Media release: South Yarra residents facing financial ruin after decades-old building defects

Residents of South Yarra Square at 100 Commercial Road are facing financial ruin and potential homelessness after being forced to fix decades-old construction defects that independent engineers have deemed "never fit for purpose."

The 46 apartment owners are now staring down a $25 million repair bill - equal to around 65% of each property's value - after forensic investigations revealed widespread and dangerous building faults.

South Yarra Square has four above ground levels and four below ground in the form of basement car parking. Among the dozens of defects identified are:

• Load-bearing columns without proper footings (think Surfside condominium collapse in Miami)
• A car park entrance ramp missing structural steel
• A roof that is not attached to the building 
• Basement drainage failures (80% defective)
• Faulty fire systems and stormwater drainage
• Combustible polystyrene panels used in balconies and soffits, and as formwork. Polystyrene makes up approximately 25% of total aboveground construction.
• Defective retrofit of derelict 3-storey foundations to 4-storey foundations - using polystyrene to fill the gaps in the basement retaining walls

Independent engineers have ordered urgent make-safe works and structural propping to prevent collapse. Residents have already spent $2 million on emergency repairs and taken out a $1.5 million strata loan at interest rates exceeding 10%.

Regulatory and Political Failures

The defects trace back to the original construction period (1989-1995). During this time there was huge political rhetoric around pro-developer less red tape building law reform - not dissimilar to today.

South Yarra Square is a direct result of this political climate and pressure placed on Councils by the then Planning Minister - who had an open disdain for the South Yarra Square - as did the Kennett Government at the time, naming SYS the "Ugliest Building in Melbourne".

Melbourne City Council were the Relevant Building Surveyors and Municipal Building Survayors. Direct quote from Melbourne City Council Relevant Building Surveyor's "Good Luck & Suffer" re the construction of South Yarra Square. 

The Planning Minister was the Responsibly Authority for SYS - coincidently he also read into law (second reading of Building Bill 1993) the 10 Statute of Limitation which the Allen government and Melbourne City Council are relying on to deny liability for their actions. Not conflict there..

• Political interference - The then-Planning Minister intervened to override height restrictions on the development, making himself the Responsible Authority for this and two neighbouring projects. 
• Improper certification - Occupancy permits were signed by a Municipal Building Surveyor  (not the Relevant Building Surveyor as legally required) later found negligent on five other projects, despite council inspection reports flagging over 90% of the same issues residents now face.
• Dangerous materials - The building contains large quantities of a prototype combustible polystyrene product ("Thermastructure Panels"), similar in risk to those used in London's Grenfell Tower. The product was not approved in Australia at the time.

Despite the clear paper trail of political and regulatory failures, Melbourne City Council and the Victorian Government have refused to accept liability or offer financial assistance. Multiple requests from residents for site visits or meetings have been ignored by the Lord Mayor and the Allan Government.

Human Impact

"This isn't just about bricks and mortar - it's about people's lives," said Owners Corporation Chair, Samantha Scherma.
"Many of our residents are on the brink of losing their homes. We're a tight-knit community and the immeasurable stress of financial ruin and likelihood of homelessness is taking its toll on owners physical and mental health"

Residents describe the situation as Melbourne's "next Opal or Mascot Towers" - a systemic regulatory failure that poses serious safety risks and leaves ordinary homeowners carrying the cost.

Local MP Rachel Westaway (Prahran) has been the only elected representative to actively support residents, raising the matter in Parliament recently and sharing footage from her site visits.

Call for Accountability

"This is not an isolated consumer dispute," Mrs Scherma said.
"It's a case study in how political favouritism, regulatory negligence and unsafe building practices have left everyday people carrying impossible financial and emotional burdens. We need urgent government intervention before people lose everything.

"The laws around the issuing of the Occupancy Permit need to change. Everyday people, should quite rightly, be able to assume that an Occupancy Permit means their building is Built to Plan and complies with the Building Act and Regulations. Neither is true. It merely needs to be 'suitable for occupation' - a very low threshold considering all your consumer rights are attached to the date of issue of the Occupancy Permit. More alarming is that if, in the very rare circumstance, the Occupancy Permit is varied or even cancelled the clock still starts ticking from the time of the original issuing of the flawed Occupancy Permit. 
"But wait, there's more … the Building Surveyor can keep at arms length from the project and have plausible deniability of defects as the Building Act 1993 gives them immunity. The current laws are a disincentive for developers and surveyors to do the right thing. The laws favour the developers and the dodgy. Where are the rights and protections for owners?

"The Federal Minister for Housing and Homelessness should not be worried about "Freezing the Code". For a building to be signed off in Victoria it does not need to meet the requirements of the Building Code or the Building Act for that matter. Perhaps the Minister should focus on compliance with the Code first instead of "freezing" it.  And widen her scope of consultation to owners - not merely developers and investors."

"The Lord Mayor and the Allen Government's silence is deafening". 
 

Media Access

• Photos of the building with resident placards are available.
• Interviews with Owners Corporation Chair Samantha Scherma and affected residents can be arranged.
• Independent engineering reports, original council inspection notes, and correspondence between council officers, the Minister and the developer are available on request.

Media enquiries & interviews:

Erin Jameson | erin(at)jamesonandco(dot)com | 0419 323 663