By 2012, finance had still not been arranged for the retail development and the space was sold to Wolseley Grove Pty Ltd, which won approval in 2014 to insert 29 terrace apartments into the void. 6 Wolseley Grove was finished a year later and was rented out on completion. Just as Wolseley Grove Pty Ltd began marketing the first of the terrace apartments for sale in late 2018, disaster struck. The lofts were evacuated over water and fire safety defects which experts found posed a "serious" risk to residents and could trigger "structural collapse" in a fire. Loading Replay Replay video Play video Play video

According to Wolseley Grove, prospective buyers were "no longer willing" to purchase the terrace apartments or would only do so at "very substantially reduced prices." It launched a lawsuit against the owners corporation of the lofts in the NSW Supreme Court in February, claiming it should be compensated for their failure to keep the lofts "in good repair". According to court documents, three parties had made offers on the terrace apartments by November 2018, but two withdrew them upon learning of the loft defects. Sales contracts were exchanged to sell the third apartment for $1.25 million in December, but the purchaser allegedly reneged during the cooling off period after becoming aware of the evacuation. "The Plaintiff claims that a number of its apartments within 6 Wolseley Grove require renovation to rectify damages caused by water seeping from the lofts above," the summons said.

Loading "All of its apartments within 6 Wolseley Grove have become unsaleable due to the defects in and the dangerous and uninhabitable state of the lofts." Water leaking into the lofts had been caused by the "inadequate or non-existent" waterproofing of external balconies, bathrooms, laundries and the roof, it was alleged. Wolseley Grove Pty Ltd had suffered further damage, the court was told, because it had purchased five of the defective loft apartments. But the owners corporation of the lofts hit back, arguing Wolseley Grove Pty Ltd was "on notice of the defects" when it bought in 2012 and the purchase price reflected their "impact or potential impact".

The loft owners argued that the proceedings were "time barred" and that several other parties should also be liable for any damages awarded, including the insurer which paid out a $1.7 million settlement over the defects last year. The loft owners also lodged a cross claim against Wolseley Grove Pty Ltd, accusing the company of refusing to remove combustible aluminium cladding from the terrace apartments. One of the "luxury apartments" at 6 Wolseley Grove before the troubles started. The cladding "likely did not comply" with the National Construction Code and posed a "grave risk" because it would "contribute to the spread of any fire" in the building. At least two occupants of 6 Wolseley Grove who spoke to the Herald had not been told about the combustible cladding.

Anthony and Diane Yap picked one of the units as the perfect place to start their family, moving in in February. The couple say they were unaware of the defects in or the evacuation of the lofts when they signed their two-year lease. Diane and Anthony Yap are renting in one of the ground-floor Zetland apartments which have not been evacuated. Credit:Louise Kennerley Dr Yap thought it was "odd" that he never saw anyone going upstairs to the lofts and that the couple were subject to monthly rental inspections. "I guess we are lucky we didn’t look into buying this place," he said.

A City of Sydney spokesperson said it had carried out multiple inspections of the terrace apartments since May, and had issued orders that fire safety deficiencies be addressed. Loading "The fire safety defects at 6 Wolseley Grove were a result of the original construction," the spokesperson said. "Some of the deficiencies affect both 19 Gadigal Avenue and 6 Wolseley Grove, due to the unusual construction on the buildings." The spokesperson added that cladding was being investigated at both buildings. Power had been isolated to the lofts, but some was still required for the fire indicator panel and external lighting.