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Lendlease to buy back up to 841 homes at ‘sinking’ Jordan Springs East site in Sydney

The property giant Lendlease will offer to repair or buy back up to 841 homes in a western Sydney estate built on landfill and dubbed the sinking suburb.

The company maintains that only about 90 of the homes it constructed in Jordan Springs East are actually damaged or affected by structural issues.

Penrith city council has warned residents and potential buyers that independent investigations have found the suburb is allegedly built on landfill “of low relative compaction” and is subsiding.

The council initially added notations to planning certificates reflecting concerns for a smaller number of homes but progressively expanded the list of subject properties. The number of planning warnings rose significantly in September, from 195 to 841.

Lendlease’s offer to buy back the properties is being framed as a reassurance to homeowners concerned about the impact the council’s notations will have on the value of their properties.

A spokesman told Guardian Australia the company is attempting to have council planning notations removed from the “vast majority” of its customers’ properties because Lendlease investigators believe they are not affected by structural issues.

The spokesman also said reports on Tuesday that Lendlease will buy back every home in the $600m suburb are incorrect and the number of properties it repurchases will rely on damage assessments and whether owners want to repair their houses or have their initial investments returned.

“Based on our investigations and expert advice, we firmly believe the vast majority of properties aren’t impacted by excessive settlement, which is localised to approximately 90 houses in the precinct’s Armoury Road area,” he said.

“In response to council’s actions, we’ve proactively reassured residents – beyond the 90 we believe may be impacted – that we’ll support them in the unlikely event that their property experiences settlement issues beyond the requirements of the Australian Standard.”

Announcing the additional planning warnings in September, the Penrith mayor, Karen McKeown, said the council “is aware that such notations may be of concern to some homeowners and wants to assure them that the decision to take this course of action was taken only after extensive professional assessment and in the best interests of all property owners”.

“We have a moral and legal obligation to give current and future owners information on matters that may impact their property,” McKeown said.

Lendlease previously announced a compensation scheme for Jordan Springs East but the latest move extends the offer to all homes subject to the planning notations after reports of cracks and damaged properties in the suburb.

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