How easily are water tightness issues fixed?

Discussion in 'Repairs & Maintenance' started by sharkling, 2nd May, 2021.

Join Australia's most dynamic and respected property investment community
  1. sharkling

    sharkling Member

    Joined:
    17th Mar, 2020
    Posts:
    22
    Location:
    NSW
    Hi property enthusiasts

    We have been looking for a place to buy and live in and then rent out the future in Sydney. We came across an apartment unit which is part of a large estate of about 100 units. These are not your typical multistorey apartments but rather a "terrace style" with only two storeys (one unit above and one unit below). They are relatively large units with decent yard space, a huge rumpus and the estate has a pool, tennis court etc.

    However, we found out that units in the estate has experienced water tightness issues and strata is taking the developer to court to force them to fix these issues. This has resulted in strata fees being increased to the tune of about $2000 per quarter currently to pay for the legal fees. Obviously this has resulted in some owners selling off at a lower price.

    Normally I would avoid buildings with issues like these but wonder if this could be an opportunistic buy if the water tightness issues can be fixed. So my question is how easily are water tightness issues in apartments fixed and would the fix last long term? Does anyone have similar stories to share regarding leaky apartments?

    Thank you ☺️
     
  2. Clean Cookie

    Clean Cookie Well-Known Member

    Joined:
    20th Mar, 2021
    Posts:
    385
    Location:
    Brisbane
    Be prepared to gut and reline ceilings/terraces to find and repair. I'd steer a mile clear unless it's 50% cheaper than next door and covers a full Reno. I had a job to locate a leak in an electrical conduit and took 2 weeks to find a minor leak and fix it correctly. Cost the owner 10k in damage and repairs.
     
  3. Joynz

    Joynz Well-Known Member

    Joined:
    5th Apr, 2016
    Posts:
    5,751
    Location:
    Melbourne
    How old is the apartment?

    re. The court action. Even if strata wins - the developer might find a way to get out of fixing it.
     
  4. bunkai

    bunkai Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    858
    Location:
    Sydney
    Where are the leaks? Your worst case above normal maintenance should be 8-10k for a balcony and 15k for a new bathroom very roughly. But these could be come at anytime in the next 15 years.

    What I would want to understand is exactly what the defect is and an estimate to fix. If the strata doesn't understand this then it us a red flag. If the OC is generically going after the builder and it is at a legal stage, they need to know what good looks like.
     
  5. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,449
    Location:
    Sydney
    I think try to get an understanding of worst case and then compare to how big a discount off market value you are getting. If its internal bathroom waterproofing, its generally more straightforward to resolve than roof membranes. Factor in some lost rent as well during rectification.

    We manage a unit in a large development where they got a settlement from the developer to repair waterproofing issues, however the issues in this unit were relatively minor and appeared late and now the strata have run out of the funds from the developer. A complex situation all around and possibly something the owner will have to pay for down the track.
     
    Last edited: 3rd May, 2021
  6. sharkling

    sharkling Member

    Joined:
    17th Mar, 2020
    Posts:
    22
    Location:
    NSW
    Thanks Clean Cookie. So we can safely say it will be a very expensive job regardless of who pays for it.
     
  7. sharkling

    sharkling Member

    Joined:
    17th Mar, 2020
    Posts:
    22
    Location:
    NSW
    It was built in 2008. The strata report suggests the problem started in the last three years, or at least they started doing something about it then. When do waterproofing issues normally start to appear?
     
    Last edited: 3rd May, 2021
  8. sharkling

    sharkling Member

    Joined:
    17th Mar, 2020
    Posts:
    22
    Location:
    NSW
    For the particular unit I saw, I didn't notice any leaks or cracking but the agent told us the rumpus had been affected and I assume that this was fixed or patched up to some extent. I believe most of the units in the estate are affected to varying degrees.

    I'm not sure about the specifics and how much strata is trying to get. Does each unit pay an equal amount of special levy regardless of how badly affected their unit is? It would seem unfair to be paying the same amount if your unit is minimally affected
     
  9. sharkling

    sharkling Member

    Joined:
    17th Mar, 2020
    Posts:
    22
    Location:
    NSW
    Hi Mel. Yes you are right. I don't think the discount we would be getting would be justified considering the complex and expensive issues that can crop up. Thanks for sharing