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Exclusive by Jesse Thompson

Residents in a troubled group of Palmerston rental properties were warned to evacuate if a cyclone struck

Lori Montgomery moved into one of the properties in 2017. (ABC News: Michael Franchi)

Families living in a group of troubled affordable rentals in Greater Darwin have been warned they will need to evacuate their homes in the event of a cyclone after teams of engineers identified problems in the homes.

The warning was issued to residents of 16 homes in the Palmerston suburb of Johnston.

Those homes were built to ease a growing housing affordability crisis for low and moderate income-earners in the Top End.

The ABC has spoken to several of the project's former residents, some of whom said the townhouses were initially a blessing, providing new and modern housing, cheaper rent and, for some, a pathway to home ownership.

But, over time, they said, the homes became marred by issues including leaks and water damage, cracks appearing in walls and various hazards.

The properties are now empty while insurance claims and an investigation — both overseen by the Northern Territory government — progress.

However, internal government documents obtained by the ABC have now revealed the government became aware of some defects in the properties years ago, raising questions about whether it could have acted earlier and prevented the long saga that has followed.

The townhouses are the second group of affordable Palmerston properties whose residents have previously been advised to evacuate in the event of a cyclone. A similar government warning was issued to owners of 18 homes in the nearby suburb of Bellamack last year.

The homes are now roped off and vacant while repairs are carried out. (ABC News: Jesse Thompson)

'A nice little community'

The government spent more than $6 million purchasing the 16 dwellings off the plan as part of an investment in affordable housing early last decade.

The properties were completed in 2015 then transferred to Venture Housing Company — a local, not-for-profit organisation that offers subsidised rent and an alternative to government housing, which can have strict income ceilings and long waitlists.

In testimonials published by the company, some of Venture's tenants have said the company helped them get out of poverty.

When Lori Montgomery moved into one of the Johnston houses in 2017, she was recovering from a broken relationship. 

She set about rebuilding her life on a street with fellow single mothers and space for their children to play.

"It really felt like a nice little community," the mother-of-two said.

"The kids used to all walk down the street and go to the park together.

But after Cyclone Marcus passed over Darwin and Palmerston in 2018, Ms Montgomery said she began to notice small cracks forming in the walls of her two-storey townhouse.

Damage in the wall of Ms Montgomery's home.

She said the housing company would send tradespeople to seal the fissures, but the issues would return.

"I voiced concerns that it was more serious, that it wasn't just a patch needed — obviously there's been some damage to the frame of the house, it's not square any more — something's going on," said Ms Montgomery, who praised Venture's responsiveness.

She said she welcomed news that the company would dispatch engineers to inspect about half a dozen houses, following a long list of complaints from residents.

Residents warned to evacuate

The cyclone evacuation advice issued to residents was based on the findings of those engineers.

As previously revealed by the ABC, the teams identified a large number of defects across multiple dwellings before concluding they had a potential impact on the safety and livability of the homes in about 2018.

The letter sent to residents in January 2020 was based on updated engineering advice, according to Venture chairman Allan McGill.

The letter said that Venture had received a report advising the houses could not safely be occupied during a cyclone and offered to help residents find another place to stay.

The housing company urged residents living in the houses to evacuate in the event of a cyclone. (ABC News: Che Chorley)

"Venture acknowledges that this advice and the contents of this letter may be distressing to you, but stresses that it has not received advice to indicate that your current occupation of the premises is unsafe," the letter, seen by the ABC, said.

"The purpose of this letter is to make sure that you are prepared to evacuate in the event of a cyclone."

The ABC understands the engineers' report made no findings about who was responsible for the problems.

Developer Tomazos Group has not admitted responsibility for the issues, but said in a previous statement that the buildings were fully certified, and that the company had to finish building the properties after another builder it engaged liquidated in 2014. 

It said an engineer and a registered building certifier had assured it that the work done by the original builder was compliant with all codes.

Faced with the updated advice, Venture eventually decided to move the tenants out of the houses and accommodate them in other properties. 

Ms Montgomery, who had moved out of the property by the time the warning was sent, said it confirmed fears she held about the property she shared with two children.

Another former tenant, Jacinta Benger, said she was worried about how the buildings would fare in the event of a severe cyclone when she spoke with the ABC last year.

"There was a fair bit of movement in them," she said at the time.

Government aware of some defects in 2015

The ABC can now reveal the government became aware of some defects in the properties before they were even tenanted.

Documents released under Freedom of Information laws show the Housing Department identified some issues shortly after the houses were completed in 2015.

That was confirmed in an October 2018 departmental memo sent to its then-CEO, the current NT Police Commissioner, Jamie Chalker. 

"Defects identified during the department's inspection of the dwellings were notified in writing to the developer and a re-inspection was conducted prior to the issuance of titles for all the dwellings," the memo said.

"The identified defects were rectified by the developer."

The houses were built along two streets in the Palmerston suburb of Johnston. 

In a letter later sent to the housing company's lawyers, Mr Chalker wrote that the situation was concerning "given the department received Occupancy Certificates for each dwelling that was transferred to Venture Housing in 2015".

A spokesman from the Department of Territory Families, Housing and Communities said they were unable to respond to questions — including about the nature of the defects and what steps were taken once they were identified — citing ongoing insurance applications under the government's Home Building Certification Fund, and an investigation into the matter.

Dozens of pages of the released documents were entirely redacted on the basis that their release could prejudice the investigation.

The released documents also show bureaucrats had been trying to determine whether the properties were eligible for the insurance under the Home Building Certification Fund since at least October 2018.

Insurance claims that were lodged for the Johnston properties the same year are now being finalised, and the rectification work the fund covers is now being carried out at an unknown cost.

Country Liberal Party Member for the Palmerston seat of Brennan, Marie-Clare Boothby, criticised the length of time it had taken to carry out the repair work.

"The fact that the Gunner government has taken more than three years to finalise these claims and only just begin talking about the repairs is three years too long," she said.

Marie-Clare Boothby questioned how long the government took to process the insurance claims. (ABC News: Che Chorley)

Houses to be tenanted in coming months

New families are expected to move into the properties shortly after repairs are completed in the coming month.

But the saga continues to have an impact on some of those who used to live there.

Ms Montgomery said she had been banking the savings she made from the cheaper rent as part of a long-term plan to buy a home of her own.

"I had started to save a decent-sized little nest egg," she said.

"I was looking at trying to buy a home of my own, for my girls and I, that wasn't going to be contingent on anybody else."

Lori Montgomery says she had a plan to use her rent savings to buy a house. (ABC News: Michael Franchi)

But she said that plan was dashed when safety fears prompted her to move out of the Johnston home in 2020 and into a private rental market with rising rents.

At 46, and spending about $650 a week renting with a partner, she said she was resigned to the fact that she might never pull together a deposit for a house in the region she had called home for two decades.

"There is such a shortage of housing here in Darwin and housing availability, it is a community issue but it's such a women's issue," she said.

"If you're a single mother, I don't know how anyone does it.

"I don’t know how women that were living here alone have gotten on.

"It is just awful."

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