Shocked regulators can’t help as homeowners saddled with serious defects seek reform of Northern Territory building regulations

Jonathan Egudo has been trying for 10 years to get the Tomazos Group, which built the seven-storey Kube building in Darwin’s CBD in 2014, to fix a leak in the roof that floods his top-floor apartment during the rainy season.

“They went up on the roof four times in four years and said they had fixed the problem, but they didn’t, and then every time the water flooded again,” he said.

Mr. Egudo pays rent on another property where he lives, plus a $700,000 mortgage on a condo in Kube that he bought under a zoning plan and which he can now neither sell nor rent out.

He hired a consulting engineer and mold experts to investigate in 2018 and 2019.

The engineer discovered that every year water leaks through the roof, destroying the hallway, kitchen, two bedrooms and the bathroom in the apartment.

The ceiling in the apartment’s bedroom partially collapsed, the cabinets and floors suffered water damage, and the ceilings were covered in black mold.

“They basically said the air quality there was so bad it was uninhabitable,” Mr Egudo said.

He was shocked that the Northern Territory Government’s Building Advisory Service could not force the developer to fix the defects.

In a letter sent last year, he was informed that criminal proceedings could not be brought even though there was “sufficient evidence… that the contractor breached… the (Building) Act” by failing to install a leak prevention device.

The regulator said during its investigation that the two-year period within which criminal proceedings could be brought had expired and that there was a “lack of evidence” to justify taking legal action.

“It took them more than two and a half years to complete the investigation and then somehow they discovered there was really nothing they could do,” Mr Egudo said.

Mr Egudo said he was also unable to claim compensation under the Northern Territory Government’s Residential Building Insurance Scheme.

The Master Builders Fidelity Fund provides coverage exclusively to homeowners whose builder has died, disappeared or gone bankrupt.

The NT Justice Department Residential Building Cover Scheme covers property costs up to $100,000, after which owners must apply to the NT Civil and Administrative Tribunal (NTCAT) for compensation.

Mr Egudo has now launched a costly case against the builder in the High Court in an attempt to obtain compensation.

Johnston homes to be demolished

In the Palmerston suburb of Johnston, 16 homes ordered by the Northern Territory government in 2015 from the Tomazos Group for charity Venture Housing will be demolished after they began to wobble and crack four years later.

“It was around 2020 that we kicked out all the tenants because we felt they were no longer safe,” said Allan McGill, president of Venture Housing.

This year, the regulator decided it could not prosecute the Tomazos Group because it had been investigating allegations of defects for more than four years.

“It is frustrating that it has taken them so long to make final decisions and the end result is that the time to take action against the builder has expired,” Mr McGill said.

The charity Venture Housing said it was unable to claim compensation through the Northern Territory Government’s insurance program, so is negotiating with the government for direct compensation.

The Tomazos group declined to be interviewed.

Bellamack homeowners face costly lawsuit

In another Palmerston suburb, Bellamack, residents of five dilapidated houses have been unable to contact the building control authority for help with repairs or compensation for the past 10 years.

The regulator found the Northern Territory government-backed development would not survive the cyclone.

Most of the hosts were unable to speak publicly because they work for government agencies.

Independent MP Mark Turner, whose constituency includes Bellamack, said the regulator should have “done something” as soon as it became aware of the problem.

“The legislation places positive obligations on them that they should have taken action and they failed to do so,” he said.

The owners were forced to report to NTCAT in person.

The tribunal ordered builder George Milatos to pay compensation, but Mr Milatos appealed the decision to the Supreme Court.

Developer accuses regulator of lack of experience

Mr Milatos denied that his work was defective.

“There is no doubt that I am at fault here,” he said.

“You can only judge a builder if he has constructed the building in accordance with the approved drawings.

“For example, I cannot be judged on what it might seem like, that I could have used thicker columns instead of thinner ones, because if the drawings tell me to use this size, I have to use that size.”

He believes the regulator has failed to hold developer Bellamack Pty Ltd, which selected the housing estate design, to account.