Owners of units in Sydney’s Opal Tower are seeking millions of dollars in compensation from the state government in a class-action lawsuit.
In documents lodged with the NSW Supreme Court late on Friday, owners of the western Sydney apartment tower are suing the Sydney Olympic Park Authority (SOPA), the owner of the land on which the Opal Tower sits.
The Sydney Olympic Park Authority is a NSW government-controlled entity, meaning residents are effectively suing the Berejiklian government – not the developer or builder.
The lawsuit claims a “breach of warranty” and that design and construction of the $170 million apartment complex, which was evacuated on Christmas Eve after residents spotted cracks in its foundations, was not designed or constructed with “due care and skill”.
It is claiming a breach of the Home Building Act, in that the tower was not built in accordance with the plans and specifications.
“Opal Tower was not reasonably fit for occupation,” the claim states.
The owners, hundreds of whom have now been in temporary accommodation for more than seven months, are also claiming losses due to a drop in the value of the apartments and a loss of rental value.
No exact monetary figure has yet been put on the suit, but the claim is expected to run into the multimillions.
Some owners paid up to $2.5 million for apartments in the building, and larger apartments demanded rents of more than $750 per week.
Since the Christmas Eve evacuation, property insiders say the market has put a red mark on the building, with almost no buying, selling or new rentals of the 392 apartments in the tower.
The lawsuit is being led by Opal Tower resident Terry Williamson, who is being represented by law firm Corrs Chambers Westgarth.
Mr Williamson and the law firm declined to comment.
The exact number of residents involved in the lawsuit is not yet known.
It is an open class action, meaning all owners are group members unless they opt out.
The ABC understands the response from owners has been strong.
The first steps of the process kicked off last month, with documents lodged to the NSW Supreme Court by Corrs Chambers Westgarth seeking what is known as a “preliminary discovery application” to gain access to designs and contracts relating to the design of Opal Tower.
Ecove, the developer of Opal Tower, and Icon, the builder, are all aware of the impending lawsuit following the application.
Though they are not the focus of the lawsuit, they could still be liable through cross-claims.
Rather than suing the builder or developer, the ABC understands SOPA has been picked out because it was the original owner of the site and, under a revision to the Home Building Act in 2011, considered the “developer” as it owns 12 affordable-housing apartments in Opal Tower.
There is also a guarantee it will have the money to pay the compensation – if the class action suit was successful – whereas the developer and builder could be forced into administration.
SOPA said it would not comment as the matter was before the courts.
The class action is also predicted to have wide-ranging flow-on effects and could act as precedent for residents in Mascot Towers, which was evacuated last month, and any other apartment blocks suffering endemic structural problems sweeping the industry.
According to Ecove, 117 apartments out of 169 that were still vacant in April in Opal Tower have now been re-occupied.
Another 40 apartments will be ready next week, leaving 12 still unoccupied.