Buying an apartment that has leaked: good investment or not?
Apartments that were leaky and have now been fixed by are a good buy. This is because prior to the apartments being fixed the Council were sued for millions and millions of dollars for not doing a thorough Code of Compliance check upon completion of developments. The council are so thorough when checking a building that have been repaired, there simply is no room for error or upset.
Good day, Andrew Murray here from the Apartment Specialists. Today we will be talking about leaky buildings.
I don't mean by leaky buildings as in they are leaking now. It is the ones that have been fixed and have got their code of compliance from the council. Now, are these a good buy? In fact, I think they should actually have a premium. The reason why is, what happened with the councils is, especially in the 2000s, you had a lot of developers go bust. A lot of companies involved in the fixing and building of apartments, a lot of these construction companies go bust.
When you had a leaky issue, the last person standing is the council. The council got hit really hard, and has been getting hit really hard because of this. What they have done is, they have gone to the extreme where they were pretty, in my opinion, loose when it came to giving a code of compliance. Now, they have been so strict that it takes months and months to get this code. Sometimes it is almost the other way around.
Now, that is an extremely good thing. They do not want to be liable, they do not want to be sued for millions and millions of dollars like they have been. A building that has been fixed, and when I say that, I mean probably around 2010/2011 onwards. I do not believe the code of compliance process was as strict as it is now.
But a leaky building now that has been fixed, should actually have a premium. The last apartment I have just bought actually was a leaky building, and major one. I think it is an extremely good buy when I looked into it, with the new cladding systems and the code of compliance which is granted by the council, of course, and they are liable if it leaks.
You have to ask yourself that question: a building that has leaked and is now fixed is one of the best buys around, in my opinion, because you have that trust. You know that moving forward, everything has been done correctly.
Andrew Murray, Apartment Specialists.