Building owners have become unfairly responsible for the cost of a cladding problem they had no hand in creating.
As the work to identify, prioritise and rectify buildings with combustible cladding steadily progresses across Australia, a consistent and unfortunate trend has emerged. The responsibility for paying for rectification work is falling on the shoulders of building owners, who have inherited this problem through no failure of their own, but through a failure of the system meant to protect them.
In Victoria, the recent introduction of ‘Cladding Rectification Agreements’ offers property owners and body corporates the use of low interest loans paid through their rates to finance combustible cladding replacement. Under the scheme owners will be charged loan repayments via their council rates over a minimum of 10 years, with costs transferred with a property if it is sold. While helpful, the scheme places the onus squarely on owners.
In Queensland, the Department of Housing and Public Works is reportedly prepared to introduce legislation to require building owners to remove combustible cladding, if
they don’t act to do so on their own.
In New South Wales, new legislation retroactively banning aluminium panels with a core of more than 30% polyethylene will enable local councils to issue rectification orders to owners of affected buildings, requiring them to eliminate or minimise the risk posed by the cladding.
Over all of this is pressure from insurers, who have understandably raised premiums for affected buildings.
One of the saddest facts about this responsibility falling on owners is that in order to have dangerous cladding replaced quickly and remove the risk it poses, there does not appear to be another option.
Audits by governments at all levels have found thousands of buildings around the country likely to have combustible cladding installed. The risk that poses to Australians is immense, and it needs to be addressed as quickly and efficiently as possible.
Unfortunately, the legal wrangling to determine who is ultimately responsible for this dangerous material being installed on each of these buildings will take years. The process is still underway for the Lacrosse building in Melbourne, which began in 2014 after it caught fire. That process will now need to be repeated potentially hundreds or even thousands of times over coming years, with proportional liability being determined anew for each unique case. In time, that process should hopefully allow building owners to recoup the cost of rectification from the liable parties.
But addressing the risk of another Lacrosse or Grenfell can’t wait for that process to be completed.
Sadly, that means action must be taken by with the responsibility for these buildings right now, the owners. Frequently these owners, many of them residents in apartment buildings, are also the ones facing the risk and are therefore the most motivated to address it.
It is not a situation building owners should be facing. They have become unfairly responsible for the cost of rectification through no fault of their own, let down by the failure of enforcement and compliance to building standards. They deserve better from their government, their regulators, and the construction industry, of which fire protection is a part. We have some work to do to restore their trust and deliver the quality outcomes consumers expect.
For more information, go to www.fpaa.com.au
