Buyer beware: new rorts targeting apartment buyers

An article in the Sydney Morning Herald titled ‘Buyer beware: Warnings of ‘rorts’ for new apartment buyers’ exposes a new rort affecting apartment buyers locking them into expensive long-term contracts for basic services such as the installation of gas, electricity, air conditioning and so on.

The article, which quotes from some well-known SCA (NSW) experts, says that “some owners corporations have found themselves signed up to paying $6000 per annum for the maintenance of stormwater drains on a 99-year lease – something that might normally cost $2000 a year, being $1000 to change the filter annually and four quarterly cleans at $250 each. Instead, the $4000 extra they’re paying a year is the payback to build the system.”

While all dealings between the developers and buyers should be transparent, “there are reports that this is happening more and more frequently across Sydney as the market for new apartments softens and developers’ profit margins are squeezed. The unsuspecting buyer can then end up the loser.”

Strata managers are also left to deal with this and are often put in a difficult position between developer (who can easily replace a strata manager who does not carry out their instructions) and the owners who are left having to pay far more money than they should.

Any instance of this occurring should be referred to NSW Fair Trading which will be able to provide some guidance.