Developer Australia YMCI is counting on a vote by owners of defective apartments it has rectified in western Sydney to draw a line under legal action and allow it to get on with marketing the next stage of its $5 billion Ovation Quarter development.
AYMCI, a subsidiary of Chinese state-owned enterprise Yunnan Health & Cultural Tourism Holding Group, said it had spent more than $500,000 to fix defects, including faulty waterproofing membranes and insufficient fire protection in the Ruby and Emerald buildings of its western Sydney development.
The first stage of AYMCI’s Ovation Quarter development at Sydney Olympic Park. 
Legislation passed under NSW Building Commissioner David Chandler has created incentives for developers and builders to work with residents and for their track record to be rated, as a way to improve building standards and consumer protections over apartment purchases.
The owners’ corporation vote, due to take place on Wednesday evening, is to accept or reject a so-called enforceable undertaking, a pledge to fix serious defects by AYMCI that supersedes a remediation order slapped on it last year to fix the buildings at 1 and 2 Kingfisher Street in Lidcombe.
The enforceable undertaking regime created by the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 is still new.
The public register of undertakings only shows one to date – that made by builder 51 OCHR Pty Ltd and developer Toplace in July last year over the five-tower Skyview development at 51-55 Old Castle Hill Road in northern Sydney’s Castle Hill.
A positive vote by the Ovation Quarter owners would bring an end to legal action between the two parties, but requires a level of trust, as the full scope of the work to be done is not yet known.
We want to do the right thing so people can talk about us in a positive light, as we have future developments under way.
AYMCI director Jason Tan
AYMCI said it was not known how many apartments needed rectifying – as that would only be known as the developer’s new building team discovered defects – but said the remaining work would be completed by Christmas.
The owners’ corporation declined to comment.
But the regime creates an incentive for both sides to work together. The government will hold a security supplied by the developer for the warranty period of six years.
“The developer has offered an enforceable Developer Undertaking to the Department of Customer Service Secretary in relation to the buildings, which includes the owners accepting the undertaking will be the mechanism by which the building will have its defects remediated, and by which warranties will be covered,” a spokesman for NSW Fair Trading said.
Strata owners advocacy group Owners Corporation Network said the streamlining of rectification processes would remove a lot stress.
“Enforceable undertakings by the developer would save owners years of financial and emotional pain involved in the current landscape of drawn-out litigation, which often ends badly for them,” OCN executive director Karen Stiles said.
The developer, which does not have an iCIRT rating under the new NSW rating system designed for builders and developers, said it was keen for the vote to pass so it could continue to sell and develop apartments without the defects cloud hanging over it.
“A positive vote will make it easier to market further stages in this development,” AYMCI director Jason Tan said.
“We want to do the right thing so people can talk about us in a positive light, as we have future developments under way.”
AYMCI wants to start marketing the next apartments in its 95-unit Sapphire stage of the development before Christmas, and has appointed Colliers to manage the sales.
“In our first stage of apartments built it was our understanding that we had appointed a team to deliver a high-quality development with a retail mix that Kann Finch architects had designed,” Mr Tan said.
“We did not envisage the defects discovered in a few apartments would draw some attention and cause controversy.”
The original builder was Zone 3 Homebush Pty Ltd, a company founded in 2017 by former Coronation Property Group secretary Andy Nahas and now headed by his brother, Coronation managing director Joseph Nahas.
Building Commissioner David Chandler’s resignation in August – since reversed – was, in part, triggered by concerns he had about the relationship between Coronation, which had hired former NSW deputy premier John Barilaro, and then-Fair Trading minister Eleni Petinos.
AYMCI said it had appointed some specialist trades directly to do some of the work, and it would tender for a new builder for the remaining rectification.
“We believe this new regulatory regime implemented by the NSW Building Commissioner is positive for the development industry because it allows developers to appoint a new team that need to adhere to strong compliance and enforcement powers,” Mr Tan said.
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