Investor fears as tenants evacuated from towers in Sydney
by Paul Stafford | June 20, 2019 |
Mascot Towers in Sydney's Mascot area have seen tenants evacuated as construction issues have deemed the building to possibly be uninhabitable.
With tenant evacuations this has posed 3 significant problems for landlords.
- no rent would be forthcoming from tenants whilst they cannot occupy their apartment
- landlords may be responsible for alternate living arrangements for the tenants under there lease agreements
- mortgage payments would still be required to banks, with no income
Ongoing problems even if the building issues appear to be resolved is that they property may remain untenanted indefinitely should potential tenants refuse to accept leases within the building with such a reputation.
Peter Koulizos, chairman of the Property Investment Professionals of Australia, is commented.
“It’s certainly a very difficult position for the… tenant, and it’s also a difficult position for the investor because the bank still wants their mortgage repayment, even though they may not be collecting any rent and may not be collecting any rent for a while until things are rectified,” Mr Koulizos said.
Andrew Hrsto, managing director of developer Aland Developments Group, outright rejected claims that his construction of the Up-Market Peak Towers was the cause of the problem.
“Recent media speculation attempting to link Aland’s high-quality project Peak Towers and the unfortunate events for the owners and occupiers of Mascot Towers is not only wrong but without any evidence,” Mr Hrsto said.
“Independent investigations are being undertaken to determine the cause of structural damage to the 10-year old Mascot Towers at 1 - 5 Bourke St Mascot.
“Until these investigations have been completed, speculation about the cause of the damage is unhelpful.”
The important thing here is for landlords not to go into a panic mode and try to sell their apartment at this time. Tenancy issues would only be a concern for the shorter term as memories of the situation die down, and eventually the apartments would be re-tenanted.
It is quite possible that once investigations have been completed by engineers that no structural damage is ongoing and repairs could be made to ensure stability of the building.
Mr Koulizos stated “It (the investigation) might find that there was actually nothing wrong with the integrity of Mascot Towers, it was the construction of the building next door which may have damaged the foundations and the developer next door is liable to fix the building.”
“Maybe Mascot Towers will end up being better than new in time to come.”
This problem and the earlier problem with Opal Tower is the need for the NSW Government to take serious charge here and bring much needed change to the building and construction industry in NSW.
“NSW has been slow to move, but it is not too late if we start now,” Jonathan Russell, national manager of public affairs at Engineers Australia, said in a statement.
