Builder Diploma Group's collapse hurts apartment owners in Perth
Listed developer Diploma Group’s collapse has turned Perth’s biggest apartment complex into a “nightmare” for its residents, catching the attention of state government MPs.
The development in question is the $450 million Queens Riverside complex in East Perth, billed as being part of a wave of trendy developments that would bring life into the city when it was built during the mining boom, the Perth Now reported.
The Queens Riverside was finished in 2014, with three apartment towers. But one of the main builders behind the development — Diploma Group — went bust.
Residents of the sections built by Diploma have reported major defects such as leaks and faulty windows, with owners being hit with wildly varying bills over a malfunctioning complex thermal power system.
The base of the complex, one of the three apartment towers and the Fraser Suites Perth Hotel were built by Diploma.
It has proved a headache for the developer Frasers Property, with as many as 160 apartments unsold.
Labor MPs have now been drawn into the debate, and are saying WA urgently needs to re-write dated strata title laws to give better protection to apartment owners, the article in Perth Now said.
Residents spokeswoman Lani Tuckfield said strata management levies had risen more than 110 per cent since people moved in and owners are asking whether the increases are to fix defects that should have been noticed when they first bought. Some owners who would like to sell are unable to because of the defects.
Residents say Frasers is using its weight of numbers through the big number of unsold apartments to block a push for transparency.
Labor member for Perth John Carey, who met about 100 residents last week, said strata laws needed changing to give people confidence they would be protected when buying into apartment complexes.
“We definitely need inner-city living — unfortunately, I don’t think this is a rare occurrence and it leaves a bad taste in people’s mouths,” Carey said.
A Frasers spokesman said it supported the rights of all owners to vote “without prejudice” in alignment with the Strata Titles Act of 1985.
It said the rise in rates was mainly because of advice from strata manager Colliers International there was “insufficient working capital”, unpaid and unaccounted for invoices and incorrect allocation of expenses when Colliers took over as strata managers last year.
Colliers said strata levies were not used to repair building defects. Colliers said it manages the strata levies which go to an administration fund for day-to-day running of the strata scheme and a reserve fund.
Diploma, a 40-year-old company controlled by the Di Latte family, went into administration late last year with debts of $40 million. Creditors include sub-contractors and the ATO. Matthew Donnelly, David Hodgson and Andrew Hewitt of Grant Thornton were announced the administrators.
