OWNERS TO PAY FOR ILLEGAL CLADDING REMOVAL

REGULATORS WHO APPROVED BANNED CLADDING WILL WALK SCOT-FREE

Owners will be charged via their rates over a minimum period of ten years, with costs transferred to the new owners if the property is sold. The arrangement will be between owners, lenders and local councils – providing long-term, low-interest loans to pay for building work to rectify the combustible cladding.

Flammable Cladding          Click to Enlarge

According to the Cladding Task Force Implementation Team the total cost of cladding removal and rectification of a building will be apportioned to each apartment subject to valuation and in a manner similar to how normal council rates are assessed. The debt will remain with the apartment by way of higher rates until the loan is paid. The task force has identified 380 apartment buildings many of which had the the same product that caused the Lacrosse apartment building to catch fire in 2014 and the recent London fire where at least eighty residents had perished in the inferno. Information on where these buildings

are located will not be released by the authority but instead have advised that if apartment owners are concerned that their building might contain combustible cladding they should contact their Owners Corporation secretary (previously called Body Corporate) who would have been informed.

London Cladding Inferno
Click to Enlarge

Financing the Rectification of the Lacrosse Building will be difficult without undermining apartments resales. It was estimated to cost around $8.6 million in addition to the $6.5 million already spent fixing damage from a fire that tore up the 21 storey, 328 apartment building,  in November 2014. When added together this would mean a total loan of at least $15 million dollars could be required which would encumber each apartment with an average annual repayment of more than $500 (inc interest) which could make it harder to sell the property, especially to investors, when the normal rate bill of at least $1000 and owners corporation fees are added.

VBA…… Questions You Should Ask Before Apartment Purchase
Click to enlarge

Previously the owners’ corporation had been required by legislation to manage, repair and maintain the common property, organise insurance, raise fees and levies from owners to discharge its role and ensure compliance with the law. While this does not require inspection of every possible risk it is likely that, given the public attention to cladding issues and the work of the authority, cladding would be considered a ‘known safety risk’ and require the owners’ corporation to take expert advice on the risk and determine appropriate action.
Owners’ corporations are permitted to pay for urgent works and to levy owners for maintenance and upgrade works. An owner must comply with an Emergency Order.

Polystyrene is now banned from use in buildings of three storeys or more, bearing in mind that two storeys above a basement is regarded as a three storey development.  This material is generally used to minimise weight and to give the appearance of rendered brickwork above a ground floor level.

Minister for Planning Richard Wynne, announced on 26/6/18, changes to the Local Government Act that will enable the Cladding Rectification Agreement (CRA).

Such arrangements were the key recommendation of the Victorian Cladding Taskforce established last year and chaired by former Premier Ted Baillieu and former Deputy Premier John Thwaites.

No mention of any action against corrupt regulators who were more concerned about their own careers than the safety of the community.

Quotes written for the Minister for Planning Richard Wynne

This scheme is the first of its kind anywhere in the world and offers owners the cheapest and most efficient way of removing dangerous cladding from their buildings.” 

“As well as making properties safe and compliant with building laws, these financing agreements allow cladding to be removed quickly, without affecting property price”.

Glenfell Inferno Aftermath                     Click to enlarge

10 Responses to “OWNERS TO PAY FOR ILLEGAL CLADDING REMOVAL”

  1. Greene C says:

    They are not informing the owners directly as they said they would. If a building has been swathed in combustible cladding then everyone has a right to know particularly those who are considering the purchase of an apartment. The lack of any action against the experts who approved flammable cladding is a worry.

    • Florida Mansions says:

      Cronyism! The government authority could not go after the people responsible without implicating themselves so far reaching was the extent of the corruption. Now it will be the apartment owners who will have to pay extra on their rates to save the skins of these crooks who led the cladding scam.

  2. Hilary says:

    Fire safety checks were usually conducted by building surveyors instead of fire authorities! The MFB would only get involved when invited to do so by a developer or if it wanted an investigation. Unless you had a vigilant observer or a whistle blower, you could not have known about dangers until it was too late. The “audit” committee have identified the properties involved but have decided not to make them public so the owners or prospective buyers will have to conduct their own investigation.

    • Jamieson says:

      Item 10 of Actions You Can Take.
      Suggests the engagement of a Registered Surveyor to review the apartment and the cladding on the exterior of the building prior to purchasing. They could be hiring the same people who contributed to the problem in the first place by approving the lethal cladding without consulting the appropriate authority. Why should apartment owners or buyers have to pay to find out what the task force already know but won’t make public.

  3. East of Whittens says:

    I can understand why they want to limit information on these illegal buildings and the extent of their non-compliance etc.. but it might have unintended consequences. The idea that the purchasers of these buildings, who bought in good faith, should have to pay for the lack of scrutiny or the incompetence of authorities might well be challenged in the courts. Why should it be any different to where a new car has a problem that could cause a fire in its engine or a faulty airbag that could cause death and when the manufacturer recalls the vehicle and the problems are fixed without cost to the purchaser?

  4. Resteasy says:

    The only way buildings can be made safe is for the owners to foot the bill so costs will be minimised by cutting corners. The 380 buildings, of the 5,000 that have been identified with the PE cladding, are at the higher end of non compliance. No action recommended on apartment buildings that are able to off set the danger of the combustible material by the employment of various fire prevention methods such as external sprinkler systems etc.

  5. Rodney says:

    Tenants are not eligible to find out whether the apartment they are renting is part of a building that does not meet fire safety requirements? Why can’t the information be made available to every citizen …why the secrecy? Even the owners have to “investigate” whether or not they are living in a fire trap. The answer of course is to limit the exposure of the corruption that has been going on for years and to discourage debate on whether the measures that the government are employing to fix the problem have gone far enough.

  6. Remember Chifley says:

    The unions have been conspicuous by their absence. In the old days they would have taken a leading role in getting to the bottom of this scandal but now they are allowing their members to be duped by a labor government whose ideology was once to protect the worker not big business.

  7. Ron Carter says:

    The cladding task force have a deadline to have a finance plan in place by the first of November this year. Apparently low interest loans are to be negotiated with the Banks. Taxpayers will also be footing the bill for rectification of flammable cladding on some of our Hospitals such as the Royal Melbourne (north wing expansion) and the Royal Melbourne Womens Hospital. No action will be taken against the Consultants, Fire Inspectors and Architects who approved or recommended the installation of the combustible cladding.

    • Colin says:

      At the very least they should be fined and banned from working in the industry but that won’t happen because they have mates in high places.

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