The developer has gone out of business, so council is getting the repair bill
A council on Sydney’s lower north shore faces a hefty repair bill after it was ordered to fix up serious defects in a residential building.
The state government last month issued a building work rectification order to Lane Cove Council after inspectors from NSW Fair Trading found multiple defects in a seven-storey building in Pottery Lane in Lane Cove.
Lane Cove Council faces a hefty bill after it was ordered to fix up serious defects in a residential building in Lane Cove.Credit: James Brickwood
The issues involved stormwater drain outlets and failure of the roof membrane, which Fair Trading said were serious because they did not comply with building standards.
The order requires the council to remedy the “potential serious defect” in the Pottery Lane building within two months.
A council spokeswoman said Lane Cove Council was the former landowner of the site “and did not have any role in the construction of the project”.
“Council is surprised that Fair Trading NSW has determined that it should bear the cost and not the developer or builder,” a council spokeswoman said. “Given the order was only received last week, council has not sought an estimate of the cost.”
The order is one of 35 issued to property developers by the NSW government to fix up building defects this year, according to Fair Trading. No other local council appears on Fair Trading’s register of building work orders, but Sydney Olympic Park Authority was issued an order to rectify defects in the Opal Tower.
The spokeswoman said the council was a strata owner and major tenant of the building, which was completed in 2016: “Like all strata owners we are keen to see the issue rectified as soon as possible to ensure the defect does not ultimately directly impact owners.”
However, she declined to say if the council would challenge Fair Trading’s order: “Council will act on this matter as soon as complete information is available.”
The council developed the Pottery Lane building with WN Developments – a company whose director Simon Napoli applied to wind up the company in August 2022 and is in the process of being registered.
A Fair Trading spokeswoman said a draft rectification order for the Pottery Lane building was issued to WN Developments but “it was determined they had commenced strike-off action with the Australian Securities and Investments Commission in August 2022 and a final order was not subsequently issued”.
She said the council fell within the definition of a developer for this project under NSW law, but an order may be appealed in the Land and Environment Court within 30 days.
The order to fix building defects is the latest controversy to engulf the council, which has faced opposition from some residents over controversial plans for a $75 million sports complex at the Lane Cove Golf Course.
Residents were also angered by the council’s decision to sell off green space for seniors housing.
Local councils are permitted to undertake some forms of property development, but an Office of Local Government spokesman said they must manage spending prudently to ensure ratepayer funds are used in the best interests of their communities.
Woollahra Council’s plan to turn a Double Bay car park into apartments with a cinema complex and shops was opposed by some councillors including Harriet Price who were worried about the council acting as a developer.
“Should councils really be wearing a developer hat given the inherent risks involved and where they will effectively be in breach of their own planning controls,” she said.
Longueville Residents Association president Ron Gedeon said residents did not have confidence in the Lane Cove Council’s ability to manage large projects “after this debacle”.
“They are very negative toward the council and many are wanting to know more about the actual defects and why council became a developer when that is not its core business,” he said.
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