This article is from the Australian Property Journal archive
SYDNEY property developer Toplace, which last year agreed to be liable for any structural defects in its $900 million Skyview project, is scrambling to find another builder to deliver its projects after its building licence was permanently revoked.
Following a lengthy investigation, the NSW Department of Fair Trading has also suspended Toplace’s founder Jean Nassif from holding a building licence for 10 years, with these bans coming into effect this week.
The ABC reported that the department’s 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 has over 1,000 apartments under construction across Sydney and 24 projects in its development pipeline including:
- Box Hill City Centre; 888 Bourke in Zetland; Hyda, Phoenix and Vela in Castle Hill; Grand in Kellyville; Watkins Street Town Homes in Baulkham Hills; Astral in Granville;
- Vogue Apartments and Jolyn Place, both in Rosebery;
- Park Side, East Square, Air View, John Street, Landis, and Wings – all in Mascot;
- Pemberton on the Park, Park Grove West, Banksia & Boronia, and Park – all in Botany;
- Riviera, Macquarie Towers, and Rise, all in Parramatta;
- And Parkland in Hillsdale, Habitat, and Vicinity in Canterbury;
The ban has placed pressure on Toplace to find a third party builder to continue construction on its projects.
A company spokesperson told the ABC that “Toplace will continue as a developer and construction will continue on Toplace sites without interruption with alternative arrangements in place,”
The company also said it intends to challenge the bans.
“Toplace has always stood by its projects and where defects have occurred it has returned to fix them like all other major developers.”
Toplace has clashed with the department repeatedly over alleged defects.
The company made headlines in July last year after it agreed to be liable for any current and future defects across almost 1,000 apartments at its $900 million Skyview development in Castle Hill in exchange for the NSW Building Commissioner David Chandler lifting its prohibition order.
The agreement came after Commissioner Chandler issued an order preventing buyers in two of the five towers from moving in after inspectors uncovered structural defects in the basements of the first two completed apartments.
In order for the order to be lifted, Toplace founder Jean Nassif signed an agreement, backed by an $11 million security guarantee – the first agreement of its kind in NSW. The legally enforceable agreement will mean an independent engineer will monitor the structure of the basement over the next 10 years with the owners corporation receiving a 20-year structural guarantee and a 10 year commitment to amend and cover the costs of any future defects.
The government has been strengthening protections for buyers of residential apartments against defects in the wake of the Opal Tower and Mascot Towers incidents and resulting NSW government inquiry, Resilience Insurance launched this year a latent defects insurance (LDI) specially designed for high-rise residential property.
Mascot Towers residents were evacuated from the inner Sydney apartment building on a Friday night three years ago after cracks were discovered in its basement. That happened six months after nearly 3,000 Opal Tower residents in Sydney Olympic Park were forced out of their homes on the previous Christmas Eve due to structural defects. A subsequent review recommended an overhaul of the construction industry, while the Mascot Towers Owners Corporation told the NSW government inquiry into the regulation of building standards, quality and disputes in 2019 that buyers have more consumer protection buying a $1,000 television than a multimillion-dollar apartment.
In October, Minister for Fair Trading, Victor Dominello said buyers will be able to have their homes insured against building defects for 10 years in what is the first of its type in Australia.
“This is bad news for … bad developers,” Dominello said.
“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,” Chandler said at the time.
Meanwhile in a statement to the ABC, the department said Toplace and its owner have 28 days to appeal its decision.
“Toplace and Mr Nassif have 28 days from the date of the disciplinary decisions to lodge an internal review or appeal to the NSW Civil and Administrative Tribunal,” a NSW Fair Trading spokesperson said in a statement.
“To date, no application has been made.”
Toplace maintains that the department is wrong and is confident its challenge will be successful.
“Toplace will challenge the notices issued and is confident that the court will overturn the notices.
“The department has a track record of issuing defective notices to Toplace which have failed when subject to external scrutiny.”
