Dangers of OTP Apartment Purchases - Contract Rescission before Settlement

I was thinking the same! makes no sense!

 

There is also a site in Lidcombe in Kerr Street which is still awaiting approval for it to commence building. They've advertised it for so long but no progress to the construction, so it happens.

I do feel bad for anyone that made any investments for OTP constructions, I've personally bought one townhouse OTP when the market and lending criteria was pretty 'normal' and not crazy as it is now.

 

Will share when I return home from work... will be happy to reveal more information. It's quite a complicated story ...

 

We're all ears!

 

Without the Auburn council cowboys green lighting projects and all, it has prob become a tad harder....actual regs etc now instead of paper bags possibly ???

 

OTPs can work but they require more research and due diligence.
After selecting an area, First and most important point of check is the 'developer'. Who is it, how long they've been operating, what are their past projects etc.
Most of the times you'll notice that the well reputed developers pick locations very carefully and their past projects are all successful. So you can trust in what they deliver.

 

Ok... here is a more detailed summary, hope it makes sense:

• Homebush West Centenary Park is the complex in question (a quick Google search can give you some more insight into the recent controversy)
• The contract rescission letter was issued yesterday (Monday, 29th of May, 2017), yet there was a motion by Councillors from Strathfield that overturned the planning in September, 2016 (go figure).
  • http://www.strathfield.nsw.gov.au/assets/Minutes-Council-Meeting-6-September-2016.pdf
• Would like to stress that the property developer and the exclusive real estate agent are NOT to blame. There seems to be other factors at play that I have no knowledge of.

Contents of letter from the Developer

In the letter from the property developer, it states that the council rejected their Development Application that would have allowed the developer to build the apartment my aunt agreed to purchase (complex was suppose to have 5 floors, but now only 4 floors are to be built, unfortunately the affected parties are those that bought the top floor)

Although the property developer secured support from the planning staff from the council and secured direct approval from the council, however immediately following approval, a rescission motion was signed by some elected Councillors and in September 2016, the rescission motion was carried out and the development application was rejected.

Since the rejection, the property developer has been in discussion with the council to revive the approval, however the council has not been supportive.

 

That's a good question... I don't know... I'm just the messenger...

 

The first google search result is a news article stating all the construction problems. How is that not the developer's fault? Your friends probably dodged a bullet.

 

You actually bought into this bullcrap from the developer ?

The council rejected a DA. This means the developer NEVER had a DA to build 5 levels. They were approved to build 4. That's it.

I would not be buying anything off the plan that DOES NOT have COUNCIL APPROVAL - that's just plain stupid.

Translation - the build thought they had passed around enough brown paper bags full of cash and were assured by the dodgy councillors that they would vote in favour of a Section 96 Amendment.

The developers original plan to build 4 stories probably exceed all sorts of building requirements (FSR/Building Height/Green Space/ etc), but they got that approved. They then banked on being able to get Section 96 approval to build more.

Looks like the residents won for once and the builder got told to F off.

And there's something called Land Environmental Courts.... but the dodgy developer probably knows they'll get declined there because what they are asking for is a complete **** take of the rules. So hence they saying the "council is not supportive".

Now lets puts things into perspective, if your relatives were already living there and then found about this BS extra story which would shadow them and cause more overcrowding, how would they feel then?

Very different when the shoes on the other foot.

The lesson here is DON'T LISTEN TO THE LIES THE BUILDER FEEDS YOU.
If you're dumb enough to believe it, then as the saying goes, a fool and his money are soon parted.

 

I've been out to that site a few times, it must have been one of the later stages of the build.

Because construction has been going hammer and tong for years.

I'd put partial blame on council.

That site backs onto massive railways, and imo should easily afford the height. Definitely along the train track edge as I can't see shadowing being an issue and anything to block the sound/view would be appreciated.

 

Maybe in Sydney but usually gets val at contract price and often below elsewhere except Melbourne.

Lots of other risks with OTPs to be aware off but if a rising market should be sweet.

I heard of a developer changing the floor plan therefore loosing an apartment so the vendors contract was rescinded and yes the was in the contract.

 

Well said... obviously I can't see the wood for the trees when it comes to deciphering legal jargon coming from property developers. I'll pass the info on to my relatives. Really appreciate it.

 

Yep +1 for only signing OTP when DA is fully approved. Strange though, I didn't know there's such thing as "pre-approval" for DA.

 

I'm surprised the developer didn't just build the extra apartments anyway. I know someone who is a compliance officer for a council, and he said it happens quite often. Because in the end the developer gets a fine for building more than was planned, but they more than cover it in the extra profits for the additional apartments sold.
Even Burwood council's own deputy mayor over developed!
Burwood Council takes deputy mayor Tony Doueihi to court for boarding house breach

Regarding pre-DA, some councils do it to try and sort any issues before they get too far in to the real DA before any real money is spent.
Eg, Burwood http://www.burwood.nsw.gov.au/verve...lopment_Application_-_Meetings_Fact_Sheet.pdf

 

As they say, its easier to ask for forgiveness than permission.

That said, I do believe the council has the power to request a demolition if they want to take it that far (if the developer decides to build first ask later).

 

Truth is, people hear what they want to hear.

What I've come to realise is that residents don't like complaining to council and generally feel that "someone else will do it" or "what good will me raising a complaint to, council is going approve anyway".

Developers bank on this occurring and as a result they can get away with completely breaching the DCPs while a guy who wants to get a carport installed gets made an example of by the council.

Until they pass a law saying OTP cannot be sold without Development Consent, this stuff will continue to happen.

 

Ok contact me, i've got about 20 owners in the same situation with contracts rescinded.

 

Hi Lazysnail,

I've pinged you a PM.

Hope to hear from you soon.

Best regards,

Ed

 

@Ekin 200 let us know how the class action suit progress goes?
I never thought this would be possible, but who knows it might be working out well for you.