No relief for aggrieved owners of defective Victopia apartments

There is no relief in sight for a group of angry apartment owners in a notorious leaking apartment building, with a deferred payment plan rejected and a critical meeting postponed indefinitely.

These developments come despite a recent Tenancy Tribunal ruling on debt levies that was in favor of the group but was appealed by the building’s legal person committee.

The Victopia apartment tower has been plagued by leaky siding and construction issues for many years, and in 2016 its unit holders won a $ 30 million legal victory over them.

While the funds were intended to repair the building, the restoration was far from complete and it recently emerged that restoration costs had reached $ 54.9 million, up from an initial estimate of $ 35.2 million.

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Escalating costs meant owners owed between $ 100,000 and $ 150,000 each – and the corporation’s committee expected prompt payment.

But 56 of the 203 owners on the block objected, alleging they were overcharged and the repayment schedule dates were unreasonable.


The leaky and rotting house nightmare first emerged in the 1990s. It costs homeowners billions of dollars.

This led to protests, an emotional reunion with demands for arbitration and a special general meeting, and the involvement of Auckland Central MP Chloe Swarbrick.

The dissenting owners want to do away with the corporate committee and stop what they believe is unnecessary additional work being done on the building, which is leading some owners to bankruptcy.

A number of homeowners also want a deferred payment plan for shortfall deductions.

An extraordinary general meeting was scheduled for August 17, but the country’s return to level 4 lockdown resulted in its postponement.

Shortly thereafter, the Tenancy Tribunal issued its ruling on the debt levies.

He found that because the proper process was not followed, the owners were not required to pay the levies resulting from a committee meeting in June last year that were claimed by the corporation.

He also found that alongside the main claim for unpaid direct debits, the legal person’s interest and fee claim failed.

But Paula Beaton, spokesperson for the Body Corporate Administration that administers the committee, said she believed the court ruling was incorrect and was under appeal.

Grieved Victopia apartment owners approached Auckland Central MP Chloe Swarbrick for help earlier this year.

Ricky Wilson / Stuff

Grieved Victopia apartment owners approached Auckland Central MP Chloe Swarbrick for help earlier this year.

“In the meantime, the legal person has resolved the levy and the due date again, so there is no argument as to the validity of this historic levy. This has no impact on the reimbursement of direct debits.

Once the meeting was postponed and the court decision rendered, the committee informed the owners that there would be no deferred payment plan.

In a letter seen by Thing, the committee said: “We have looked at all the options, but the corporation is unable to fund owners because there are no funds available that do not belong to all of the other owners.”

Beaton said that because each homeowner only paid their properly allocated tax, there was no excess funds the corporation held for all of the other homeowners who failed to pay on time.

The owner of the Victopia apartment, Ikeda Kas, alleges the owners were overcharged for the repairs and says the current corporation's committee should leave.


The owner of the Victopia apartment, Ikeda Kas, alleges the owners were overcharged for the repairs and says the current corporation’s committee should leave.

“If a payment arrangement is made to favor one or more owners, owners who paid on time would be at a disadvantage.

“So while some homeowners are offered deferred payment terms, other homeowners who have made huge sacrifices to pay their royalties on time are at a disadvantage.”

All of the owners wanted the building remediation to be completed as soon as possible to get a building code compliance certificate, she said.

“The costs of remediation cannot be deferred. The requirement to pay the levies must coincide with the expenses necessary to ensure compliance with the code.

To help homeowners obtain financing, assistance was provided to homeowners and the legal person facilitated an escrow system for those whose banks required it, she said.

Kas Ikeda, who is the spokesperson for the dissenting owners, said an escrow account was not an acceptable option because it would make all the owners liable for huge loans and interest payments.

He had hired measurement firm Construction Cost Consultants to examine the costs of work done on balcony repairs last year and claimed to have discovered overspending of more than $ 1 million.

“The committee says we have a shortfall of $ 20 million to pay, and therefore you have to pay it,” he said.

“But it’s not a shortfall, it’s an overrun, and if they borrow the money and pay it to the contractor, that means the owners can become responsible for it.”

Remediation work to repair the leaking Victopia building has been underway since early 2019.


Remediation work to repair the leaking Victopia building has been underway since early 2019.

Some owners didn’t have the money, which was a problem, he said. “In the worst case scenario, they could go bankrupt and their units would have to be sold. “

Dissenting owners want an extraordinary general meeting in which all owners participate as quickly as possible, Ikeda said. They also want to see full financial information regarding costs and levies.

Beaton said a new date for a meeting could not be set at this point due to Covid restrictions, but the intention was to have one as soon as the level would allow.

In response to a request from a minority of homeowners who opposed the recent levies, the bar had appointed an arbitrator, she said.

“The parties are waiting to hear the arbitrator. This has no impact on the payment of direct debits.

Ikeda said the dissenting owners were hiring a lawyer to represent them and considering the various legal options available to them.

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