Mascot Tower owners receive sale contracts, with owners set to lose hundred of thousands

‘Worn out’ Mascot Towers owners have been given an opportunity to sell their defect-riddled assets, however in doing so, they stand to lose hundred of thousands.

“Worn out” owners of Sydney’s embattled Mascot Towers will lose hundreds of thousands of thousands of dollars if they choose to sell their defect-riddled apartments, with one owner set to receive just $220,000 for his two-bedroom home.

The 132 residential and nine commercial owners of the inner-south apartment block received their sale contracts on Friday, giving owners their first chance to walk away from the legal and financial nightmare since the towers were evacuated in June 2019 due to structural cracking.

It’s understood, the deal will reach the necessary 75 per cent threshold for the towers to be sold to a third party consortium, with owners asked to make their decision by mid-March.

However, after years of anguish, owners will lose hundreds of thousands if they choose to sell.

Owners of Mascot Towers have been given their sale contract, which could see them finally rid themselves of their defect-riddled asset. Picture: NCA NewsWire / Tim Pascoe

Former resident Jamie Lam, who bought his two-bedroom home in February 2013 for about $600,000, will receive just $220,000 in the sale.

He estimates the home could be worth about $1m today, given it’s proximity to public transport and inner-city location,

“I want to sell but it’s a huge amount to be losing. To this day, if it was a building that could be occupied, it would sell for a million, so I’m losing 80 per cent of the value of the property,” he told NCA NewsWire.

“Ordinary Australians cannot afford to lose 80 per cent of the value of the most important asset of their life. This is supposed to be the most secure form of investment that the government encourages us to have.”

Adding salt to the wound, since Mr Lam leased his home at the time of the evacuation and has a combined household income of more than $156,000, he is also ineligible for financial or mortgage assistance.

Mascot Towers owner Jamie Lam (right) says he has been offered $220,000 for the sale of his apartment which would be worth $1m today. Picture: Supplied

“Me and my partner live in Sydney and there’s two of us working. Of course we make more than $150,000,” he said.

Single mum of three, Holly, who asked to be identified under a pseudonym, will get just $161,000 for her one-bedroom home. She said if she sells, she’ll be left with a $400,000 mortgage.

She says she will consider keeping her property and remaining with the commercial consortium who will purchase the tower, as a way to potentially retain her investment.

“If I’m going to be out of pocket for nearly half-a-million dollars, do I go in as a stayer, hedge my bets an at least end up with an asset?” she said.

“But at this point it’s such a grey area because they’ve given us no details as to what keeping our homes will look like.”

Holly says she’s been left “worn-out” by the past five years of financial pain and fears the sale could leave her family “financially devastated”.

“As of today, I can’t even officially divorce my partner because as far as separating assets, when you’ve got a debt of half a million dollars, no one want to take ownership of it.”

Friday’s offer would allow owners to bring the lengthy financial and legal nightmare to a close, however, owners would lose hundreds of thousands of dollars on their investment. Picture: NCA NewsWire/ Gaye Gerard

Throughout the protracted negotiations, investors have complained of being treated unfairly, compared to owner occupiers, who will get mortgage relief as a result of the sale.

For owner occupiers, who lived in the building at the time of the evacuation, banks have agreed to reduce their mortgage by up to 40 per cent, with the NSW government set to provide additional payments to resolve remaining debts.

There will also be two support packages available to both owner-occupiers and investors, as long as they meet the means-tested criteria.

One plan is capped at $120,000 for owners who have a taxable income of less than $156,000, plus additional assets under $1m.

Owners over 65 years of age and have a taxable income under $124,000, plus assets less than $1.75m can access an assistance package capped at $360,000.

Owners who don’t have a mortgage debt, and have a taxable income of less than $156,000, plus additional assets under $1m are eligible for assistance capped at $120,000.

Originally published as Mascot Tower owners receive sale contracts, with owners set to lose hundred of thousands