Experts warn of more major building defects to follow Mascot Towers drama

Experts have issued a grim warning about Australia’s building defect epidemic, claiming the latest incident is just the tip of the iceberg.

Just six months after Sydney’s Opal Tower was dramatically evacuated, another Sydney high-rise has been hit by potentially devastating cracks.

And experts say the nightmare facing residents of Mascot Towers won’t be the last.

The building was evacuated last Friday night due to serious concerns regarding cracks in the primary support structure and facade masonry.

Soon after, Australian economist John Adams, Digital Finance Analytics founder Martin North and property consultant Edwin Almeida claimed Australia was full of “high-rise death traps” in a discussion uploaded to YouTube.

Since the Mascot Towers story broke, news.com.au has also received unconfirmed reports of similar faults in other residential towers in Sydney.

But according to Owners Corporation Network spokesman Stephen Goddard, these incidents could be just the tip of the iceberg.

He said the problem was probably far greater than most people realised because many owners within faulty buildings did not want that information to be made public, as they feared being “stigmatised like Mascot and Opal”, which would cause their building “to become toxic” — and lose value.

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“The only reason we hear about Opal and Mascot is because the defects are life-threatening, but the majority of defects are water penetration and the absence of fire safety — and those issues are being quietly dealt with,” he said.

“All over the country, people are trying to prevent their buildings from becoming toxic and losing capital values.

Mascot Towers was evacuated last week. Picture: Damian Shaw

“The reason why you have difficulty finding these buildings is because they’re hiding — (the owners) don’t want talk to you.”

He said he knew of at least one other building in the city with an exterior that was “falling into the street”.

Mr Goddard said when a building was found to be faulty, the owners’ corporation was often accused of failing to properly maintain it — although he said that didn’t stand up in the case of the Opal and Mascot towers, as both were relatively new.

He said it was now “desperation time” — and architects, builders and engineers needed to be held accountable and follow a strict code of conduct, while owners’ corporations must be allowed to sue in cases of negligence.

It comes just six months after a similar issue in the Opal Tower building. Picture: Paul Braven/AAP Image

“Retrofitting (a building’s) structural stability can cost millions — it tends to cost six to 10 times the cost of doing it properly the first time,” he said.

“The Mascot Towers owners are looking at significant special levies of anywhere between $100,000 to $300,000 per lot — there are going to be big levies that people will have to pay in circumstances where a building is so toxic their apartment is unsaleable.

“We’ve got owners looking down the barrel at special levies they may not be able to afford. They could have to move out and could well default on their mortgage. They won’t be able to sell their lot, so they will have to commence bankruptcy proceedings, all because they wanted a piece of the Australian dream.”

Unfortunately, Mr Goddard is not alone in his concern over Australia’s faulty building epidemic.

Real estate expert and Starr Partners CEO Douglas Driscoll has also previously warned of the country’s potential problem with “vertical ghettos” — poorly-constructed apartment towers built during the property boom that he expects will develop faults in the near future.

Residents were escorted in and out of Mascot Towers to collect personal belongings. Picture: David Swift.

While he stressed these buildings were in the clear minority, with the overwhelming majority constructed by reputable developers to a very high quality, he said issues like those at Mascot and Opal towers would increase.

“We’ve got to accept Mascot Towers was not the first, and it won’t be the last,” he said.

“Three years ago I wrote about the need for more stringent regulation around building quality in Australia.

“We can’t take risks when it comes to people’s lives, and if it means developers need to jump through a few more hoops, if it helps saves lives in the long term, surely we should all be for that.”

He said “99 per cent” of residential high rises and unit blocks were built to a “very high standard”, but the recent property boom had led to a number of “pseudo-developers” essentially “cashing in”.

“(Those developers) don’t have the level of expertise of some of the more established developers and sometimes the buildings reflect that — they weren’t building to last, they were building for profit,” he said.

Douglas Driscoll said while most towers were built to a very high standard, similar issues would continue to occur. Picture: Ian Svegovic

Mr Driscoll said news of the Mascot Towers issue hadn’t surprised him, and he expected similar issues to happen again in the near future.

“I think it’s potentially an insight into what we will see more of in future — unfortunately, it will crop up time and time again,” he said.

“The residents of Mascot Towers are essentially homeless, so what happens to those people who are now out of pocket? Should they be compensated, and if so, who pays? Unfortunately, this issue will rear its ugly head again, there’s no question about that.”

He said we needed to stop “playing Russian roulette with people’s safety”, and tighter regulation was needed.

He called for a full, thorough review of current building regulations — or possibly a royal commission — and said the building industry should echo that of the automotive industry, with the introduction of annual building safety checks similar to a pink slip and longer warranty periods to cover major defects.

At the moment, the warranty period is just six years in NSW, and Mr Driscoll said that should be extended and made uniform across the country.

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