Award-winning Landmark building at Charlestown has some problems

THEY call it the Landmark – a $24 million commercial and residential building on a look-at-me location at Charlestown that won a NSW Master Builders Association excellence in construction award in 2009.

But nearly 10 years later the Landmark is in trouble as the NSW Government is criticised for doing too little, too late to protect unit owners, while supporting a unit development boom across the state.

The Landmark’s developer/builder – high profile Belmont businessman and Hunter building industry director Peter Durbin – has wound up his two companies behind the project after legal action by its 59 unit owners, most retired and many on pensions. It’s left them with the bill to repair significant defects costed at between $730,000 and $2 million.

Some are considering reverse mortgages to meet the unexpected special levies of at least $10,000, and up to $40,000, with the possibility of more special levies in future in addition to regular maintenance costs. Many told a recent tribunal hearing of the stress of being forced to bear the “enormous cost” of repairs for long-standing defective works which led to internal divisions among building residents.  

“The law is not protecting purchasers,” said Aidan Ellis, whose penthouse unit with spectacular 270-degree views has severe water, corrosion, noise, insulation and cladding problems and a wrap-around balcony with serious defects, where the repair bill must be shared by all owners because it is common property.

“It’s not a question about buyer beware. The fact is the current system we have doesn’t hold anybody to account when things go wrong. And the cost is all back on the unit owners,” said Mr Ellis.

Peter Durbin is not denying the Landmark has problems.

It’s not a question about buyer beware. The fact is the current system we have doesn’t hold anybody to account when things go wrong. And the cost is all back on the unit owners.

Aidan Ellis

“I think it’s a clear fact there’s some defects in the building,” he said on Wednesday.

But in a statement on Thursday he distanced himself from the Landmark, saying he “participated in discussions with the owners concerning the possible resolution of the matter by agreement” until late last year but “regrettably, it was not possible for an agreement to be reached”.

“The ambit of the claim being pressed by the owners was such that (his company) Nelson Bay Building could not continue to meet the expense associated with responding to it, and the company therefore entered into liquidation,” Mr Durbin said.

Nelson Bay Building was wound up by Mr Durbin, as sole director, in October last year and a liquidator was appointed. In his statement Mr Durbin confirmed the creditors were other companies owned by him that were owed $128,000.

“The owed monies are effectively to myself and companies I operate,” he said.

He confirmed unit owners could not make home warranty insurance claims because the residential part of the Landmark building is above the three-storey minimum where apartments are not covered by the insurance under NSW legislation.

In January the NSW Government announced a new developer defect bond scheme requiring developers to post a 2 per cent bond with NSW Fair Trading that can only be returned if no defects are found after two years.

Minister for Better Regulation Matt Kean said the new law was the result of “extensive industry consultation”.

I think it’s a clear fact there’s some defects in the building.

Landmark developer/builder Peter Durbin

But critics say the bond is too low, the time frame too short to identify some serious building defects, the inspection system could lead to conflicts of interest between inspectors and developers, the scheme includes a loophole potentially exempting many projects and the scheme does not address the bigger issue of when builders and developers make companies insolvent.     

Landmark documents show that by 2009 – as the building was winning a state excellence in construction award – a defect report was commissioned followed by another in 2011. The documents show that at least for a period in 2010 Mr Durbin was on the Landmark’s building management committee.

On November 20, 2014 the Landmark’s owners corporation took legal action against Nelson Bay Building and Mr Durbin’s development company, Kingston Piazza. Less than a month later Kingston Piazza – with Mr Durbin as sole director – applied for voluntary deregistration of the company and Kingston Piazza ceased to be a defendant in the court case.

In February the NSW Civil and Administrative Tribunal found the Landmark’s strata committee had breached a section of the Strata Schemes Management Act by failing to repair “clear” and “significant” defects requiring remediation which had been “known for some time”.

But the tribunal declined Mr Ellis’s application to have the strata committee replaced with a strata manager and found the committee had not acted unreasonably in trying to seek a lower quote for repairs after a quote of nearly $2 million to deal with urgent works.

Strata committee spokesman Mr Barry McCulloch said unit owners had to pay two special levies so far for $730,000 of repair works.

“It’s quite a slug, especially for the elderly. A lot are on pensions. We’re just trying to keep the levies down as low as possible,” Mr McCulloch said.

Mr Durbin said he was “not aware of any special levies that are occurring as I am not an owner in the building”.

Mr McCulloch said unit owners had complained to the Australian Investments and Securities Commission after Nelson Bay Building was liquidated, but ASIC replied that “these type of disputes are best resolved through communication with the insolvency practitioner appointed to the company, and not with formal intervention by ASIC’s investigators”.

ASIC, like other government authorities contacted by the Landmark unit owners over the years, had offered “sweet bugger all”, Mr McCulloch said.

Asked to comment on Mr Durbin’s response to the Landmark’s problems, Mr McCulloch said: “You couldn’t print it.”

This story Out in the cold – unit owners count the cost of building defects first appeared on Newcastle Herald.