The Markets Residences in Belconnen is expected to be completed in 2027. Photo: Ian Bushnell.
Buyers in a major Belconnen apartment project are up in arms about being potentially misled over the number of bedrooms in their off-the-plan purchase, which could affect their ability to secure finance and settle.
Many are seeking to rescind their contracts and a mass exodus could threaten the viability of the project.
More than 100 buyers crammed into a conference room at the Mercure Hotel in Belconnen on Thursday night (20 August) for an information session led by Sasha Trpkovski, the former sales manager for The Markets Residences project.
IP property’s 326-apartment project on the corner of Belconnen Way and Lathlain Street has faced delays but is expected to be completed in the first quarter of next year.
The affected buyers contracted to buy apartments listed as two, three or four-bedroom homes but have now discovered they now have a study or multipurpose room, some without windows – and one less bedroom.
One couple bought what they thought was a $1 million-plus four-bedroom apartment, only to learn recently it had two bedrooms and two studies.
Mr Trpkovski, who has bought three “two-bedroom” units for himself and his two daughters, said the floor plans in buyers’ contracts were not the same as those in the approved development application, which were the only ones that counted.
It appears that apartments represented/sold as three-bedroom apartments are DA-approved as two-bedroom plus study; those represented/sold as two-bedroom apartments are DA-approved as 1-bedroom plus study; and those represented/sold as four-bedroom apartments are DA-approved as two-bedroom plus two studies.
Mr Trpkovski said that marketing agents LJ Hooker last month updated the online listing downpage under the heading Apartment Features to reflect the approved DA.
There is a link to the project website, but it no longer exists.
For example, an apartment listed as having three bedrooms is now “Approved as 2 bedrooms + multi purpose room* …. *Multi purpose room comes with wardrobe and can be converted into a bedroom”.
But for all intents and purposes they remain listed as two- to four-bedroom apartments.
The approved DA shows 266 of the 326 apartments have studies.
Former sales manager Sasha Trpkovski at the sod turning event for the project in 2023. Photo: Zen Photo.
Mr Trpkovski said valuations obtained from Vanguard showed that the apartments with studies would be $100,000 to $200,000 less than the contract prices, which would leave buyers needing to secure finance with a shortfall.
Mr Trpkovski said that he had already sought to rescind his three contracts because he could not bridge a $300,000 gap.
He received legal advice that the developers may have breached Australian Consumer Law by engaging in misleading and deceptive conduct, and that a potential statutory rescission right arose from a material error in the property’s description.
Mr Trpkovski said he had collated all relevant documents and submitted a 17-page formal complaint to ACT Fair Trading, as well as contacting the ACCC and the corporate regulator ASIC. He also hopes to meet Planning Minister Chris Steel next week.
He told the meeting that buyers had three options: find the extra cash if needed, rescind the contract or do a deal with the developers.
The developers had attempted to warn off buyers from attending the meeting, saying in an email on Monday (17 August) that Mr Trpkovski had no authority and was creating unnecessary confusion.
In an explanatory email to buyers on Wednesday (19 August), Development Manager Faye Ligonis said Mr Trpkovski’s claims were incorrect and reassured them that units would be delivered as per contracts and all applicable legislation.
But buyers questioned her use of the term “habitable rooms”.
“The number of rooms in your apartment will be delivered as per the floor plan in your contract, and they will be certified accordingly under the Building Code of Australia. They will be approved as habitable rooms which can be used as bedrooms or secondary living areas,” Ms Ligonis said
Developer Peter Micolas is meeting with individual buyers. Photo: Zen Photo.
Adero Law is representing a large number of buyers who want to get out of their contracts.
Principal lawyer Andrew Chakrabarty said his clients, at best, had problematic contracts.
“What is being sold as beds may not at law classify as bedrooms, and therein lies the devil,” he said.
“Many buyers have moved on their notices of rescission, and whether that ultimately forms in damages may or may not be a matter for court later on.
“The notice of rescission is at times built on either disclosure issues in the contract and/or the number of beds in the contract.
“The potential of the number of people being impacted here, on the scale that it is, is something I have not seen previously.”
The developer has contacted those concerned about their situation to arrange individual meetings to assuage their concerns.
Mr Trpkovski believed this situation could have reverberations across the whole of Australian property law.
“Every property developer in Australia will be on notice that if you’re selling a four beddy, your DA better say ‘four beddy’,” he said
Mr Trpkovski said a “habitable room” was a room you could live in, but it could not be called a bedroom because it did not meet the requirements for a bedroom.
“Yes, you can put a couch in there, and you can sleep in there, you’ve got visitors, you can roll out of bed and sleep in there,” he said.
“But you can’t just change a room into a bedroom and sell it as a three-bedroom.
“It’s not that easy, because what you have is the DA approval. There’s all sorts of things based on bedrooms as in parking allowances, amenity, etc.”
In a statement released on 21 August, the developer reiterated that Mr Trpkovski’s claims were incorrect and that all buyers would receive their apartments in accordance with their Contracts of Sale.
It said the project was still under construction and valuations could only occur after the building was completed.
Valuations were conducted by accredited, reputable valuation firms that were on the panels of the respective banks and financiers and provided for first-mortgage purposes.
“They take into account the actual completed unit, the overall building and relevant comparable market data at that point in time,” it said.
“Valuations typically only last for three months before needing to be updated.
“As part of the valuation and settlement process, IP Property conducts regular information and briefing sessions to all relevant industry valuers. This process will occur closer to the completion of the project towards the end of 2026 / early 2027.”
IP Property said that under the Building Code of Australia habitable rooms included bedrooms and studies.
Mr Trpkovski said he was acting in his own interests as a buyer and to protect fellow buyers.
He said he had refused to sign a non-disclosure agreement when he parted ways with the developer in February, costing him hundreds of thousands in commissions.
The developer dispute this.