Honest property developers. Is that an oxymoron?

FlatChat is a great site for publishing inspirational accounts of why it’s not terrible living in an apartment. This is despite the (slowly changing) Australian culture of believing that living in flats is not as good as living in a house. FlatChat is to be commended for this. However, sometimes it all goes wrong, and the FlatChat readers need to be aware of this too.

The term honest property developer has just been officially added to the new Oxford dictionary as an example of an oxymoron – just kidding.

We bought our apartment off the plan as our first, and last home. We started being home owners very late in life after years of renting. Needless to say we were very excited. We signed a contract for an 80 sqm 2 bedroom apartment with a car park in a security controlled building with 9 visitor car spaces. There are commercial tenants on the lower levels and resident apartments above. One lift, no other resident facilities.

Things started to go wrong before we even took possession. The developer decided that they would also run the building, so they registered themselves as OC managers and signed a contract with themselves for 5 years. They also kept ownership of most of the commercial suites. They changed the plan of subdivision so that all of the visitor spaces were transferred to the ownership of the commercial suites – which they own, but didn’t change the entitlements and liabilities on the plan of subdivision. In essence, they received 9 secure undercover car parks in a major activity centre worth about $450,000, paid for by the the people who purchased apartments – people like us.

They also changed the plan of subdivision so that they now own the roof. Gone are any opportunities to be green and install solar panels to supply the common areas. They wrote into the OC rules that any decisions of the OC could not disadvantage the commercial interests of the developer.

The OC manager bypassed some of the security measures so that customers of the commercial suites were not hindered in any way when entering the building. This reduced the level of security of the residents, and eventually resulted in a VCAT hearing. The only outcome was that the OC manager/developer charged the OC thousands of dollars in VCAT attendance fees. The actions of the OC manager were criminal, yet it seems that there is a reluctance for VCAT to punish OC managers. This proved that there are no clear lines of separation between managing the OC and being an employee of the developer.

Our 80 sqm apartment turned out to only be 74 sqm. Stamp duty was quoted at 360 in the developer’s sales documents, but was actually $1400. Not a lot for a $500,000 apartment, but still 4 times that advertised. The OC fees we were quoted at $2700 per year (0.0054% of purchase price), but were actually $4100 (0.0082% of purchase price). After doing some research, I have discovered that this is the kind of fee for apartments with swimming pools, gym and rooftop garden. We have 1 lift and a stairwell which is so dirty that you need to be wearing a dust mask to use it.

A few weeks after we moved in, we saw a notice that the same developer was to build an 8 storey building next door. This building which blocked 80% of our northern light didn’t satisfy them. After construction had began, they took the council to VCAT to increase the hight so it would block 90% of our light. Our local ward councillor couldn’t vote on the hight issue at council meetings because the developer had made a donation to the charity she was the patron of. Convenient. The industrial strength air conditioner outlets for the building point directly at our bedroom window. I feel even sorrier for the tenants who now have their living rooms and only ventilation source through the light well between the two buildings.

One day I was looking around the outside of my building and noticed power, water and data connections between my building and the construction site next door. The developers were clandestinely using our power and water supplies to construct their building. We were never informed about this. I suspect that if I had not stumbled upon the poorly hidden conduits they never would have told us. When I complained to the the OC manager, I was told that the developer had every intention of reimbursing the OC for the costs. The actual costs would be determined by the developer – and no, I could not see proof of this as it was confidential information. Any mention that the connection of power and water was less than honest brings a threat of legal action from the OC manager.

I think the developers planned this very well. Getting residential buyers to subsidise the running of commercial interests which they own. What can we do? I am the secretary of the OC committee, but feel powerless. The developer controls the OC through the manager, and the majority of votes. At the last AGM, the OC manager controlled 16 of the 19 votes present – out of a possible 37.

Governments will never be successful in getting people to embrace medium density living unless they have an effective system to stop criminals developing and running these buildings.

I once dreamed of winning the lottery so I could buy a large detached house. Now I dream of winning enough money to hire a lawyer and get these crooks jailed.