The real estate regulatory void that’s left a 78-year-old homeless

A burst pipe that swept worms, grey water and dirt into Sandra Love’s Potts Point apartment has left the 78-year-old homeless amid a nearly four-year battle for repairs.

Love owns an apartment in the basement of the historic Carisbrooke building. With a rooftop view of the Opera House and Harbour Bridge, a two-bedroom apartment sells for over $1.2 million.

Sandra Love is fighting her company title board for compensation for the years her apartment was uninhabitable.CREDIT: LOUISE KENNERLEY

But her apartment is covered in mould. Photos show there are holes in the walls, roof and floors from plumbers’ drilling and bare concrete exposed by ripped-up carpet.

Carisbrooke operates under a company title, an old form of building management replaced by strata titles in the 1960s.

Under company title, owners have shares in a company instead of real estate titles. The buildings operate under their own rules, are managed by a board of directors elected by shareholders, and are regulated by the Australian Security and Investments Commission (ASIC) rather than state and territory Fair Trading departments.

Disputes cannot be resolved in tribunals; they must instead be taken to the local court or, for larger ones like Love’s, the Supreme Court.

Love’s issues arose in December 2020 when water leaks appeared in the front bedroom. Plumbers replaced the leaking pipe in January 2021, according to a building engineers’ report, but Love said a camera wasn’t used to check the remaining pipes for suspected blockages.

The report found that damp patches continued to appear. Almost a year later, builders applied a liquid waterproof membrane to exterior bricks; however, rain washed it away.

Love said membrane was also applied in the bedroom, contravening national building codes, and never dried due to humidity.

Worms, bugs and dirt washed up onto the exposed slab in the apartment’s front bedroom. 

She said the apartment smelled pungent, and mould engulfed her couch, lamps, bed, and clothes. She commissioned a mycological inspection report with environmental consultants, which found an “extreme contamination” of mould and spores.

In April 2022, 16 months after the leaks first appeared, Love moved out due to health concerns and has been staying with friends and family.

In October 2022, the pipe was eventually dug up, revealing major blockages, and replaced, the building engineer report found, and the leaks stopped.

Only as of last week did work commence to repair her apartment.

Love has continued to pay several thousand dollars in levies a year, which increased by 20 per cent in July according to a letter sent to shareholders. The board also introduced a special levy to raise $330,000 for the capital works fund, which strata minutes show previously wasn’t in place, to budget for deterioration and repairs.

ASIC does not have data on the number of company title properties in Australia. However, strata advocate Stephen Goddard said the number of company titles was “ever-shrinking” as residents converted their buildings from company to strata titles.

“People have lost confidence in the boards, the directors and their decisions, and they’d prefer to be in a building which gives them access to the tribunal to resolve disputes,” he said.

Sydney University property law expert Patricia Lane said the strata title system and its legislated remedies were efficient and tailored to collective living.

“The remedies you get in the Supreme Court aren’t flexible to deal with the kinds of problems that arise in residential living situations,” she said.

Types of residential property titles

• Torrens title: Used for freestanding properties, title holders own everything on a parcel of land.
• Strata title: Developed in NSW and exported globally, strata title holders own the inside of their apartment and share an interest in common areas like lifts, hallways and gardens. 
• Community titles: Used in gated communities, community titles are similar to strata schemes, however the title holder owns the boundary of a building, with land held in common. 
• Company titles: Owners buy shares into a company, giving them rights to reside on a property.

Love is seeking $286,000 compensation for her destroyed items, including two pieces of valuable artwork currently with restoration specialists, the nearly four years the room with the broken pipe was unusable, and the 16 months her home has been uninhabitable.

Her contents insurance provider will not accept her claim for damaged items, as the plumber’s failure to fix the pipe blockage was not a “one-off issue”.

In a letter seen by this masthead, the board said it would also not accept responsibility, saying Love needed to use her home contents insurer, as the board had rectified the cause of the water leak.

The building’s property manager declined to comment as the claim is with insurers.

An ASIC spokesperson said someone who believes a company title or director was failing its duties should make a formal report of misconduct.