VIC: Who pays for cladding and rendering repairs in an apartment block?

Question: My apartment block requires cladding work and rendering replacement to the entire building. Who is responsible for paying for this work?

My apartment block built in 2012 requires cladding work and rendering replacement to the entire building at a cost of $400,000. The owners corporation has contacted all apartment owners to organise division of the cost to pay for the work to be done.

Who is responsible for paying for this work?

Answer: Assuming cladding and rendering is not covered by any warranty, VBA scheme or other plan then the Owners Corporation is responsible and they will be required to either take the funds from previously saved funds, raise a special levy or borrow to fund the work.

Remedial repairs of this nature can be confronting and as identified within the question expensive to implement, however there are certain responsibilities that fall with an owners corporation when it comes the management of remedial repairs and these are laid out within the Owners Corporations Act 2006 (the Act) in Division 1, Section 4 as outlined below:

Functions of owners corporation

An owners corporation has the following functions—

1. to manage and administer the common property;
2. to repair and maintain—
   
   1. the common property;
   2. the chattels, fixtures, fittings and services related to the common property or its enjoyment;

Common property means land shown as common property on a plan of subdivision or a plan of strata or cluster subdivision.

If the external walls of each lot are not part of the plan of strata then the likelihood is that the walls will be chattels – (property other than land), however if the building is a multi storey one then the external wall will be on the plan of strata.

Additionally – Division 5 Asset Management, section 46 of the Act:

46 Owners corporation to repair and maintain common property

An owners corporation must repair and maintain—

1. the common property; and
2. the chattels, fixtures, fittings and services related to the common property or its enjoyment.

There are also multiple sections that go into detail about the repair and maintenance, the funding, the raising of levies etc.

The bottom line is that assuming that cladding and rendering is not covered by any warranty, VBA scheme or other plan then the Owners Corporation is responsible and they will be required to either take the funds from previously saved funds, raise a special levy or borrow to fund the work.

There is no reference within the question to combustible cladding, however in such instances the owners corporation should refer to the CSV website for guidance.

When facing remedial repairs, is it highly recommended to gain advice from experts to assist in providing a detailed scope of works, management of the tender process and project management to ensure that works are all inclusive, are of the highest standard are completed in line with Australian Standards and to assist with cost management throughout the life of the project.

This post appears in the December 2021 edition of The VIC Strata Magazine.

Scott Driscoll
Driscoll Strata Consulting
E: scott@driscollstrataconsulting.com.au
P: 0409 632 003