Victoria Extends Cladding Cost Claims


The Victorian government will extended the time owners have to launch claims against builders that installed combustible cladding on their buildings.

The two year extension to The Cladding Safety Victoria Bill, which introduced by the state government in July last year, will increase the timeframe homeowners have to pursue builders to 12 years.

This extension will apply to all claims where the claim period expired or is due to expire between the date of the government’s announcement of the cladding rectification program—16 July 2019—and 12 months after the new bill commences.

The bill, introduced into Parliament on Thursday, will also formally separate Cladding Safety Victoria, the agency responsible for overseeing the state's $600 million rectification program, from the Victorian Building Authority regulator and make it a standalone body.

“Apartment owners are in this situation through no fault of their own and it’s only right they have as much time as possible to pursue compensation through the courts,” minister for planning Richard Wynne said.

“Cladding Safety Victoria is getting on with delivering our $600 million world-first program to fix hundreds of buildings across Victoria with high risk cladding.”

▲ Neo200 on Melbourne's Spencer Street is one of the first buildings on the list for cladding rectification.
▲ Neo200 on Melbourne's Spencer Street is one of the first buildings on the list for cladding rectification.

In 2014, the Melbourne Docklands Lacrosse apartment building in Victoria was set alight after cladding caught fire when a cigarette was discarded on an eighth-floor balcony.

After the 2017 Grenfell Tower fire in London that killed 72, serious attention was paid to the ­implications of using flammable external cladding across Australia.

The disasters prompted a senate inquiry in 2017 into non-­conforming building products to highlight “some of the broader fire safety and insurance implications of recent fires in high-rise buildings in Australia and internationally”.

In 2017, prime minister Malcolm Turnbull asked premiers and chief ministers to “urgently” audit high-rise buildings for non-conforming combustible cladding.

The following year, planning minister Richard Wynne released new ministerial guidelines were rolled out to building surveyors while a taskforce was set up to investigate the extent of non-compliant cladding on Victorian buildings.

In January 2019, the 43-storey Neo200 tower in central Melbourne was set ablaze, damaging six apartments.

While the building only had 1.5 per cent of its facade covered in combustible polyethylene-core cladding, the mounting cases pushed the state government to announce a $600 million fund to rectify buildings with “high-risk” cladding midway through the year.

Premier Daniel Andrews pledged to pay half of $600 million it said was needed to rectify cladding on 432 “high-risk ”privately owned buildings, in an attempt to end an impasse that left owners across the state with devalued and unsellable apartments.

But it said the federal government, or alternatively, the development industry, would pay the remaining $300 million by introducing changes to the building permit levy.

Following the announcement, research from RMIT University estimated that the cost for rectification could reach as high as $4.9 billion if the focus was on larger apartment buildings was tackled inefficiently.

In its findings the lowest-cost scenario was $573 million for well-managed rectification of smaller buildings.

The Victorian Building Authority has inspected over 2,500 buildings since it began in 2017, with over 800 found to have aluminium composite panels or expanded polystyrene.

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