REAL ESTATE
The ‘basket-case’ apartment building wracked with legal threats
Feb 22, 4:15 PM
Sue WilliamsDomain Reporter
It’s one of Sydney’s best known apartment buildings, but behind the scenes Gazebo, the former 1960s hotel in Elizabeth Bay, has become wracked with arguments, accusations and legal threats.

The round tower block regularly used as a setting for film and TV productions and converted into apartments in 2005, is in uproar after the failure of a bid to cancel a $5 million special levy to start work on fixing fire defects that could run to $7.4 million.

In the latest slew of legal actions, the NSW Civil and Administrative Tribunal (NCAT) awarded costs against a rebel band of owners who had sought to have the special levy suspended and remove the compulsory managing agent appointed by NCAT just last year.

NCAT principal Kim Rosser said in the decision that, “I have concluded that the applicants did not act reasonably in commencing proceedings”.

But shortly after that issue was settled, another long-term resident, TV commercial producer Paul Meredith, on Saturday wrote to other owners saying he’s personally putting $100,000 towards fresh legal action. In addition, he says in his note that he is happy to discuss giving out interest-free loans to any owners who have outstanding strata levies – which mean they’re not entitled to vote in future meetings – in exchange for them giving their proxy to vote to ‘a mutually agreed owner’.

When contacted by Domain, he declined to comment, saying: “I’m not interested as I do not believe it will benefit the Gazebo Owners Corporation.”

One owner, however, who spoke under the condition of anonymity, said the building had “become a basket-case. We’re sick and tired of all the legal actions, but it seems they’re never going to stop. And now it’s incredible to think an interest-free loan is being offered to buy votes!”

The trouble-torn building, once an icon of Sydney’s skyline, has rarely been without the dark cloud of legal action since its 89 apartments in the tower, and 60-plus units in the adjacent court building, were first occupied in late 2005.

Originally, much of the anger and many of the court battles were directed at colourful developer, businessman and decorated sailor Syd Fischer, whose development company 2EBR was fighting actions over claims for about $4.5 million in alleged defects, including fire problems, leaking windows and balconies, in the building.

Another issue was the private use, by the penthouses built on the tower’s roof space, of a third lift – which everyone else was paying for. In 2014 the Supreme Court overturned the penthouse residents’ right to use that lift exclusively. The same year 2EBR sold the main penthouse it retained ownership of, at the top of the 18-storey tower, for $8 million.

Finally, after a lengthy series of hearings, the Supreme and Appeal Courts ordered 2EBR to pay owners $135,000 in legal costs but in June 2015 it went into liquidation, so the bill was never paid, and the defects action was effectively cancelled.

Six months later came more agony when the City of Sydney Council issued a fire safety order against the building, requiring it to carry out extensive works. A special levy of $1.1 million was struck in August 2016 to fund stage one of the program.

After a number of rows among owners, a compulsory strata manager was appointed to run the building. Some appealed against the decision to appoint the firm Strata Choice, but their action was later withdrawn. The compulsory management order runs out on midnight this Friday, and an Extraordinary General Meeting has been set for Monday, at which all owners who are not in arrears with their levies will be entitled to vote.

Strata manager Daniel Cockerell, when contacted by Domain, declined to make any statement. “Because we are in compulsory management, we are not at liberty to comment,” he said.

It seems only one thing is certain at the Gazebo: even with the end of compulsory management, and owners taking their affairs back into their own hands, the arguments, and legal actions, are unlikely to stop any time soon.

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