hi somersoftians. i've just received a strata report i ordered for a potential purchase and i can't seem to make up my mind on whether it is still a good investment or not. it seems that this building has heaps of problems from the report but i'm not sure whether its too bad... care to share your thoughts? its a bit long so i'll say thank you in advance for those who bothered reading...
Is it likely that there will be any major expenses in the near future which will deplete the current funds available.
Details : The records indicate that Alex Ilkin Solicitor was originally appointed to manage a building defects claim on behalf of the Owners through the Department of Fair Trading with defects mainly relating to the following (Claim No.C201/2073):
• Roof Membrane
• Pool
• Cracking
• Leaking planter boxes
• Defective cement render/slabs (Cement render delaminating)
• Water penetration through cavity walls, sliding door hobs, parapet walls, etc.
It is understood that the building was constructed by Walter Construction Group Pty Ltd who are no longer trading.
It was noted that tenders were sought by Alex Ilkin to support the claim and quotes of $1,318,000 (East façade works) and $864,000 (West façade works) only were offered by Sydney Building Services.
It was noted in Meeting Minutes of February 2003 that replacement of the sauna was being considered but we were unable to confirm the current status of this matter.
It was noted in Meeting Minutes of December 2004 that consideration was given to ordering an Occupational Health and Safety report but this matter was deferred.
It was noted in Meeting Minutes of September 2004 that a request for a cash advance from the Department of Fair Trading was to be made to carry out urgent repairs but we saw no evidence of any funds of this nature being received. (An amount of $160,767 + Home Owners warranty insurance was to be requested).
Correspondence dated 18/5/05 was sighted from Alex Ilkin Solicitor advising that the failure of cement render on the exterior of the building may not be considered a major structural defect and if so, would be out of time for a successful claim. Furthermore, if the delaminating render was to result in a Public Liability claim, the insurer may decline to make a payment as the defect has been known for a number of years. Alex Ilkin recommended in the letter that a special levy of $200,000 be raised in the meantime to carry out cement render repairs.
Meeting Minutes of 15/6/05 note that any roof membrane repairs were to be deferred until the Department of Fair Trading had completed their inspections of the building and that an engineer was to be engaged to report and prepare specifications re the delamination of the cement render on the building.
It was noted in meeting minutes of February 2006 and April 2006 that roof repairs were approved together with the installation of smoke detectors to comply with a Council order.
It was noted in meeting minutes of October 2006 that a quote of $11,220 was accepted for exterior render repairs necessary to comply with a Council order and it appears that these works have since been completed.
It was noted in meeting minutes of December 2006 that the Council fire order matter was to go to court 2/2/07 but the compliance date appears to have been extended to 15/3/07 and the Owner Corporation indicated a willingness to comply.
It was noted in correspondence of 5/12/06 from Strategic Strata Solutions (consultants) that they claimed the building “has suffered from poor management and gross neglect for many years and has now reached the point where unless a fresh new approach is made to the administration of the building and urgent funding provided owners will suffer very serious consequences”. The Consultants recommended that new remote gates be installed, gym equipment be replaced, all doors be upgraded, hot water services be repaired, the roof, planter boxes and water penetration affected units be inspected and surveillance equipment be upgraded. Actual budget estimates for these works were not sighted.
It was noted in meeting minutes of March 2007 that replacement of fire dampers was required at an estimated cost of $62,000 to $90,000 and it was noted that Council approved the replacement of 20% with the remainder within 2 years. It was further noted that Hyder Consulting were appointed to report on fire safety matters at a cost of $63,000 and water penetration at a cost of $7,000 and previous Consultants had failed to properly identify the problems.
It was noted that the Office of Fair Trading advised 8/1/07 that approval in principal was given for the “rectification of major structural defects” and “all other items” were declined. According to the records, those items approved include water penetration into units at wall and floor junctions adjacent to balconies and cavity walls together with water penetration below the roof and level 8 paving (29 units are presently affected by water penetration).
It was noted in records of March 2007 that the Office of Fair Trading offered $100,000 in full settlement of outstanding defects however, the actual cost of rectification works was estimated at $2,000,000 plus. It was further noted that Land and Environment Court orders (appears to include delamination of render) were required to be completed by 15/4/07 and fire order works were almost complete.
It was noted in records of 4/7/07 that Eventang Pty Ltd the original developer still holds 35 lots being 22% of the units of entitlement and is responsible for a large quantity of the levy arrears and legal action is ongoing for recovery. It was also noted that the developer has been attempting to have The Strata Management changed to another company. The records indicate that current defects outstanding include the roof membrane, cement render, flashings, bathroom wall leaks, inadequate balcony drainage, inadequate ventilation to bathrooms and laundries, inadequate pumps and delaminating doors at roof level.
It should be noted that the records did not indicate whether the Owners intend to appeal the decision by the Office of Fair Trading and may eventually be forced to fund the balance of repairs required at the complex which would require the raising of a SPECIAL LEVY.
Is it likely that there will be any major expenses in the near future which will deplete the current funds available.
Details : The records indicate that Alex Ilkin Solicitor was originally appointed to manage a building defects claim on behalf of the Owners through the Department of Fair Trading with defects mainly relating to the following (Claim No.C201/2073):
• Roof Membrane
• Pool
• Cracking
• Leaking planter boxes
• Defective cement render/slabs (Cement render delaminating)
• Water penetration through cavity walls, sliding door hobs, parapet walls, etc.
It is understood that the building was constructed by Walter Construction Group Pty Ltd who are no longer trading.
It was noted that tenders were sought by Alex Ilkin to support the claim and quotes of $1,318,000 (East façade works) and $864,000 (West façade works) only were offered by Sydney Building Services.
It was noted in Meeting Minutes of February 2003 that replacement of the sauna was being considered but we were unable to confirm the current status of this matter.
It was noted in Meeting Minutes of December 2004 that consideration was given to ordering an Occupational Health and Safety report but this matter was deferred.
It was noted in Meeting Minutes of September 2004 that a request for a cash advance from the Department of Fair Trading was to be made to carry out urgent repairs but we saw no evidence of any funds of this nature being received. (An amount of $160,767 + Home Owners warranty insurance was to be requested).
Correspondence dated 18/5/05 was sighted from Alex Ilkin Solicitor advising that the failure of cement render on the exterior of the building may not be considered a major structural defect and if so, would be out of time for a successful claim. Furthermore, if the delaminating render was to result in a Public Liability claim, the insurer may decline to make a payment as the defect has been known for a number of years. Alex Ilkin recommended in the letter that a special levy of $200,000 be raised in the meantime to carry out cement render repairs.
Meeting Minutes of 15/6/05 note that any roof membrane repairs were to be deferred until the Department of Fair Trading had completed their inspections of the building and that an engineer was to be engaged to report and prepare specifications re the delamination of the cement render on the building.
It was noted in meeting minutes of February 2006 and April 2006 that roof repairs were approved together with the installation of smoke detectors to comply with a Council order.
It was noted in meeting minutes of October 2006 that a quote of $11,220 was accepted for exterior render repairs necessary to comply with a Council order and it appears that these works have since been completed.
It was noted in meeting minutes of December 2006 that the Council fire order matter was to go to court 2/2/07 but the compliance date appears to have been extended to 15/3/07 and the Owner Corporation indicated a willingness to comply.
It was noted in correspondence of 5/12/06 from Strategic Strata Solutions (consultants) that they claimed the building “has suffered from poor management and gross neglect for many years and has now reached the point where unless a fresh new approach is made to the administration of the building and urgent funding provided owners will suffer very serious consequences”. The Consultants recommended that new remote gates be installed, gym equipment be replaced, all doors be upgraded, hot water services be repaired, the roof, planter boxes and water penetration affected units be inspected and surveillance equipment be upgraded. Actual budget estimates for these works were not sighted.
It was noted in meeting minutes of March 2007 that replacement of fire dampers was required at an estimated cost of $62,000 to $90,000 and it was noted that Council approved the replacement of 20% with the remainder within 2 years. It was further noted that Hyder Consulting were appointed to report on fire safety matters at a cost of $63,000 and water penetration at a cost of $7,000 and previous Consultants had failed to properly identify the problems.
It was noted that the Office of Fair Trading advised 8/1/07 that approval in principal was given for the “rectification of major structural defects” and “all other items” were declined. According to the records, those items approved include water penetration into units at wall and floor junctions adjacent to balconies and cavity walls together with water penetration below the roof and level 8 paving (29 units are presently affected by water penetration).
It was noted in records of March 2007 that the Office of Fair Trading offered $100,000 in full settlement of outstanding defects however, the actual cost of rectification works was estimated at $2,000,000 plus. It was further noted that Land and Environment Court orders (appears to include delamination of render) were required to be completed by 15/4/07 and fire order works were almost complete.
It was noted in records of 4/7/07 that Eventang Pty Ltd the original developer still holds 35 lots being 22% of the units of entitlement and is responsible for a large quantity of the levy arrears and legal action is ongoing for recovery. It was also noted that the developer has been attempting to have The Strata Management changed to another company. The records indicate that current defects outstanding include the roof membrane, cement render, flashings, bathroom wall leaks, inadequate balcony drainage, inadequate ventilation to bathrooms and laundries, inadequate pumps and delaminating doors at roof level.
It should be noted that the records did not indicate whether the Owners intend to appeal the decision by the Office of Fair Trading and may eventually be forced to fund the balance of repairs required at the complex which would require the raising of a SPECIAL LEVY.
