Opal Towers – Class action

Residents of Sydney’s Opal Tower have launched a class action against the New South Wales state government. It has been more than 7 months since residents were evacuated from their homes.

Documents lodged with the NSW Supreme Court last Friday revealed that owners of the western Sydney apartment tower are suing the Sydney Olympic Park Authority for a breach of warranty and of the Home Building Act.

Why are owners launching a class action?

Owners are seeking compensation for losses due to apartment values declining. Owners are also seeking compensation for the lost rental income over the last 7 months. They are seeking to be compensated for the retrospective income as well as any predicted rental losses for the future.

Many owners paid up to $2.5 million for apartments in the Opal Tower building. Some of these apartments were renting for more than $750 per week.

Opal Towers Builder and Developer

Ecove, the developer of Opal Tower, and Icon, the builder, could still be liable for cross claims they are not the focus of the lawsuit.

It is understood that Icon has full liability insurance for the project. Depending on the size of the resident’s apartment, Icon have been funding accommodation costs for displaced residents with funds between $220 and $500 per day plus expenses.

Icon’s parent company, Japan’s Kajima Corporation, agreed to extend the warranty on defects at the Opal Tower. The extended warranty was agreed upon earlier this year extending from the statutory six years to 20 years.

What’s next?

The NSW state government have released a discussion paper on the proposed reforms to overhaul the building and construction industry.

The planned reforms are stated as follows:

  • Requiring “building designers’, such as architects, engineers and other building practitioners who provide final designs and/or specifications of elements of buildings to declare that the building plans specify a building which will comply with building regulations, including the BCA.
  • Introducing a new registration scheme for currently unregistered designers and commercial builders who intend to make declarations.
  • Ensuring that building practitioners owe a common law duty of care to owners’ corporations and subsequent residential homeowners, as well as unsophisticated development clients.
  • Appointing a Building Commissioner to act as the consolidated regulator for the construction industry, with powers to investigate and take disciplinary action against building practitioners that engage improper conduct.

Sydney based agent Joseph Fairchild expressed that “If you look at projects like Crown or Lend Lease’s Darling Square, these are very credible developers with no issues whatsoever that we have sold properties in recently, and I have not had one client ask me about structural issues or whether they are going to collapse”. Although buyers do not appear to be deterred from purchasing strata properties, the planned reforms bring peace of mind to potential buyers who are buying into strata properties.  

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