What To Do If Your Dream Apartment Turns Into A Nightmare

It's the biggest purchase most of us will ever make -- but what if it goes bad?

As more questions pop up over the cracks and subsequent evacuation of residents from the Opal Tower development at Sydney's Olympic Park, attention has turned to a wider query.

What can you do if your dream property purchase ends up being flawed?

City-dwellers are becoming more obsessed with unit living, and buying 'off the plan' -- or purchasing an apartment in a to-be-built complex before it even exists -- is an option favoured by many looking to get a foothold in the property market.

READ MORE: Opal Tower: 51 Units Declared Unsafe After Hundreds Evacuated

A resident (left) asks questions of Icon Managing Director Julian Doyle at a press conference outside the Opal Tower on Wednesday (AAP Image/Mick Tsikas)

While situations such as the Opal Tower are rare it pays to know your legal rights as a buyer.

"I would think someone would be liable for a lot, but it comes down to who and how much," barrister Geoffrey Moore told 10 daily.

Residents of the Opal Tower have been asked to leave as engineers carry out more safety checks (AAP)

Moore, a former lecturer in property law at the University of Technology Sydney, said it was very difficult to simply obtain a refund if a property turns out to have flaws, and most instances would require formal legal action in court.

"Other than through good will, there's not much way to get a refund. In the shops, there's goodwill or sometimes law that lets you return a purchase, but there's a lot of difference in refunding $100 and refunding $1 million," he said.

"The starting point would be to sue the builder. You may have some claim against the vendor or a developer, but they get a building company to do the work."

"I’m sure everyone will point the finger at the builder, but all this takes time, and there could be huge court cases."

What can you do if you buy off the plan? (Ian Waldie/Bloomberg via Getty Images)

Moore pointed to home warranty insurance, which purchasers can obtain to insure against incomplete or defective construction work, or if their builder goes into liquidation or bankruptcy.

"There should be an ability to claim against the builder or, if they're insolvent, against this type of fund which is set up for this kind of situation," he said.

READ MORE: Opal Tower: Residents Relocated Indefinitely After Wall Collapse

Michael Weir, a professor in property law at Bond University in Queensland, also said the first port of call should be investigating legal action against a builder.

"The primary one would be the builder, for building something that is negligently built," he told 10 daily.

"Depending on the state, as part of the insurance process, there’s often a contractual defects arrangement, which means if there's a defect within a certain number of years, the builder would be obliged to make good."


Weir said potential damages for a purchaser against a builder "could be very substantial". But he said property owners could also potentially simply ask for a refund of the price they had paid.

"If the vendor knew about the problems, there’s the possibility of termination and getting your money back," he said.

"But primarily you’d be looking at the builder, and potentially suing the vendor."

Moore added that if an entire building complex was potentially in doubt, that residents or owners could look at a class action lawsuit.

He also advised that even when buying units off the plan, purchasers may have a chance to do some inspections and checks before parting with the full amount.

"You might have a window of opportunity. They can't make you pay the balance of money until council signs off and says the property is in good order," he said.

"Let's assume council signs off. You might be able to get separate checks before you pay the balance."