‘Final straw’: Shenton Quarter buyers get stamp duty slug after BGC walk-out

A new builder has been appointed to finish the job at Iris Residential’s troubled Shenton Quarter development, but BGC Construction, which walked off the job in October, says it remains concerned by a litany of engineering and structural issues.

Meanwhile, buyers are left wondering which builder would be held responsible for any future defects, while some who already paid deposits of up to $100,000 are now being slugged with a stamp duty bill for their unfinished apartments.

The Shenton Quarter development has been hampered by a series of issues.

In a statement on Monday, developer Iris-PW announced it had retaken possession and appointed Gowdie Management Group to complete the nine-storey apartment complex.

Iris Residential managing director Simon Trevisan said attempts to engage BGC to get the company to fulfil its contractual obligations had been unsuccessful.

BGC suspended work at the $140 million Shenton Park site on October 30 over what it described as concerns about engineering and the development’s design.

In a statement following Iris’ announcement on Monday, BGC said it remained concerned with the project’s engineering and structural adequacy.

“Despite two independent engineering reports highlighting these deficiencies and the necessary rectification requirements, these issues remain unresolved to BGC’s satisfaction,” the statement said.

“BGC’s request for engineering data and subsequent discussion between the parties’ engineering experts to resolve these matters was repeatedly dismissed.”

The statement said that BGC would not continue to construct a building with known deficiencies and management remained concerned the issues raised would need to be addressed to ensure the safety of the building’s occupants.

“BGC is aware of similar issues by the same engineer and engineering firm which are currently subject to legal actions following building structural deficiencies,” it said.

Australian Apartment Advocacy chief executive Samantha Reece said she and a group of 20 buyers met with Trevisan on Friday, and claimed he told the group the complex was “95 per cent” complete, with only the podium level remaining.

Reece said the group was told all defects raised with Iris had been remediated, bar one, however she claimed Trevisan refused to release an engineering report to them, instead saying one would be made available in the coming weeks.

Following Gowdie’s appointment, Reece said buyers remained concerned over which of the two builders would be held liable for defects that may emerge down the track.

She called on the state government to mandate defect checks throughout construction, noting they would have picked up the issues raised at Shenton Quarter before BGC’s walk-out.

Reece has also written to WA Finance and Commerce Minister Sue Ellery urging the government to intervene over stamp duty bills of $30,000 or more issued automatically after an assumed three-year build deadline.

Construction started at Shenton Quarter in October 2020, and was initially due to be completed in August 2022. Currently, there is no solid completion date.

Trevisan said Iris would consult with Gowdie to provide buyers with an expected completion time.

“These home buyers are under significant financial pressure, and this really is the final straw,” Reece said.

“Many purchased off-the-plan in 2019 and still do not know when their apartment will be finished.”

BGC’s exit, which an Iris spokesman claimed at the time came with “no prior notice”, left buyers in limbo and unsure if they should proceed with their purchase as the complex sat close to completion.

Trevisan said the decision to appoint a new builder had not been taken lightly, and claimed BGC had shown a disregard for its obligations and failed to provide proper staffing at the site.

“We appointed BGC as a Tier 1 builder, and are deeply disappointed with the outcome,” he said.

“In particular, we are acutely aware of the distress and frustration that BGC’s actions and the resulting delays have caused our buyers – and we have taken this decisive action in order to expedite completion of Shenton Quarter to the standard that our buyers are expecting.”

BGC’s walk-out came after the state’s construction union voiced serious concerns about the complex after receiving several reports from members of structural defects earlier this year.

“Some of the apartments [union members] have been working in have massive cracks starting to appear … the concerns have come through when these cracks have continued on,” a CFMEU spokesman said in video posted to the union’s social media in March.

“The apartment that we’ve been told about … which is probably the worst affected apartment here literally has a crack from one side of the apartment to the other side, and that crack is growing on a daily basis.

“I just feel sorry for anyone who has bought an apartment here.”

Gowdie, which has previously been appointed to complete the Raine Square tower in Perth’s CBD, was completing an audit of the Shenton Quarter project, including a review of design and engineering reports.

The company was due to begin to engage trades and subcontractors on Monday, aiming to restart work as soon as possible.

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