Years-long spat over shoddy apartment build costs council $250,000


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A council has paid more than $250,000 to settle a spat over a shoddy build in a Brunswick East apartment complex.

A council has paid more than $250,000 to settle a spat over a shoddy build in a Brunswick East apartment complex.

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The planning and construction of a unit and adjoining carpark were so flawed the structures need to be demolished and rebuilt, spurring legal action over who should pay for reconstruction.

The case, which has been before the Victorian Civil and Administrative Tribunal for several years, has cost an engineering company at least $350,000 and a building company more than $321,000, with the latter then declaring insolvency.

Problems with the apartment, located at the rear of a complex of four apartments in Holmes Street, were first discovered in 2011.

A family bought the apartment for $495,000 and, shortly after moving in, noticed doors were binding, tiles were cracking and lifting, and there was excessive mould and insulation issues.

They then hired a building expert, who found there were major structural failures in the design and construction of the unit and the concrete slab it was built upon.

In 2015, the apartment's owners and the complex's owners corporation took legal action against Whittlesea Council, Icon Building Concepts and CGB Consulting Engineers.

The council's building surveyor was heavily criticised for issuing an occupancy permit despite the building containing "many visible and obvious faults that provided serious reasons to doubt it would have complied with the permit".

Tribunal senior member Rohan Walker found the engineer, builder and council building surveyor were negligent in their duties.

The total damages awarded were $867,682 for demolition and reconstruction, $14,127 for propping the defective slab and $5000 for loss of amenity. Mr Walker also ordered an additional $79,102 in damages to cover alternative accommodation and removalist costs for the apartment's owners.

The council and engineering firm agreed to a private settlement, while the builder was ordered to pay $321,970.

But that was not the end of the dispute. The case again went before VCAT earlier this year when the apartment owners and the owners corporation could not agree how the money should be divided between them.

A little more than $100,000 had been disbursed, but $840,000 remained in an interest-bearing bank account.

A solicitor acting for the owners corporation argued that the money should not be divided but instead used to pay for the reconstruction of the car park and the unit.

Mr Walker reserved a decision. "Before making any order directing the parties how to spend this money, I must be satisfied I have the power to do so," he said.

"The tribunal should not order the owners to do something that they are not legally obliged to do."

The three other apartments in the complex are understood to be structurally sound. One sold for $560,000 in October last year.

Requests for comment from Whittlesea council to explain how it was involved in the case when Brunswick East is part of Moreland council were not returned.

The story Years-long spat over shoddy apartment build costs council $250,000 first appeared on The Sydney Morning Herald.

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