News State NSW News ‘There will be bankruptcies’: Mascot Towers owners urged to sell

‘There will be bankruptcies’: Mascot Towers owners urged to sell

mascot towers sale
The saga started two years ago, with the discovery of cracks in the building's basement. Photo: AAP
Twitter Facebook Reddit Pinterest Email

Owners of apartments in the troubled Mascot Towers building have been advised it is no longer financially viable to fix the building and that their best option is to sell up.

At a meeting on Thursday night, owners were told several developers are interested in buying the building with a view to demolishing it and rebuilding from scratch.

Chair of the Mascot Towers owners’ corporation Gary Deigan told the ABC: “The only solution in our mind is to sell the building off.”

“We have lost a lot of money. We have to decide whether we are going to continue to lose money or try to recover some.”

It is almost two years since residents were evacuated from the 10-storey building’s 132 apartments after cracks were found in the basement.

Since then, they have not been able to live in the building and nine owners of commercial premises on the ground floor have also been locked out on safety grounds.

During the meeting in Maroubra, the Mascot Towers owners’ corporation told owners that in the event of a sale going ahead, they should expect to take a loss of about 70-80 per cent.

Someone who, for example, paid $1 million for their apartment would receive $200,000-$300,000 from the sale.

“Undoubtedly there will be bankruptcies, ” Mr Deigan said.

“But the longer we do it, the more money we lose.”

Treacy Sheehan bought a three-bedroom penthouse apartment with city views for $900,000 in 2014.

She supports the proposal to sell up.

“You would be mad not to do the collective sale,” she said.

“People are absolutely suicidal.”

mascot towers sale
Treacy Sheehan says she has suffered depression due to her ordeal with the Mascot Towers. Photo: ABC

For the past two years, she has lived in rental accommodation with her four-year-old son.

“We have moved five times since we were evacuated,” she said.

Ms Sheehan said the entire ordeal had left her suffering depression.

“What’s the Australian dream all about? You have a $1.3 million property that’s worth zero and that’s your life savings.”

The owners’ corporation has been told it will cost $38 million to fix the building, which will blow out to $64 million including interest over the course of a 15-year loan.

“It means a three-bedroom unit owner will be paying $2000 a week for 15 years,” Mr Deigan said.

He said the escalating costs had left many unable to meet repayments.

“We can’t have a situation where some owners can’t pay and others are supposed to foot the bill,” he said.

In the event of a sale, the money will be used to pay off the $16 million debt the owners’ corporation has incurred so far in trying to fix the building.

The balance would then be distributed among the owners, depending on the size of their property.

“If we can vote yes now and get 100 per cent over the line, we can at least get something out of the wreck,” Mr Deigan said.

“If we have to wait 12 or 18 months, it just means we’ve got millions of more dollars of costs, which come out of everybody’s pocket.”

Fabiano dos Santos bought a two-bedroom apartment for $950,000 just months before residents were told it was not safe to stay.

He supports the sale even though for him, with a mortgage of $900,000, it will mean financial ruin.

“That is going to push me to bankruptcy,” he said.

“But we 100 per cent have to sell. Pretty much the only way out is to sell and try to move on.”

mascot towers sale
Fabiano dos Santos supports a sale, even though it will send him bankrupt. Photo: ABC

For the sale to go ahead, it will need the support of all 141 owners.

Mr dos Santos said he thought that was unlikely as the meeting was “pretty divided.”

He said he would campaign to convince other owners to support the sale.

“If we don’t take this opportunity, we can’t sell within 12 months.”

Owners have two weeks to consider the proposal before it is put to a vote at the annual meeting.