$500 bill final nail in the coffin for struggling homeowner

Residents at a defective apartment block have paid hundreds of thousands of dollars over the years but it was a $500 bill that broke them.

EXCLUSIVE

Homeowners in a defective apartment block have paid hundreds of thousands of dollars over the years to fix the multiple structural issues left behind.

But it was a $500 bill that arrived in the mail last month that broke one of them.

“I was near in tears,” Kerry Ould told news.com.au, describing the moment she opened the letter from the state revenue office. It was asking her to pay $500 in land tax fees.

Ms Ould, 58, bought the property at the Frankston South site in Melbourne for $360,000 in 2017 but says it is now “worth nothing” and “unsellable”.

She has been unable to sell the apartment and has been left footing substantial costs alongside the other 32 residents.

The day she received the letter, in late June, she had already paid $14,000 to fix the dodgy balcony at her unit.

“It came in on Friday, I nearly went nuts,” Ms Ould said. “I had one girl (from the apartment block) ring me up, she was in tears.”

Kerry Ould said this bill from the State Revenue Office nearly brought her to tears.

Residents at the block have already dealt with millions of dollars worth of defects.

Ms Ould has already fronted more than $80,000 personally as part of special levy strata fees to urgently repair the apartment complex.

In parliamentary minutes, local politician Chris Crewther detailed that there were “many defects” at the Frankston South block including “multiple balcony collapses, significant cracking, water leaks that had rotted out carpets and wall linings to the extent that mushrooms and black mould began growing at an alarming rate, a collapsing underground carpark and more”.

An independent building report obtained by news.com.au last year estimated that it would cost in the vicinity of $9 million to fix.

Of that, $7.2 million was estimated to be needed to fix the cladding alone, as it was made of a combustible material that put the building at serious risk of burning to the ground if a fire broke out.

Do you know more or have a similar story? Get in touch | [e-mail]

Kerry Ould says she has been living a nightmare.

Emad Farag, the building boss behind the debacle.

Cladding Safety Victoria (CSV), a government body established to fix cladding issues, agreed to contribute $1.2 million for the removal of the hazardous cladding.

For the other issues, the homeowners have to come up with the money themselves.

Each owner is paying about $70,000 over the next five years but “including interest it comes up to about $110,000,” Ms Ould claims.

As an example, Ms Ould’s strata fees are currently about $11,000 a year.

On top of that, residents are currently $40,000 in arrears, behind in strata payments, because they simply can’t afford them.

“We’ve got pensioners in there, they can’t afford the loan repayments, we’ve had one go bankrupt, it’s a nightmare,” Ms Ould said.

“It’s almost like five years of your life has been screwed over.”

Some homeowners have been left financially ruined and have had to declare bankruptcy.

Mushrooms growing at one of the units due to inadequate waterproofing.

Mushrooms and slugs at the block.

Now the letter from the government’s state revenue department is extra salt in the already festering wound.

Ms Ould says it’s unfair, especially when she blames the government for putting her in this position in the first place.

Residents had feared there was a problem with their apartments for some time and first raised the issue with the state regulator, the Victorian Building Authority (VBA), in 2015, but were initially “rebuffed”, according to Ms Ould.

But in 2018, the VBA had to issue an emergency works order due to the severe fire risk the cladding posed to residents.

The VBA employed a 24-hour fire warden in 2018 so that residents could stay in their homes rather than be left with nowhere to go, while the urgent fire safety issues were fixed.

They also suspended the building licence of the sole director of the construction company behind the defects, Emad Farag of 4S Constructions Pty Ltd.

He tried to appeal this decision in 2021, but was rejected.

“There is no further enforcement action that can be taken by the Authority,” the VBA previously told news.com.au.

The site has been in a constant state of being repaired.

The defect bill is as high as $9 million, according to an independent report.

The apartment block has been mentioned in parliament.

The VBA has identified eight buildings as “high-risk” where Mr Farag was listed as the builder and are eligible for funding for cladding removal and replacement under the government scheme.

News.com.au understands that the amount of damage Mr Farag’s company 4S Construction did with cladding across the eight apartments will cost between $10 to $20 million of taxpayer money to fix.

Mr Farag previously said he hadn’t deliberately done anything wrong.

“I have never intentionally or knowingly done the wrong thing to gain a financial advantage and I hold myself to a very high standard of morals and ethics.”

The builder has been in hot water before, fronting multiple court cases dating back to 1998, which is coincidentally the year he started 4S Constructions.

“You are correct in saying that I have had one other previous judgment against me,” he told news.com.au.

“In a career spanning over 30 years you would be remiss to think that any builder hasn’t made mistakes along the way.

“Unfortunately, due to previous staff and subcontractors I learnt some lessons the hard way which led to these infringements.”

Ms Ould was furious by this answer at the time.

“This is far from the case of ‘oops, sometimes we all make mistakes’,” she said.

News.com.au has contacted the Victorian Building Authority. The State Revenue Office said it would not be commenting on individual matters.

[e-mail]

Originally published as $500 bill final nail in the coffin for struggling homeowner