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‘Throwing good money after bad’: Opal Tower owners struggle as costs mount

Mr Eskander said some owners had lost their jobs due to the pandemic-induced recession, while others were struggling to pay mortgages after the loss of tenants. Owners will consider a special levy of up to $5000 on average per apartment at an extraordinary general meeting on July 1.

But the builder, Icon, said owners and their broker had had every opportunity since March to obtain a competitive insurance policy for the new financial year.

“Since this time last year, the damage in the building has been repaired, all of the apartments have been returned to the owners and Icon has provided a 20-year structural warranty,” it said.

Owner Andrew Neverly, 60, shut his tour and hire-car business several months ago because it was reliant on foreign tourists.

Opal Tower, in the foreground, was evacuated on Christmas Eve 2018 after gaping cracks were found in the building.

Opal Tower, in the foreground, was evacuated on Christmas Eve 2018 after gaping cracks were found in the building.Credit:Janie Barrett

Mr Neverly said owners were livid at the prospect of having to fork out for a special levy at a time when they were struggling financially.

“As far as we are concerned, it’s throwing good money after bad. We can’t sell it. Banks won’t lend on the building,” he said. “It is a hideous situation. Everyone is under loads of financial stress.”

Mr Neverly bought his two-bedroom apartment off the plan for $840,000 in 2014 and rented it out. To help offset the loss of income from his tour business, he has refinanced his home at Greenacre in Sydney’s west.

“My business has gone down the drain. It is very difficult circumstances and my wife is not working either. We are under the hammer,” he said.

The evacuation of Opal, and Mascot Towers in Sydney’s south in June last year, has led to new laws in NSW to clean up the construction industry, including greater powers for Building Commissioner David Chandler.

Mr Neverly, who was a strata manager for a decade, said the commissioner’s key power to withhold occupation certificates was encouraging but he remains sceptical about the protections for owners. “I advise anyone who is looking to buy into the property market not to buy off the plan, and just buy the finished product,” he said.

Icon has paid about $40 million to fix the defects since they emerged 18 months ago, which includes $2.1 million in insurance costs last year. Premiums rose from about $92,000 in 2018-19 because of difficulty getting insurance.

Although the premiums for this financial year have fallen to about $1.28 million, Mr Eskander said they were still high and the owners corporation believed the builder should cover the vast bulk.

“Icon needs to step up here because the building will go uninsured if they don’t,” he said.

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But Icon said obtaining insurance was a matter for the building management committee, which it argued had “all the relevant information” to obtain a competitive policy. “We do not understand how a competitive policy could not be obtained,” it said.

Furthermore, it said it had no legal liability to the owners for any premium increase.

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