The decision of a flamboyant property tycoon to squeeze more money from a development by shrinking apartments serves as warning to off-plan purchasers.

Salim Mehajer, who has recently been at the centre of tabloid media attention after staging one of Australia’s most ostentatious wedding ceremonies, plans to earn a staggering $45 million in additional profits simply by manipulating the walls of an apartment complex in western Sydney.

Off-plan purchasers of units in Mehajer’s SkyPoint Towers, on John Street in Lidcombe, have been informed by letter that the walls of their apartments will be rearranged, resulting in a diminution in size of between 30 to 40 per cent.

The letters did not offer any compensation for the diminution in space, instead requesting that purchasers meet with sole agent, Dean Kang of Grace Partners Real Estate, if they wished to negotiate for continuation of the deal.

Mehajer intends to use the changes to the apartment floor plans to cram an even greater number of units onto the site, adding as many as eight more flats to each floor of the eight-storey development at 42 – 44 John Street, that was originally slated to contain just 64 apartments.

Mega Wedding Groom Squeezes $45mn More From Apartments

Under an application filed by Mehajer last September the site would be combined with the neighbouring site 36 – 40 John Street, Lidcombe, and converted into a 14-storey building comprised of 192 residential units and 16 commercial units, as well as a basement park accommodating 283 vehicles.

If his plan proves successful Mehajer plans to price each additional apartment at $720,000, potentially netting him an further $45 million in profits for the sale of the whole building.

The plan has hit off-plan purchasers hard, with one couple who reportedly placed a down payment on an apartment worth more than $600,000 seeing its reduced from 150 square metres to 94 square metres.

Unfortunately for those purchasers who future homes have shrunk, the contract they executed with Mehajer’s company states stipulates that apartment sizes can be altered.

The development company Mehajer Group said the reports were misleading and false.

“The amendments to the Auburn Local Environment Plan (LEP) involved consultation with and approval from the Auburn City Council and Department of Planning and Environment and is part of the future urban growth proposals and design of the Lidcombe town centre,” the group told the ABC.

Mehajer recently took centre stage in Australia’s popular press for a staging a lavish wedding in Lidcombe hat blocked traffic along key thoroughfares.

He is a part of the Mehajer family – one of the leading developers in the Auburn council area.

The family’s fortunes were established by Mehajer’s father, Lebanese-born Mohamad Behajer, who entered the building trade after resigning from his job at a biscuit factory.

The family has not been free of controversy or scandal, with Mehajer snr incurring a 3 ½ year prison sentence for conspiring to defraud the National Australia Bank of over $3 million, using false documents in a loan application.


Source: SMH
  • This is a disgrace. How is there not laws to protect buyers from such deceptive and greedy tactics. Lets all share this article to everyone we know think of buying off plans so this scam never happens again.

  • You only have to look at the arrogance of this man to realise that nothing is beyond impossible. I guess we know how he will pay be for that spectacle he called a wedding

  • He said he wanted to be famous – wonder if he is happy with the attention he is getting

  • The contract that the purchasers signed stipulates, "the contract they executed with Mehajer's company states stipulates that apartment sizes can be altered." By signing, the purchasers agreed to this condition. Absolutely nothing illegal, misleading or deceptive in that. Buyers must read the contract in detail.

    • Elle, you must either be naive, or maybe you were one of his loyal supports waving your support signs outside Auburn council the other day; either way, your defense of this man actions is deplorable.

      Not only will NO ONE ever buy from this crook again, but this will have impact on any buyer looking to buy of plans again. Legitimate developers use this clause for MINOR alternations during construction, not to take advantage of buyers through greedy and deceptive tactics.

  • I'd be surprised if the ACCC does not become involved in any blatant deceptive re-interpretation of such a contract. A benchmark understanding of possible variances will set a precedent understanding in the order of plus or minus a few percent of area based on any minor final construction matters, but certainly not on intent to squeeze more apartments in – that would be fraud. This would tarnish all future off-the-plan contracts so would be wise for the authorities to step in and nip that in the bud. It should certainly end any future projects for any particular development company that would dare to stretch their client relationships so far – or perhaps they would just phoenix their way through that hurdle?

  • One way of taking advantage of investors and a rising property market, read the fine print.