Five years, millions of dollars: The battle to fix a defective Sydney building

When Andrew and Lisa Cook moved into their new apartment in Baulkham Hills on December 12, 2020, they thought they were getting the dream: a modern unit, a sprawling balcony with views of the city skyline and access to shops at the base of their building.

Just 23 days later, the dream became a nightmare: the company that developed the building collapsed. Ten months after that, the state’s building regulator identified serious defects in the development, including one that was labelled a “hazard to human life”.

The Cooks were shocked. They didn’t know who would be responsible for fixing the defects, and what it meant for their new home. “[We were] a bit scared because they didn’t know what was going to happen at the time,” Lisa said.

Known then as the Modena, the four-tower project was developed by Hills Shoppingtown Pty Ltd, a subsidiary of Dyldam Group – once one of NSW’s biggest apartment builders before it collapsed with debts of half a billion dollars .

There were 230 apartments and plans for a retail precinct in a project designed to combine luxury and comfort. When the receivers for the development and the building regulator visited the site, they found it was far from that vision.

In addition to non-compliant waterproofing, an awning in danger of collapse, balconies without water overflows, the glass elevator – designed as a key feature for the project – had already rusted and was leaning slightly.

For five years, the Cooks and a handful of other residents have lived in a construction zone as millions of dollars were funnelled into rectifying defects. The scale of the work is so significant that the Cooks have lived in another unit since January while work on their own apartment continues.

“There’s been a lot of noise for quite a few years, so that’s sort of a bad thing, but I keep thinking they’re doing it, they’re fixing it, it’s not costing us any money,” Andrew said.

Buying a home with defects is not an uncommon experience in NSW. Building Commission NSW ordered major developer Bathla Group, which entered voluntary administration last month , to fix serious defects in two of its developments. It’s left those who purchased off the plan uncertain if they would ever move in .

So when developers collapse owing millions of dollars, how do you fix a defective building?

When McGrathNicol was appointed the receiver of the Modena development in 2021, partner Jason Ireland said they were told the project was 95 per cent complete. But what was anticipated to be a quick fix soon became a mammoth project that would take years and $70 million to rectify defects – bringing the total cost of completing the development to $185 million.

Ireland describes the project as being a bit like an onion, “in that when you peeled back [layers], you found more problems that made you cry,” he said. More than 60 defects were found throughout the four buildings.

Fixing the overflow holes in balconies was considered a simple job. Then the tiles began to be removed, and a new problem appeared: No one could identify what waterproofing material had been used.