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Hold-outs' time may be up with new rules
The 72-year-old lawyer is likely to be kicked out of his Bondi home overlooking the beach. Six of the eight apartments in the 1920s Notts Avenue block are owned by the developer Vaughan Blank.
Under the present laws, 100 per cent of owners must agree before a block can be redeveloped, but a government discussion paper suggests this could be reduced to 75 per cent.
''As I understand the proposal, I would not be able to keep my place even if I went to court,'' Mr Davenport said. ''It would only be an argument over the price.''
AdvertisementHe said he simply doesn't want to move from the third-floor apartment, which looks much the same as it did when he inherited it from his mother in 1995. She'd paid $33,000 in 1975.
''I surf nearly every day. I've got the bus at the doorstep.''
However, everyone has their price, and Mr Davenport says his is double-digit millions.
''If I had to move, well, maybe $10 million might get me something equivalent. But there really is nothing equivalent.
''Nothing else will give me the same view, the same sunshine, the same high ceiling, the same convenience to everything.''
Gary Baker, the financially troubled developer husband of style queen Karin Upton Baker, sent documents to the Herald this week that showed $10 million was Mr Davenport's asking price in September 2007, when Mr Baker had owned the six apartments. Mr Blank bought them in 2010 from receivers.
Mr Baker said ''it would have been very helpful'' if the 75 per cent rule had applied when he was trying to buy Mr Davenport's apartment and that of the other ''hold-out'', Roseanne Hughes, on the floor above.
''It's just ridiculous,'' he told the Herald. ''The current law holds developers to ransom.''
In total, Mr Baker spent $11.18 million between 2002 and 2008 on the six apartments. This included $3.5 million in 2008 for a ground-floor unit that had cost just $425,000 in 2005.
He says he'd agreed to pay Ms Hughes's asking price of $5.5 million when the financier of five of the units, Challenger Managed Investments, ''hit me with a 28-day notice to repay all their debt''. Ms Hughes no doubt wishes such a sale had proceeded: the apartment went up for auction on March 31 this year with a price guide of $1.7 million, but was withdrawn at the last minute.
Mr Davenport at one stage refused an offer from Mr Baker of $5 million for his apartment. ''It was just greed,'' Mr Baker said. ''They missed their golden opportunity … then the GFC struck.''
He says he had planned to turn the eight flats into four single-floor luxury apartments, with possibly an underground car park.
''We intended to keep one of them to live in ourselves.''
Apart from the letters, Mr Baker produced engineer and quantity surveyor's reports showing the building needed $2.63 million worth of repairs.
''The front of the building is literally falling into the ocean,'' he said. ''Ageing existing property owners don't have the wherewithal to look after these old buildings.
''Developers are trying to acquire these properties because they can factor in the cost of these repairs and works.''
The South African-born Mr Blank bought all six in a deal with receivers worth $9.3 million. The unit 1 apartment that cost Mr Baker $3.5 million went to Mr Blank for $1.5 million.
Mr Davenport said Mr Blank had made him no offers. ''He's said he's not in a hurry to redevelop the building, but he ultimately plans to … or to knock it down and build something else.''
He worries that if the proposed changes proceed, he'll be in a poor negotiating position about the price. ''Obviously someone wanting to buy a unit will get a valuation - a low valuation - and argue that's the value.
''If I don't like it, I've presumably got to go to court, get my own valuer, run the risk of a legal costs and a lengthy fight. It's a most unattractive proposition.''
Submissions for the discussion paper at fairtrading.nsw.gov.au close on November 15.