Real estate agents selling apartments in two Sydney high rise buildings found to have “serious defects” by government inspectors have been targeted in a fiery New South Wales parliamentary hearing.
Key points:
- Nine prohibition orders have been issued by NSW Fair Trading since December
- Residents had moved into the Atmosphere and Aya Eliza before the orders were issued
- The Better Regulation Minister says his department is educating agents on their responsibilities
Courtney Houssos — who is Labor’s shadow minister for better regulation — used parliamentary privilege to take aim at agents selling units in the Atmosphere Towers in Castle Hill and the Aya Eliza building in Auburn.
Ms Houssos described the buildings as “notorious” and claimed she had discovered several real estate agents had not disclosed to prospective buyers that both developments were under prohibition orders.
A prohibition order prevents an occupation certificate being issued until the developer rectifies listed “defects”.
It means owners are stranded and unable to move into their brand-new apartment until the order is lifted.
The apartment towers were built by subsidiary companies of two large Sydney developers.
Merhis Group was behind Aya Eliza, while Toplace constructed Atmosphere Towers.
Since December, nine prohibition orders have been issued by NSW Fair Trading in an industry-wide crackdown.
However, in two buildings — Atmosphere and Aya Eliza — the owners had moved in before the order was issued as the developer had secured an interim occupation certificate.
Atmosphere’s 20-storey and 21-storey towers were slapped with a prohibition order in June after government inspectors found non-compliant cladding.
They also found the buildings had not been properly waterproofed.
At Aya Eliza, inspectors noted waterproofing issues on the balcony, tiles that were not properly fixed to the walls in bathrooms, and tiled floors with inadequate falls to allow for proper drainage.
In both orders, the Secretary of NSW Fair Trading said a “serious defect in the building exists”.
The NSW Building Commissioner, David Chandler, said both Atmosphere and Aya Eliza had been deemed safe to live in while rectification works took place.
Better Regulation Minister Kevin Anderson said his department was doing what it could to inform real estate agents of their responsibilities, including through “education programs, campaigns … online and social media outlets”.
However, the chief executive of the Real Estate Institute of NSW (REINSW), Tim McKibbon, disagreed.
REINSW is the peak body for real estate agents and property professionals in NSW.
“For Fair Trading to say they’ve been out educating agents is wrong, putting it on the website is not education,” Mr McKibbon said.
Mr McKibbon said that, if the real estate agent hadn’t disclosed the order, his guess would be “they weren’t aware of it and their obligation to go and search for it”.
Under New South Wales law, he said, agents know they are required to disclose building defects, but there’s also no clarity around how or when.
“Do you disclose in the marketing material? We don’t have guidance,” he said.
It’s also unclear if information buried in strata documents made available to the buyer, such as the minutes of the last annual general meeting held by the owners corporation (formerly body corporate), counts as disclosure by the agent.
A spokesperson for Toplace said the works at Atmosphere required to lift the prohibition order were “minor and will be completed in a matter of months”.
Merhis Group was contacted for comment.
