Owners selling up amid dispute
With their building in disrepair, residents of the President plead for change
MEET the President. Fifty years old and full of concrete cancer. Its foundation walls are cracked, lifts are breaking down, windows need urgent repair, it’s full of asbestos and the outdoor pool, garden and barbecue facilities have been boarded up for years because bits are literally falling off the building.
And yet … the 10-storey, 34-unit President is positioned on absolute beachfront on beautiful Northcliffe Terrace. It’s ripe for urban renewal, with the opportunity to provide far more units than it currently contains, as well as contributing to the facelift that Surfers Paradise so desperately needs.
Even those residents most opposed to over-development would surely vote for the President to be replaced. So why hasn’t a developer pounced?
Well, they have. Multiple times. But every time there is something stopping them: one owner.
Sometimes it’s been two owners, sometimes three, but for years the remaining 30-plus owners have been resolute in their desire to sell out of their beachfront money pit.
Which is why the President makes the perfect argument as to why radical changes proposed for body corporate legislation must not only be passed, but given urgent attention.
Because it’s the only way to grant sweet release for 32 owners in the President. The proposed changes would allow for the termination of community title schemes with the support of 75 per cent of lot owners where the body corporate has agreed it is the most financially viable option.
Currently, scheme termination requires consent from 100 per cent of lot owners, meaning just one owner can prevent a unit scheme from being sold for redevelopment.
For Graham Spottiswood, chairman of the President’s body corporate committee, that nightmare scenario has been his reality for the past three years.
Mr Spottiswood has long seen the writing on the (cracked) wall, having received a quantity surveyors report which estimated returning the building to a reasonably habitable and safe condition would take five to 10 years and cost more than $9m, at $250,000 per owner.
Despite spelling out the President’s bleak future to its owners, he says one to two owners refused to accept offers at almost twice the current valuation.
Mr Spottiswood says many owners chose to sell in the interim as they were unable to afford the rising body corporate fees and levies necessary to keep the building habitable. He says rather than receiving a windfall amount for their units they instead left in debt, having no option other than to accept firesale prices.
Even with the hope of promised changes to body corporate rules, Mr Spottiswood is scared owners will lose their chance to escape if the proposed legislation is not rushed through.
“The problem is this can be difficult legislation to bring in, a member of the LNP told us that. People feel sorry for the ‘little old lady’ who is supposedly kicked out of her home,” he said.
“But the whole idea of this is that person will be paid far above market value. Besides, especially in our case, that little old lady is facing enormous fees to stay in her home. Meanwhile, there are half a dozen other little old ladies right now who are trapped here. They can’t stay because they can’t afford it and they can’t sell because they can’t afford it.
“No buyer is going to look at the reports of this building and want to buy in. And yet here we have a developer ready to offer an amount that will allow these owners to start again.
“It’s unbelievable we are still waiting for these changes. How can it be fair that one or two stubborn owners are bringing the vast majority of owners to their knees by not agreeing to sell, when the building is actually becoming a very unsafe place to live?”
Another owner, who did not wish to be named, says insurers have threatened to withdraw cover for the building given its current state.
He says the body corporate committee has been left in an untenable position and could barely afford to wait for legislative changes.
“The body corporate committee is under extreme pressure … we have a duty to maintain and repair the building, but we’re met with pleading calls from owners that they cannot pay any more than the current strata fees,” he said.
“It’s like a cat chasing its tail - the owners are resisting the funding towards the remediation works, but we all can’t sell and get out. The residents cannot enjoy the outdoor pool and garden/barbecue facilities as they have been boarded up due to Workplace Health and Safety requirements, with bits falling off the building. This has been the case for nearly a couple of years.
“This makes the responsibilities of the committee very difficult, particularly with insurers threatening to withdraw building insurance cover if the money is not spent to remediate the building. This also jeopardises the committee liability insurance cover, forcing the voluntary committee members to resign.
“We are absolutely stuck unless all owners agree to sell … or the laws are changed asap.”
Strata Community Association Queensland chief executive Laura Bos agrees there needs to be a sense of urgency around the impending reforms.
She says the sooner a draft can be released for consultation the better, as it would help allay community fears and prevent scare campaigns.
“The key part of this is that there will be protections at both ends – for
the owners in the minority and the majority,” she says.
“This is about finding reasonable outcomes that allow everyone to win.
“While we have to make sure we get this right, I think it’s also imperative that we don’t waste time.
“Situations like what has been described at the President are a real concern, safety must be paramount.
“Unlocking more supply for the housing market is also essential.”
Mr Spottiswood says while not every older building needs to be demolished and redeveloped, the President was not the only ageing tower requiring urgent attention.
He says passing the new legislation would not only help provide for a new start for old residents, but would also create more properties to aid the current housing crisis.
“It’s been well reported that the Gold Coast has an increasingly heavy demand for accommodation, so these smaller older buildings need to be redeveloped to create more housing,” he says.
“Our motivation here is not naked profit. I think that if our building could be renewed for a reasonable price many would be interested. But that is not the case.
“Our only hope is that we’ll be able to get a deal done before it’s too late for too many more.”
How can it be fair that one or two stubborn owners are bringing the vast majority of owners to their knees GRAHAM SPOTTISWOOD