you do anything about the buildings are already at risk?

SUE:    And it’s interesting because we love commissions of inquiry, I think in Australia and they are fantastic. But then they write these massive reports, they have all these experts talking to them and then the reports just get filed and nothing ever happens. So you kind of think, well, what is the point of having a commission anyway? A Royal Commission? Some people have been calling for that.

JIMMY:   I also think that the government has to take responsibility. I mean, if you look at ultimately who is responsible for these buildings that are cracking and there are other buildings around and as we know there will be buildings that have problems and they’re saying nothing there. Strata committing know that there are problems in the building and they’re either hoping they can quietly fix them or they’re thinking, let’s sell out before people find that the building’s falling down because as soon as the word goes around, there’s building is suspect.

Then, you know, the value of the property just plummets to almost zero. As we saw in the Opal tower, people were being offered half the value of the apartments to sell out. And I think some people were taking it too.

SUE:     You can’t blame them, really, it’s heartbreaking.

JIMMY: Well, it’s not just that you’ve lost the value of your apartment, it’s the nightmare that lies ahead of you as you try and get some sort of compensation.  It’s that complex and that difficult. So I think the government has created the environment that has allowed this to happen. They have to come back and set things right. They have to compensate people.

SUE:     They’re the ones who make all the stamp duty on apartments.

JIMMY: They make a lot of money on apartments. And let’s not kid ourselves, one of the reasons that over the years they’ve been so free and easy with developers apart from taking … I almost said “bribes”.

SUE: Donations.

JIMMY: Apart from taking donations for the party – which I don’t think they can do anymore – that stamp duty is a big input into the government coffers and that’s what they’d been looking at. Let’s get as many homes built as possible because that’s revenue for us. Well you know it’s just not acceptable. If the other side of the equation means people’s apartments are falling down around them, you can’t have revenue without responsibility, really.

JIMMY: You would hope not, but it seems that you can because the government is making noises and so far doing nothing and the people who will ultimately pay are the owners of the buildings. They will pay now in terms of being thrown out of their homes and they will pay later when they have to fix it. Unless they can pinpoint one other body or one other individual group or company and say, you are responsible, you have to pay for it.

And that’s assuming that that company still exists, because often when these things happen, they just disappeared in a puff of smoke.

Okay, when we come back after this break, we’re going to talk about the tenants and how they suffer, especially in these circumstances.

MUSIC

JIMMY:    So this morning, a spokesman for the Tenants Union was pointing out that the people who really suffer in these crises are the renters, the tenants.  Although if we will look at the Opal tower, a lot of those, funnily enough, were Airbnb guests.

SUE:  Revenge is sweet, I suppose.

JIMMY: And we look at Mascot, a situation where, you know, the local council is putting people up in the town hall and people are finding apartments and serviced departments.  Serviced apartments, even Airbnb cost a lot more than a weekly rent in an apartment block.

So who’s going to pay for this? Who’s going to pay for the difference? Well, I guess the tenants are, unless the government agrees to come to the party or unless they find somebody responsible.

SUE: Yes, the tenants, they’re going to be really out of pockets. And many of them have pets … we saw pictures of them coming out of the building, you know, with pet carriers and things. So yeah, when you’ve got a pet, you can’t really go and stay with family or stay with friends. You’ve got to kind of take whatever other accommodation you’re offered.

JIMMY: And a lot of hotels will not allow pets as well. I know some Airbnbs wouldn’t allow pets. So you’re really stuck. And then I imagine that some people are exploiting this. I hear that at the Opal Tower for instance, there are some landlords are saying, well, the fact that you can’t get into your apartment is not our fault. You still have to pay your rent.

SUE: Oh my goodness!

JIMMY: Now even though the law says that the place has to be habitable and the rent can be reduced to zero if it’s uninhabitable, but you’re still getting landlord saying, well, we’re going to take you to court.  We’re going to take your bond and all the rest of it.

SUE: How horrendous.

JIMMY: Just to add to the problems … but even if the landlord says, okay, I will get compensation from whoever; off you go and find somewhere else to live temporarily – it’s still an extra cost. It’s not just a hassle. That’s an extra cost and nobody is looking after the tenants.

SUE: The tenants union is taking a position on their behalf.

JIMMY: I can’t remember the gentleman’s name this morning on the radio, but he was saying, you know, there should be a fund that the government can dip into and say, look, we will subsidize your accommodation until the situation is resolved and then we will pursue the person who’s responsible or the company who’s responsible and use that to put money back into the fund …

SUE:  On their behalf. Yes.

JIMMY:  But you know, the government suing developers, it doesn’t sound like it’s on their dance card, at all, does it?

SUE: No, not at all.

JIMMY: Especially this government.

SUE: Yeah, absolutely. And we don’t have another election for a few years.

JIMMY: Four years.. Look, it would be great if the, if some of the noises they’re making about finding out who’s responsible and making them pay up actually turn out to be true. But in the meantime 50% of residents in apartment blocks are tenants and that’s a huge number … reasonably, half the people in that mascot building are renters.

They paid the rent, now they got to find somewhere else. If they’re tight for cash, they’re in a lot trouble. They don’t all have families to go to. Having a mattress on the floor of the town hall may not be inappropriate option for them.

SUE: Especially when they have kids.

JIMMY: I’ve written an article for the Flat Chat website about how every building should have catastrophe planning.

SUE: That’s a very good idea. Nice. Especially if this is going to become a regular occurrence.

JIMMY: We all have posters up in our buildings that say in the event of a fire, go out here, go at one of these doors and everybody gathers here, you know, far away from the building, which nobody does by the way, when the fire alarm goes off. But at least it’s there.

But if there was some sort of document that gets prepared, gets agreed at, the AGM gets updated every year in terms of costs that says something like, okay, here are the protocols in the event of evacuation. This is a number to call.  Here are the potential accommodation options. This is the process, the protocols that we would use so that rescue services can go in and get your pets or your medication or whatever, that kind of thing. So it’s there … it’s written down so that there’s no running around, with people trying to reinvent the wheel every time it happens.

SUE: Insurance companies could draw up a template to help buildings.

JIMMY:  On the subject of insurance, I think people were assuming that this building and other buildings like it would be covered. The Opal building is covered by warranty because it’s new, but a building that was built 11 years ago is not covered by any warranties. And my understanding is that for strata insurance to kick in, it has to be related to an event.

SUE: Right, if there was an earthquake or something.

JIMMY:    To illustrate the difference, if trucks rumbling past every day had caused the building to crack, that would probably not be covered. But if a truck slewed off the road and went through the shop on the ground floor, then that would be covered because that’s an event, a catastrophic event.

Which brings us to another thing, the shop owners, there’s three businesses there that are closed. Who’s going to compensate them?

SUE: I saw them on TV the other day and they looked very distressed. They’re quite new businesses as well. That’s very hard for them.

JIMMY: They’re saying, look, our part of the building isn’t affected. Why are we being forced to close? And it’s a very good question. And again, there’s no protocol there that says, look, if this part of the building is considered to be safe and access to it is safe then people should be allowed to use it.

SUE: So the shop could stay open.

JIMMY:     But we’re very defensively protective in these situations where we go, nobody can do anything in case somebody gets hurt. And that’s kind of overkill in a way.

SUE: Also it’s not taking into account people getting hurt financially. That can be an enormous stress on those people.

JIMMY: Absolutely. It’s a complicated situation. This is a two-part problem.  The first is, what do we do about the future? The buildings that are going to be built and completed in the future. Secondly, what do we do about right now? And that means the people who are affected now and the people who may be affected, if this is repeated and how can we help them, how can we protect them?

SUE: Absolutely.

JIMMY: Now, in view of the situation, we probably won’t do a funny stories at the end.

SUE: Not really appropriate.

JIMMY: So we’ll save a few up for you for next week.  But thanks very much, Sue, that’s been really interesting.

SUE: Yeah, it’s just a terrible situation isn’t it? And it’s been good to try to find some ways of looking to improve the situation.

JIMMY: Exactly. And if you’re listening, minister, it’s a crisis of construction,

MUSIC

JIMMY:  If you enjoy listening to these podcasts, you can subscribe completely free of charge on iTunes or other podcatcher software on your devices. That way you get fresh podcasts, delivered directly to your phone, tablet, notebook or computer as soon as they are posted.

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I’m Jimmy Thomson. Thanks for listening. Talk to you again next week.