$2.2m to $400k: Nightmare facing retirees

After four years of frustration, owners of Sydney’s Mascot Towers are fighting for a better deal that would give residents with $2.4m homes with just $400k. Picture: NCA NewsWire/ Gaye Gerard

Despite their three-bedroom Sydney penthouse being evaluated at $2.2m in 2019, two Sydney retirees have had their retirement devastated, with the couple set to receive just about $400,000 on the potential sale of their home.

In June 2019, Veronica and Clifton Baker were among the 130 Mascot Tower residents who were forced to evacuate their homes due to cracking in the defect-riddled building.

In the four years since then they’ve been left financially devastated.

While owners have been offered a deal which could relieve them of the legal and financial burden of being tied to the faulty unit block, the sale would see the Bakers lose hundreds of thousands of dollars on the home they bought using funds from the sale of their family home.

Their daughter, Kate Baker said the amount will preclude her parents from purchasing another property in Sydney, and force them into a crowded rental market.

“They sold the family home and bought a three bedroom apartment in Mascot Towers for their retirement. It’s their only asset and that’s all lost now,” she said.

“They needed that capital, that’s what they worked all their lives for and it’s their money.”

Residents in the 130 units in Mascot Towers were evacuated in 2019 after structural defects threatened the safety of the building. Picture: NCA NewsWire / Tim Pascoe

After years of protest, anger, and disappointment, burnt out Mascot Towers owners have finally been offered the first semblance of a deal.

On the table is an offer led by NSW Building Commissioner David Chandler, which would see a commercial consortium, including Lannock Strata Finance, purchase the individual units from owners.

Owner-occupiers, who were living in the apartments at the time of the June 2019 evacuation, will also have their mortgages forgiven in an agreement between the banks and the state government.

However residents, like the Bakers, who have significantly paid off their mortgages, or bought their homes outright stand to make a significant loss.

Debts on strata levies will also be wiped under a seperate agreement with the Mascot Towers Owners Corporation, however there is no reimbursement for people who continued to pay their levies on their uninhabitable homes.

This means that while the Bakers have paid about $130,000 in strata levies since June 2019, their neighbours who didn’t will have the outstanding amounts forgiven.

“The government want people to pay off their homes, they want people to pay their levies, they want people to do all these things and then they’re punishing them for doing that,” she said.

Retirees Veronica and Clifton Baker bought their Mascot Towers home for $1.1m, they stand to only receive $400k from their investment.
Retirees Veronica and Clifton Baker bought their Mascot Towers home for $1.1m, they stand to only receive $400k under a new deal to rescue owners.

For Rachel Williams, her husband Derek’s unit was valued at $1.2m in 2019 before the evacuation. As it stands, they have about $800,000 equity in the home, with an outstanding mortgage of about $180,000.

This week, Ms Williams shared a joint statement from Mascot Towers owners calling on the government to revise their “lifeline” to residents, calling the government to grant them more time and more financial assistance than what’s currently on offer.

Under the proposed deal, while their mortgage will be cleared, they stand to lose a significant portion of their equity.

The financial uncertainty is compounded by the emotional drain and frustration. Mr Williams is also currently battling blood cancer, which his wife believes was exacerbated by the stress of the past four years.

“People’s lives have been destroyed. Their health has been destroyed,” she said.

“He’s turning 62 next month. How and why should a 62-year-old need to rebuild their life financially when they’ve actually worked hard all their life and put money into a property. This was going to be where we lived in our retirement.”

Owner Derek Williams, and his wife Rachel Williams said the offer has been a ‘kick in the face’. Picture: NCA Newswire Gaye Gerard

Adding to their exasperation is the timeline of the deal.

Owners have yet to receive figures on their sale prices and will have to wait until late February to receive their formal contracts, with a deadline set for February 19, 2024. From then, they will have until March 1 to make a decision, however in order for the deal to go through, 75 per cent of owners need to agree to the sale.

While it’s understood there will be additional financial support based on means-testing, the exact details are also yet to be disclosed.

Ms Williams said the process has been a “kick in the face”.

“Why after almost five years, is there an urgency to make a decision in two weeks. We’ve got so many questions and we’re still waiting responses,” she said.

A spokesperson for the Building Commission NSW said the agency will continue to work on what additional support can be given to owners, however this is subject to government decisions. They said details will be given to owners in late February so they can make an informed decision.

“Since being tasked with the job in March last year, the Building Commissioner has been working tirelessly to find a resolution that lets owners move on with their lives,” they said.

“The sale of lots proposal and debt mitigation strategy is consistent with the sale of building strategy and timeline endorsed by Mascot Towers Owners Corporation when they voted in favour of a Deed Poll with the Building Commissioner in July 2023.

“Under the proposed sale of lots strategy, all people who choose to leave will be relieved of their obligations to the Mascot Towers strata scheme. This includes the repayment of the $15m Lannock strata loan currently owed.”

Owners of Mascot Towers have been offered a deal. Picture: NCA NewsWire/ Gaye Gerard

However, Ms Williams is calling on NSW Premier Chris Minns and Fair Trading Minister Anoulack Chanthivong to meet with owners in hopes they can broker a better deal which remunerates owners for an amount closer to the original costs of their homes.

“Come up with a more viable solution because we’re not going away. If we have to rally outside of Parliament House, we will,” she said.

While the office of Mr Minns and Mr Chanthivong did not respond to questions over a potential meeting, a NSW government spokesperson said they remained “absolutely committed to working with Mascot Towers owners to find a solution”.

“At the direction of the government, the Building Commissioner has been working with lenders and owners to deliver relief,” they said.

“Each individual lot owner is now being asked to consider this deal because it finally offers them a chance to move on.”