‘An additional mortgage': Sinking Melbourne apartment complex could see Sue and her husband pay $374,000 special levy

shares Share article Nine.com.au's series aims to raise awareness over apartment owner rights. Nine Exclusive: A sinking Melbourne apartment complex could force owners to pay up to $374,000 in special levies each to fix severe foundational issues, nearly doubling the purchase price for some residents. Sue McLean and her husband bought a two-bedroom unit on Eucalyptus Drive in Maidstone, located about eight kilometres west of the Melbourne CBD, for their son to live in six years ago. Advertisement The apartment complex in Maidstone is one of multiple buildings that have severe foundational issues which require urgent remediation. Nine.com.au Are you dealing with a strata problem? Contact chief reporter April Glover at april.glover@nine.com.au. The complex, built in 2011, was found to have a 'serious and longstanding movement problem' in 2022, meaning the building is slowly sinking. The total cost of remediation could be between $17 million and $20 million, and could 'possibly be higher', according to a quote sourced by the owners' corporation. McLean, who lives in Goulburn, NSW, told nine.com.au the issue was discovered two years after they signed the contract of sale. Two other buildings on the same street were found to have significant 'footing subsidence'. A July inspection found the complex McLean owns had 'greater than anticipated' degradation, meaning the quoted cost of remediation doubled from $10 million to up to $20 million. Advertisement 'The longer it gets delayed, the further they're saying that it's deteriorating,' McLean said. 'All up there are 248 units altogether out of the whole complex. 'We have been dealing with a lot of stress.' Sue McLean (pictured) said the special levy would be like an 'additional mortgage'. Nine.com.au The McLeans are among the countless Australians facing sky-high strata fees and special levies, which is part of nine.com.au's series to raise awareness over apartment owner rights and what you need to know before buying a unit. The quote for the McLeans' building would require the 60 owners to share loan repayments over a ten-year period, equating to a range of $2,300 –$3,500 per month per unit on top of ordinary strata fees. 'Our contribution would be $374,000,' McLean added. 'When I did my calculations, for us it's going to be $3,333 at least each month. Advertisement 'For 10 years, that's $40,000 a year, on top of a mortgage that is at least $24,000 a year. 'We're retirees, we bought this unit for our son.' The committee is exploring a potential strata loan. Interest rates on these loans can range between nine and 11 per cent per annum. The remediation cost has been quoted at up to $20 million for just one of the complexes. Nine.com.au Documents seen by nine.com.au reveal that nine out of 10 residents say they are unable to afford the estimated payments. The McLeans bought their unit for $415,000. This nightmare could see their principal almost double. Advertisement 'There's people in [the apartment] that are pensioners,' McLean said. 'I know they've got no other option but to do something. But then you know, particularly for a pensioner, they haven't got the ability to pay that sort of money. 'And they end up losing their home.' 'It is effectively a second mortgage' Strata Owners Alliance (SOA) co-founder Adam Promnitz said Australian apartment owners pay some of the highest costs in the world for buildings which 'do not stand the test of time'. '$330,000 isn't just a levy, it is effectively a second mortgage on the property which no one else will want to touch,' Promnitz said. 'A reasonable person would expect a building structure to last well beyond 50 years and these owners are hit with these life shattering bills after just 15 years.' Promnitz said unit owners should not be liable to foot the bill in these instances. Advertisement 'Our tax system depreciates building costs over 40 years yet we have $20 million of works for a building just 15 years young. It doesn't add up.' 'This has devastating life changing financial consequences for the owners.' Multiple units across the four building on the same street are now up for sale. The quiet street in Maidstone is home to three apartment complexes that are sinking. Nine.com.au McLean said they would be selling as a 'huge loss' if they decided to put their property on the market. 'I know one person actually purchased, and she had no idea,' Mclean added. 'You've got to have a good solicitor to find out what's going on. 'And you would think that the people that are selling the apartment would be open and upfront with the real estate.' Advertisement Nine.com.au understands one local broker has warned multiple clients against buying in these complexes. Fears of mass evacuation if problem deteriorates The same issue has impacted multiple complexes on the same street. Next door, sudden movement in the building resulted in a mass evacuation order for residents in January 205. Residents of all the units were told to move immediately. There are fears the same order may be given for the other buildings. 'I know there are some people still in there because they've got a mortgage,' McLean explained. Advertisement 'They can't afford to go and get something else, pay that, pay the mortgage, and then pay the levies.' An August town hall meeting for McLean's building mentioned that original owners have been asked to provide contracts of sale and engineering reports, so current residents can explore potential legal action. This problem will soon enter its fifth year with no solution. All McLean and fellow residents can do is wait and hope for a better outcome. To approve the final strata loan, owners must vote on a special resolution. Only 75 per cent of owners need to vote in favour for it to pass. 'They're going back to have a look to see if there's another alternative,' McLean said. 'It's a little bit like it's an additional mortgage.'