NSW apartment owners could face bills for millions of dollars to replace unsafe cladding
19 July 2017
Police release video showing devastated apartments inside the London
tower block destroyed in last week's intense building fire.
Apartment owners could face bills for millions of dollars if plans go
ahead for a high-rise fire task force to identify buildings with
potentially fatal aluminium cladding.
Innovation and Better Regulation Minister Matt Kean is understood to be
determined to push ahead with new measures to make sure that NSW, the
state with most high-rises, doesn’t become the first to suffer a
disaster on the scale of the Grenfell Tower tragedy.
Mr Kean has declined to comment, but the package currently being
discussed in Cabinet is believed to include the formation of a task
force with special powers to prevent the continued sale and use of
unsafe building products, including dangerous cladding.
However, builders responsible for installing the same materials that
caused the rapid spread of the Grenfell Tower fire could walk away
without it costing them a cent, under current building defect
And it could also require owners corporations (body corporates) to
immediately repair buildings identified as having fire safety risks.
could easily cost individuals an average of $50,000 each
This latter proposal has raised concerns among strata owners that,
under current building defect regulations, replacing dangerous cladding
could easily cost individuals an average of $50,000 each, based on $15
million bills for repair and replacement in the 312-unit Lacrosse
building in Melbourne’s Docklands, following a balcony fire in 2014.
Not only that, under strata building defect laws, most of the builders
and developers who cut corners by using the cheaper, potentially deadly
cladding, will be obliged to pay nothing.
This puts the government in an invidious position, say observers, where
they clearly want to move quickly to protect lives but to do so under
current regulations would penalise the potential victims.
“It is essential that at-risk buildings are identified,” said Karen
Stiles, executive officer of the Owners Corporation Network—Australia’s
peak body for apartment owners. “But it’s unconscionable to expect
innocent owners to foot the bill for remediation while the culprits get
off scot free.”
That said, the OCN is supporting the government’s general thrust towards tighter regulation of the building sector.
“OCN strongly supports the NSW government’s undertaking to expedite the
urgently needed and industry supported fire safety and certification
reforms recommended by the 2015 Lambert Review,” added Ms Stiles.
“Without severe consequences for perpetrators, these life-threatening
shortcuts will continue to be taken.”
Currently, due to the way building defect claims are structured, even
owners of relatively new buildings in NSW could be forced to pay for
any safety upgrade.
Under strata law, the cladding would currently be categorised as a
“non-major” defect, meaning owners only have two years from the
building’s completion in which to claim the costs of its replacement.
Otherwise they must, by law, repair the defects and do so at their own
A major defect, which has a six-year claims window, must by definition
render the building or part of it uninhabitable. However, even the
Lacrosse building has been ruled safe for occupation by Melbourne’s
the ultimate issue is public confidence
Leading strata lawyer Stephen Goddard says the ultimate issue is public
confidence in the apartment sector to provide safe and secure housing
without owners constantly having to make good the shortcomings of
builders, developers and public policy.
And, he adds, at the heart of the problem is a lack of a legally enforceable regime of responsibility for shoddy work.
Mr Goddard cited a High Court ruling last year that, because of a legal
technicality, developers and builders owed no duty of care to the
owners of apartments in a building in Chatswood that had millions of
dollars worth of defects.
The absence of a ‘duty of care’
“The absence of a ‘duty of care’ only threatens public confidence in
strata living,” Mr Goddard told Domain. “Where does that leave public
policy for housing our growing population?”
unsafe cladding pouring into the country
Meanwhile, academics have warned that the problem is likely to get
worse before it gets better, with unsafe cladding pouring into the
country, despite requests to the federal government from industry
bodies to ban it.
“Evidence suggests that increasing amounts of non-conforming building
products are entering the Australian market, making it harder to ensure
occupant safety,” says Dr Darryl O’Brien, head of Central Queensland
University’s Built Environment courses.
“Reliable data quantifying the extent of non-compliant products in the
Australian construction sector is not yet available. However, anecdotal
evidence suggests that the presence of non-conforming building products
is an emerging hazard,” Dr O’Brien said in a statement issued today.
“For example, the Australian Industry Group in 2013 found that 92 per
cent of companies surveyed had reported non-conforming products in
their market sector.”
chapter previous next