When Veronica and Cliff Baker poured their life savings into purchasing a $1.1m three-bedroom penthouse in Sydney, they hoped it would be where they grew old and hosted their children and grandchildren.
They didn’t know that in 2019, they’d be evacuated from Mascot Towers in the city’s inner-south after cracks were discovered in the basement.
Nor did they know for the next four-and-a-half years, they’d be in limbo, living in the basement of their daughter’s home while paying thousands of dollars in strata fees, repair bills and legal costs.
Over Christmas, the state government – which certified the apartment blocks as fit for habitation – handed down a potential settlement to clear the massive debts of more than 130 apartment owners. But the Bakers – who are now in their late 70s and early 80s – say it will give them “next to nothing” and is being rushed through to avoid creating a precedent for other poorly structured housing.
“We don’t really know what we’re being offered because it’s gone through so quickly,” Veronica says. “How we’re going to live after this – we don’t really know.
“To leave us without a home at the age we are … we have no hope at all.”
The proposal
The closed-door deal – proposed by the NSW building commissioner, David Chandler, and to be inked with the consortium and significant creditor of the owners corporation Lannock Strata Finance – would wipe mortgagers debts, but is expected to give owners vastly less than the original purchase price.
However, it would allow residents with outstanding strata debts and mortgages on the 11-year-old building – which has been deemed too expensive for the strata to repair – to walk away from their losses.
While the Bakers don’t know what their individual lot will be worth, Chandler has indicated in meetings the total sale will be less than $42m – around a 70% loss on pre-evacuation values.
If that were the case, the Bakers would be offered less than $400,000 - enough to rent another property, but not to buy. When they left their Mascot Towers property, it was valued at $2.4m.
In mid-February, a formal proposal will be handed down, with owners given until 1 March to decide if they support it. A 75% majority is needed.
A spokesperson for the Building Commission of NSW says discussions were continuing with owners and lenders at Mascot Towers after being approached by Lannock to purchase individual apartments and the commissioner was “working tirelessly” to find a suitable resolution.
“The sale of lots strategy gives all owners their first chance in five years to make an individual choice to stay or sell,” they say.
“Both investors and mortgaged owners who elect to leave will have their share of the owners corporation’s $15m of strata debt forgiven.
“To date the NSW government has provided $21m in accommodation or investor support to impacted owners.”
‘Profound failure’
To the Bakers, the proposal comes as a bitter pill. They’ve paid off their mortgage, taken no rental assistance and never missed strata fees, which cost $8,000 a quarter.
Last year, Cliff was diagnosed with Parkinson’s, with an uncertain prognosis for the next few years of his life. The couple just want the value of the original purchase price of the property and to move on with their lives.
“We’ve lost four-and-a-half years of our retirement that we’ll never get back,” Veronica says. “And it seems we’re going to get such a small amount of money, we won’t even have enough to buy anything.”
The couple’s daughter, Kate Baker, says residents who’d paid off their mortgages would be left “effectively destitute” under the offer.
She wants the state government to buy the lots instead of engaging a third party and for them to extend an assistance package to the majority of owners.
“The NSW government is keen to assure voters that high-density living is the way forward and under their stewardship it can be done well,” she says.
“Mascot Towers is a glaring example of how it can result in profound failure.”
Save Mascot Towers Families wrote in an update at the end of December that the latest development would be viewed as a “breakthrough” for owners still in heavy mortgage debt.
“For owners … who have paid off their mortgage, there will be no help and they will bear 100% of the loss,” it wrote.
The 132 families that were evacuated from their homes have spent the past two years lobbying the state government via a change.org petition to improve construction regulations and hold developers responsible for defects in buildings.
The Bakers’ son, Craig Croxford, says his elderly parents had been robbed of the “happy, secure retirement that they had worked towards their entire lives”.
“They believed there would be speedy justice for them and other residents who had done nothing wrong … they never envisaged they’d be in this state of purgatory for five years,” he says.
“In many ways, you have more consumer protections when you purchase a fridge or a television in Sydney and it fails on you.”
