Derek’s home was worth $900,000. He’ll walk away with nothing

The owner of an apartment in the blighted Mascot Towers, who is set to walk away with precisely nothing from the official deal to end the saga, has accused the government of the “ultimate betrayal” by breaking a core election promise.

In February 2023, just a month-and-a-half before the last NSW state election, the then-opposition Labor party issued a press release pledging it would partner with owners to remediate the building with a loan or as acting guarantor for a loan.

Derek and Rachel Williams outside Mascot Towers.Credit: Louise Kennerley

Instead, they’ve set up a deal to sell it to an investor consortium with the aim of allowing most owner-occupiers to walk away debt-free from their homes, which has now been accepted by 75 per cent of owners. “This is a completely different solution and one that’s broken our trust and our hearts,” said Derek Williams.

“Everyone will have lost so much money, and many of us will now be renting for the rest of our lives. When the Minns government wanted our votes, they promised the voters of NSW an equitable deal to help us. Instead, we’re being bullied into accepting something that ruins us.”

Residents in the 131-unit Mascot Towers in south Sydney were evacuated in June 2019 when major cracks opened up, and haven’t been allowed back. The pre-election shadow minister for better regulation and innovation, Courtney Houssos, pledged high-level support for owners.

Their rents on alternative accommodation were being paid by the government, but the new Minns Labor regime has now offered residents a deal – leave and have their mortgages and strata debts cancelled – or stay and face an uncertain future as the building is bought by a consortium that itself plans to remediate. The rental support will finish in June, and some owners are being tied into non-disclosure agreements that forbid them from talking about the deal.

Other owners are speaking out to say the government has betrayed them by failing to live up to its election pledges about a remediation loan and guaranteeing accommodation support until they can safely return.

Train engineer Williams, 62, ploughed his life savings, plus a small inheritance, into a two-bedroom, ninth-floor apartment in Mascot Towers in 2009 after being struck by a car while walking on a footpath and having to move into a unit with a lift because of his injuries.

Under the terms of the new deal, with $280,000 left to pay on his mortgage, the government has offered him $261,000 with the bank giving him a discount of $19,000 on the debt. He’ll walk away from his apartment – with a bank valuation of $900,000 – with absolutely nothing.

“So I’ll have no mortgage but also no property and no money,” he said. “After paying out for all those years, my hopes and dreams and inheritance will have all turned to dust. This is a terrible situation which is wrecking people’s lives.

“I’m beyond angry. To think the consortium that’s buying the building will be able to remediate it and then make a profit out of people’s suffering is appalling, and to think that someone new will end up living in my apartment instead of me … It’s absolutely gut-wrenching.”

Better Regulation and Fair Trading Minister Anoulack Chanthivong said Mascot Towers’ owners had themselves decided to ditch the remediation plan in favour of selling the building – a scheme later scotched by the NSW Supreme Court, which put the likely cost at $21.5 million.

“Mascot Towers’ owners have spent half a decade stuck in this mess, that’s why one of the first actions I took in government was to start working with them and the building commission to find a solution,” Chanthivong said. “It’s no surprise that the owners’ corporation made the choice to apply to end the strata scheme and sell the building rather than to pursue remediation.

“The resolution I’ve directed the building commissioner to find is likely to be the last chance Mascot Towers owners will have to make a decision for themselves rather than having it dictated by courts or the owners’ corporation.”

Derek and Rachel Williams will walk away with nothing. Credit: Louise Kennerley

But Williams argues that when the proposal to sell the building was outlawed, most owners expected to return to Plan A – to remediate themselves.

“It’s the ultimate betrayal in that they promised while in opposition to help us remediate our building, but as soon as they were elected, there’s been nothing of the sort.”

His wife Rachel Williams, 52, said the “broken election promise” had left her infuriated and said the Minns government had “completely failed us”.

But Chanthivong said the deal had been carefully prepared to help those most in need and described the situation as “extraordinary and exceptional”.

“This is taxpayer money, so of course, the final support package has been carefully prioritised to focus on the most vulnerable owners.”

However, investor owners who don’t qualify for assistance under a means-tested package are also angry they’re being left “high and dry” with the government promises “not worth the paper they were written on”.

Single mum Nicky Elderton, 42, said she bought her one-bedroom apartment in Mascot Towers in 2009 and lived there until she had the first of her three children, now aged 11. She then moved to a bigger unit elsewhere but kept the original as an investment.

Two months before the evacuation, the unit was valued at $750,000. After refinancing and drawing downs, she owes $690,000 on the loan and has been offered $167,400 for it.

“I’m a mum-and-dad investor; I’m not a big corporate investor who can afford things like this,” Elderton said.

“I’m now working with Lifeline Australia to try to negotiate with the banks, but it looks like I will lose everything. I’ve cried my eyes out at every meeting, but the government refuses to listen.”

Strata lawyer Stephen Goddard said the government deal varied between owners, with some left with debts, some having debts cancelled, and everyone coming out badly.

“I believe the state government has let people down,” he said. It should have acquired the building and effectively demolished it because of its toxic reputation, reconstructed the site, sold it, and reimbursed the owners with the revenue. Instead, it’s been asleep at the wheel, and disaster has ensued.”