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You are here: Home / Defects / Defects VIC / URGENT Cladding, Capital Improved Value & Council Rate Valuations in Victoria

URGENT Cladding, Capital Improved Value & Council Rate Valuations in Victoria

Published September 19, 2019 By The LookUpStrata Team Leave a Comment Last Updated November 24, 2019

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This article about the how cladding can affect your Capital Improved Value and therefore should be affecting your rates in Victoria has been supplied by Neil Fitzpatrick, a VIC Committee Member and LookUpStrata Subscriber.

In early August property owners received their Council Rate Notices for the period 1 Jul 2019 – 30 Jun 2020.

Rates are based on the ‘Capital Improved Value‘ which are now updated annually, therefore, any valuation changes driven by any factor should be reflected in the Capital Improved Value.

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Why have no changes been made to rates for properties identified with flammable cladding?

Capital Improved Value There are over 1,000 properties that have been identified by the Victorian Cladding Taskforce lead by Ted Baileau. If you assume that there are on average 50 residents in each building that is 50,000 affected properties. Let’s further assume that 20% (I know that is high) have changed hands in the 18 months leading up to 1 January, 2019 which is the valuation date for calculation of the Capital Improved Value. I expect that valuation (sale price) would have been captured in the Capital Improved Value.

That conservatively leaves 40,000 properties that have not had the Capital Improved Value correctly reviewed.

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They have not been reviewed as the properties that are affected have been kept secret. Therefore, the Local Government has NOT passed on the information onto the property valuers. I know this to be a fact.

Appealing Your Capital Improved Value

Last year I appealed my valuations & was successful, however, it was made very clear to me that the devaluation was not based on flammable cladding on the building in which I live. I have also contacted the inner city manager for the Valuer Generals Victoria (VGV) office who is responsible for this: “The Valuer-General and his staff at Valuer-General Victoria (VGV), oversee valuations for State Government property transactions and the making and return of council rating valuations“.

The response from VGV was one of concern, however, there was nothing they could do as the valuations were in their opinion were correct based on the information they were provided with. They were NOT provided with a listing of the properties affected by cladding.

The valuers are not aware of the devaluation as they have not been provided with the information either & when they come to inspect your property & it’s extremely difficult for them to take into account the $ impact as AGAIN they need comparable data to gauge the impact. They can, of course, look at the same building if adequate sales have occurred.

Property owners have only 2 months to lodge an objection from the date of issue of the ‘Rate Charges & Valuation Notice 2019 – 20’ issued by the Council. Over one month has already passed.

Owners of buildings with flammable cladding have already taken a blow & now thousands are being overcharged on their rates & the Government is supposed to be assisting those living in properties with flammable cladding.

Trying to contact the Cladding Taskforce is akin to a secret organisation within ASIO. You can only contact the cladding taskforce by email which has to be sent to Victoria Building Authority (VBA) who in turn pass it onto the Taskforce. As yet I haven’t had any response to my request despite having to enclose a copy of my passport with the email.

How Many People Know Which Buildings are on the ‘Secret’ List?

The cladding information has not been made public due to terrorism & arsonists attacks says Daniel Andrews, yet at least the following people are aware :

  • everyone who lives in an identified building with cladding. They are over 1,000 identified properties. If you assume on average 50 apartments in each block that is 50,000 properties. Furthermore, 1.5 people in each apartment amounts to 75,000 people. How can that be a secret?
  • friends, family members of the above group
  • ex owners who have sold because of the cladding
  • real estate agents
  • Employees at the Victorian Cladding Taskforce
  • Employees at the Local Councils that have been working with Taskforce
  • Contractors undertaking inspections
  • any potential buyer as the S32 notice in the contract of sale has to disclose the cladding
  • our building insurer as the insurance premium increased from $10.5k to $27.5k & a special notification was made in the policy for a cladding claim excess
  • any employee of the insurer that has access to the file that contains the building exterior details
  • all other insurers as we cannot get anyone interested in our building when we contacted them directly or via a broker. The standard response was ‘due to prior claims & the building materials used we deny quoting on your premises’
  • etc, etc

Have a question or something to add to the article? Leave a comment below.

This post appears in Strata News #285.

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Impact to households who are living in apartments with flammable cladding
Are you an owner in a building affected by combustible cladding? RMIT would like to invite you to participate in the ‘‘At what cost? Cladding concerns for owners” research project.
They are interested in learning more about the scale of the problems owners of property affected by combustible cladding face day to day across Australia, particularly those living in apartments. Find out more via this document from RMIT.

Read next:

  • VIC: Tackling High-Risk Cladding To Keep Victorians Safe
  • Flammable cladding costs could approach billions for building owners if authorities dither
  • Managing the Cladding Crisis: aluminium composite panel (ACP)

Neil Fitzpatrick
Secretary on the Owners Corporation, Port Melbourne

Who is Neil Fitzpatrick? I’m the Secretary on the Owners Corporation for my Building in Port Melbourne. I’m a retired Finance Manager who, like so many people in this state, are struggling to work through the Cladding debacle in Victoria. We have had several positive announcements from our Premier, Daniel Andrews but no action as yet. There are over 1,000 buildings identified in Victoria which potentially have been affected yet the listing is held ‘secret’ due to potential arson attacks.
Whilst I have some empathy for the State Governments stance on this matter, the fact is that there are at least 100,000 people that are aware of at least 1 building that has flammable cladding, which is hardly a secret.
In the meantime, the valuers who access the property for Council Rate purposes are not aware that a building has cladding. Flammable cladding devalues your property, hence, the valuations are overstated & owners council rates are too high.
Therefore, not only does the owner have a devalued property, they are overpaying rates to the local council.
Owners have 60 days to appeal the valuation on their rate notice. They need to act quickly as there is only a couple of weeks remaining to appeal.

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