Mascot towers remains uninhabitable, more than four years after residents were forced to evacuate when cracks were found in the basement. Now, owners are been offered a chance to cancel their strata debts and outstanding mortgages.
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00:00 Well, up until now the owners have really been on the other side of a court proceeding
00:06 to actually give them permission to wind up their strata plan and to sell the building.
00:12 And of course that didn't succeed in the Supreme Court in the 24th of November last year.
00:17 So I've been tasked with looking at what the alternatives are and so we have come up with
00:23 an alternative which is rather than a sale of buildings support strategy, a sale of individual
00:29 apartments support strategy where those owners who might like to take the opportunity to
00:35 walk away and leave the building behind them have an opportunity to do so.
00:39 So we're canvassing that with the owners.
00:41 Of course it's got to be their choice.
00:43 This is a very stressful, very stressful situation for them and I empathise with them.
00:48 There'll be no winners here but what I'm at least getting feedback is that people are
00:54 sort of very keen to see an opportunity to leave this nightmare behind them.
00:59 Yeah, so essentially cancelling the debt but walking away with no equity in that.
01:05 Can I get some further information from you about the reaction that you're getting so
01:08 far from this?
01:11 Look, it's quite mixed.
01:14 I've been meeting with the owners on a small group basis, so 20 odd at a time.
01:21 This is not the sort of conversation that I wanted to have with a large number in one
01:24 space.
01:25 I wanted to sit down and look at people in the eye.
01:27 So I've been able to sort of read the room as well as be very present in terms of dealing
01:33 with their questions.
01:34 Obviously they've got lots of detail questions.
01:38 I think there was a relief by the majority.
01:41 There was still anxiety by a few who still feel that there could be more done for them
01:46 but the reality is what we're talking about now is the way forward and that there's no
01:52 other options.
01:54 We really set out to give them plenty of time to actually consider these options that they
02:00 now have in front of them.
02:01 So that's why they had them before Christmas and they don't really need to come back to
02:05 us until sometime in early February to tell us what they've elected to do.
02:10 Do you need a certain percentage of them to agree to this lifeline?
02:18 Seventy-five per cent of the owners need to agree that they want to be the sellers and
02:26 that is obviously seventy-five per cent of the unit entitlements of the owners.
02:30 So it's just not a simple number.
02:32 It's unit entitlements.
02:34 So it needs to be seventy-five per cent of them to agree to come along with this.
02:38 Look, I think that by and large that will happen but it's a long way to the end yet.
02:45 It appears that some will do better than others out of this deal.
02:48 Can you break that down for us and is there a difference between owner-occupiers and investors
02:53 or old versus young?
02:56 Yes, there are some differences in the parties.
03:01 Obviously the first objective was to ensure that people who had mascot towers related
03:05 debt were able to walk away without any of that debt following them into their future.
03:10 So that's first and foremost.
03:15 This solution though is only available to owner-occupiers, eligible owner-occupiers
03:21 and it's not available to investors.
03:24 Investors make decisions to invest in a range of investments where their taxation arrangements
03:29 are quite different.
03:30 They have negative gearing and they have capital loss opportunities.
03:34 Owner-occupiers don't have that so this is particularly targeted at people who are legitimate
03:39 or eligible owner-occupiers.
03:41 The number will be different for everybody because everybody's mortgage profile is different.
03:46 There is no way that you can come up with a grand number that you apply to everybody
03:50 so we've had to do this on a very granular basis to make sure that we deal with every
03:54 circumstance as every circumstance exists.
03:58 Now there is a special group as well and they're the older people, people over 65 and there
04:03 might be some people who've got particular hardships and our mandate is to have a look
04:10 and see what can be done to help them but that will only be able to be possible if the
04:15 whole exercise proceeds where a sufficient number of owners decide to walk away and take
04:21 this opportunity to leave the building behind them.
04:24 And David Chandler, is the assessment that, I mean this isn't anyone's option A, but it
04:28 may be the best option on the table here?
04:33 Well our team has waxed on this for all this year.
04:37 I've been working on this.
04:39 I've been really involved with this project since the day I was appointed as building
04:42 commissioner but in regard to this particular solution I've been pretty well, half of my
04:47 time this year has been spent on looking at what are the options for Mascot Towers people.
04:53 Of course all of that's been governed by the fact that they were in the Supreme Court trying
04:58 to wrap up the owners corporation and sell the building.
05:02 That didn't happen on the 24th of November which must have been very, very stressful
05:07 but we've been working on this for most of the year so hopefully we've come up with a
05:11 solution that we can get broad support.
05:16 Don't forget that the lenders to these people have got to be part of this solution.
05:22 They've got to be part of this solution and then of course subject to them all being in
05:26 the tent then I can go back to the government and say well I've got a formal and clear way
05:31 forward.
05:33 Is there a basis now to provide the economic support to put the bookend in on this?
05:38 Lots of pieces to be done to get this across the line but first of all I just want to empathise
05:43 with these owners.
05:44 This is not a great outcome but at least it's an outcome where they can move on with their
05:49 lives.
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