Question: Is there any progress, or do you have anything to report with the fireproofing and combustible cladding issues in Victoria?
Answer: My understanding is that money is going to dry up pretty quickly and they’ll be a lot of Owners Corporations that will be left to their own devices to rectify the cladding.
Cladding Safety Victoria (CSV) is an organisation set up by the government to deal with the combustible cladding installed on buildings. My understanding was that they had $600 million of funding originally and they were actually associated with Victorian Building Authority (VBA). Recently, my understanding is that those two organisations have separated. CSV now has to stand on their own two feet, so to speak, and I heard a comment the other day that a lot of the funding is going towards the administration of making sure that organisation can work.
So going back to the Owners Corporations that are affected, yes, there have been a number that have received funding from CSV to rectify the noncompliance, aluminium composite panels, or the Expanded Polystyrene (EPS). Although I haven’t heard much recently in regards to how much money there is still available for Owners Corporations, my understanding is that money is going to dry up pretty quickly and they’ll be a lot of Owners Corporations that will be left to their own devices to rectify the cladding.
One of the biggest issues that we’ve found (and we do manage a number of properties affected) is that the cladding is removed and or there’s destructive testing to identify that the cladding is non compliant. But also, during that testing, that identified what’s behind the cladding is also defective in terms of the building. The CSV will only fund the replacement, the cladding, not the rectification of the other non compliant building, whether it’s the construction of the facade. So the Owners Corporation will need to put their hand in their own pocket to fund those works.
I was actually speaking with a company last week at an SCA conference and that chap is in the business of lending monies to Owners Corporations. Their business is pretty busy at the moment because a lot of Owners Corporations are putting their hand out to fix these other issues, aside from just the rectification of the cladding.
Further to that point, if you are experiencing a situation where you believe you’ve got cladding, engage expert. That expert should be either a fire engineer or a building surveyor. Get a report from them to understand whether there is any combustible cladding or non compliant cladding installed. Then, if the builder is still around, there is recourse back to the builder. If the building is within 10 years, however, with that being said, I understand the government has extended the statutory warranty to 12 years (so 12 years from the date of occupancy of the building), the Owners Corporation has recourse back to the builder if they’re still around. If the builder has died, disappeared or become insolvent, then there’s no recourse.
If the Owners Corporation has builder’s warranty insurance, then they may be able to make a claim on that. Otherwise they’ll go to the CSV to try and get funding to remedy the defect.
This post appears in the June 2021 edition of The VIC Strata Magazine.
Gregor Evans
The Knight
Email
P: 03 9509 3144
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