Lacrosse owners, hit by soaring insurance premiums, take $11m recladding loan
Financial Review
27 August 2018
Owners of the 328 apartments in Melbourne's troubled Lacrosse building
have taken out an $11 million loan to cover replacing its combustible
cladding, nearly four years after the original fire at the residential
tower.
The owners corporation committee, which next week squares off with
builder LU Simon in the Victorian Civil and Administrative Tribunal in
its damages claim for $24 million, opted for a 15-year loan from
finance group Lannock Strata Finance after Macquarie Bank declined to
offer it that much and only for 10 years, court documents show.
The residents will be counting on paying back the loan, which will have
an interest-only period of two years, well before the expiry date,
based on its damages claim against the builder, but the details,
contained in a witness statement of Owners Corporations chairman
Jeffrey Dawson, reveal the cost for apartment owners of living with
potentially dangerous cladding.
Continued existence of combustible polyethylene-core cladding on the
building has pushed up their insurance premiums by 80 per cent each
year they've had the cladding on the building, according to Mr Dawson's
statement.
The building's insurance premium had increased every year since FY2016
due to cladding that had still to be removed and in total as much as
$534,270 out of the total $1,023,209 that had been paid in insurance
since 2016 was attributable to cladding-related rises, he said.
"As a result of the fire, the building's strata insurance premiums have significantly increased," Mr Dawson said.
top contents
chapter previous next