This article is from the Australian Property Journal archive
DEVELOPER Haitchin Group has been approved to include Latent Defects Insurance to its Infinity Park mixed-use masterplan project in Sydney’s Norwest, becoming the first and only development in the precinct to offer LDI.
Recently introduced in Australia by Resilience Insurance, LDI provides property owners with a 10-year warranty post building completion.
Haitchin’s general manager Robert Tasveski said LDI provides peace of mind and reassurance to off the plan purchasers at Infinity Park, knowing that they have a 10 Year warranty against any structural defects.
“Latent Defects Insurance is intended to prevent the occurrence of structural defects in the first place. Just like car or private health insurance, you hope you never need to use it but if you do, you’re happy you have it,” he said.
“Importantly, its only offered to developers and builders deemed trustworthy by the insurer, Resilience Insurance. In order to receive the insurance, Infinity Park must pass rigorous and regular assessments by independent technical inspectors that ensure the quality of the construction is upheld.
“With the monthly inspections, if they find something that needs fixing, it needs to be rectified before the project proceeds to the next step.” Tasveski said.
LDI must be taken out by either the developer or builder before construction starts, as the insurance effectively follows the whole project lifecycle and includes a complete examination of plans, specifications and other documentation, as well as monthly audits by independent technical inspectors through to certification of Practical Completion.
Once the 10-year warranty period expires, the strata corporation can transition to new insurance policies to protect their apartment buildings. This is expected to be at a lower premium than would otherwise be charged.
LDI is now seen as a tick of approval for a property developer which has followed best practice. More off-the-plan buyers are also voting with the wallets and will only look for developers with LDI, following a string of building defect scandals in NSW, the most high-profile was the Opal Tower by Icon on Christmas Eve in 2019 and Mascot Towers.
Icon’s Japanese parent company, Kajima Corporation agreed to pay rental compensation for apartment owners, as landlords struggle with lost or reduced rent after structural issues were discovered, whilst homeowners and investors have reportedly struggled to sell their apartments after the scandal, facing heavy losses.
Two years ago controversial property developer Toplace had its building licence permanently revoked and the NSW Department of Fair Trading also suspended the company’s founder Jean Nassif from holding a building licence for 10 years, after a department investigation uncovered over 40 alleged defects in residential developments including the Atmosphere and Skyview at Castle Hill in Sydney’s north-west, and the Vicinity in the city’s inner west suburb of Canterbury.
Toplace folded in middle of last year and its founder Jean Nassif is on the run after an arrest warrant was issued over an alleged large-scale fraud relating to his company’s 900-unit Skyview Apartments project in Castle Hill.
His daughter, Sydney lawyer Ashlyn Nassif, has been arrested for allegedly falsifying a $10.5 million pre-condition to secure a $150 million loan from Westpac for the development. She is also being investigated by the same strike force as her father, and is not allowed to contact him as part of her bail conditions.
Jean Nassif is believed to be in Lebanon, although authorities are unable to confirm his location and Lebanon, whilst Australia do not have an extradition treaty.
NSW Building Commissioner David Chandler said LDI is the latest reform to the building and construction industry which will improve the design and construction of apartment buildings in NSW.
“These reforms have come about due to the united commitment of government and industry to transform the NSW construction sector.
“NSW is now in the position of being a national leader in offering an insurance product of this type for Class 2 buildings because of the three years of conscious effort and commitment by Government and industry to the journey we have been on under Construct NSW.
“We’re looking to clean up the market and bring an end to expensive litigations against developers who have deep pockets or subsequently vanish into thin air.”
Haitchin has partnered with construction company, CJCA to deliver the project. Independent specialist, Construction Consultants Pty Ltd will oversee the construction process, managed by director, Michael Dakhoul to ensure the project is delivered to the highest construction standards.
