Residents in a new, government-owned affordable housing block in Melbourne's south-east say they were dismayed to encounter problems in the building within weeks of moving in. Questions are being raised about the government's due diligence checks on the project after an ABC investigation uncovered ties to a company that liquidated amid several lawsuits last year.
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00:00In the grip of a housing crisis, the Cheltenham building was one solution.
00:06Bought off the plan for $20 million by Homes Victoria, it's 39 new and high quality units
00:12later promoted by the Housing Minister.
00:15But tenants, lured by long leases and below market rents, now fear it was too good to
00:20be true.
00:21So not long after we moved in did we discover that when the shower was used it floods our
00:26downstairs neighbour.
00:27Weeks after Geoffrey Stewart and Jay Bekelec moved in last December, they discovered a
00:32leak in their bedroom.
00:33But if you've got a downpour of rain, this has tripled.
00:38Some residents discovered other issues, like once-off flooding in the car park, more leaks.
00:43It began to worsen and eventually came through our range hood.
00:46And what appeared to be cigarette butts set into a concrete slab.
00:50It looks like rubbish has just been thrown in.
00:52Builder SLC Bayside said a small number of minor defects reported in the building had
00:57been rectified.
00:59The ABC can reveal SLC Bayside has several links to Shangri-La Construction, a company
01:04that was liquidated amid several defects lawsuits last year.
01:09The company's directors are brothers Sid and Obeid Nakabula.
01:13The companies were registered at the same South Melbourne address.
01:17And SLC Bayside's website once described the company as being led by the brothers.
01:22Shangri-La Construction sold about $150,000 in assets to SLC Bayside before it folded
01:28in what liquidators deemed a legitimate sale.
01:31Its collapse left some creditors, like those in this Caulfield apartment block, which required
01:35extensive repairs with a government insurance payout, unsure if they'll recover some out-of-pocket
01:40costs.
01:41Tenants in the Cheltenham block have questioned whether the government uncovered these links
01:45before its purchase of the $20 million block settled last September.
01:50This is something that is not hard to find.
01:53It just shows how little they care about the people that are living in these spaces.
01:59Holmes Victoria says due diligence checks were carried out before the sales contract
02:04was signed in 2021.