What would have happened if Mascot Towers had Resilience Latent Defects Insurance
The disastrous structural problems at Mascot Towers, and to a similar extent, Opal Tower in Sydney Olympic Park, have significantly impacted people's perceptions of the off-the-plan apartment market.
Mascot Towers, built by J&B Elias Pty Ltd, was evacuated in 2019 due to cracking walls, while Opal Tower, in Sydney's Olympic Park, saw around a third of its residents evacuated for the same reason six months earlier, on Christmas Eve 2018.
The catastrophic failures of the developers and builders of these two towers, along with the ongoing fallout that continues for Mascot Towers owners even five years later, have been major issues in the Australian building environment.
These two major incidents, which constitute a small portion of the market but capture the headlines more than a completed building with no issue, unfortunately tarnishes the reputation of the broader industry, an industry which is seeking to provide housing for Australians.
Fortunately, significant changes have occurred in the building industry since then. Outgoing Building Commissioner David Chandler, who inspected residential development sites and publicly provided feedback on the construction process, asserts that prospective purchasers of off the plan apartments in NSW now face a more level playing field in their favor over recent years.
"This week, various industry and consumer forums have heard testimonies indicating a more trustworthy market. Purchasers are now empowered to make more informed decisions about investing in one of the largest purchases of their lives," Chandler recently stated.
New consumer-facing tools, such as the iCIRT rating service, have helped educate buyers on who are trustworthy developers and builders. Nonetheless, the 10-year Latent Defects Insurance offered by Resilience, remains unparallelled in instilling confidence.
Their new policy, Resilience LDI, protects buyers from structural defects for 10 years following the building's completion.
The Mascot Towers fiasco would have played out significantly differently had Latent Defect Insurance been available back then.
Corey Nugent, CEO of Resilience Insurance, believes several issues would not have occurred if the building had been covered by Resilience LDI.
"The first critical factor is build quality," Nugent explains. "Buildings covered by Resilience LDI undergo regular inspections by experts who assess construction quality frequently. This proactive approach ensures that potential problems are identified and rectified in the construction process, long before residents move in."
If any issues impacting structural integrity are missed during inspections, Resilience LDI steps in to protect both apartment owners and developers.
"We implement stringent construction checks to prevent such occurrences in LDI-covered buildings. However, should an issue arise, the policy kicks in immediately to rectify any problems," Nugent adds.
"If the issue renders the building unsafe for occupancy, affected homeowners are promptly provided with fully covered temporary accommodation. There's no protracted process of blaming and finger-pointing among developers and builders."
Developers currently collaborating with Resilience report that prospective buyers are more confident in purchasing properties covered by Resilience LDI. Research data from MatterFact, a data product from Urban.com.au, shows that 70% of off-the-plan apartment buyers would pay more if their apartment had the Resilience LDI policy.
Leading developers like Deicorp, Abadeen, Urban Property Group, Coronation Property and Princeton have already adopted the Resilience LDI policy for several projects and plan to utilize it in their future developments.
To find out more about Resilience Latent Defects Insurance, click here.
