More time on the clock for cladding claims – the Victorian Government proposes extensions to limitation periods

26 October 2021

Previously the Building Act 1993 (Vic) (Act) allowed a claimant to bring a cladding building action more than 10 years but less than 12 years after the date of issue of the occupancy permit in respect of building work or, if an occupancy permit is not issued, the date of issue of the certificate of final inspection of the building work.

On 7 October 2021, the Legislative Council of Victoria passed the Building Amendment (Registration and Other Matters) Bill 2021 (the Bill), which will, amongst other things, give Victorians 15 years to take legal action against builders responsible for installing combustible cladding on apartment buildings.

Before the Bill comes into operation on a day yet to be proclaimed, here is what you need to know and what steps you can take to protect yourself against such legal action.

What has changed?

The Bill introduced, amongst other things, two crucial amendments to the Act , being:

  • The extended limitation period for cladding actions – the limitation period in section 134(2) of the Act will increase from 12 years to 15 years.
  • The proposed changes are retrospective – the limitation period will also be revived for cladding building actions where the 12 year period has expired.

As a result of the above, owners will have an additional 3 years to take legal action against builders.

What does this mean for those involved?

The Bill ultimately protects the owners as it allows them to be able to undertake the necessary rectification works without the need to commence proceedings immediately against the builder.

No doubt, it will adversely impact builders as they may:

  • have cladding building actions brought against them despite the 12 year limitation period having expired because the new limitation period is applied retrospectively;
  • need to extend their existing insurance policies by 3 years to cover the extended limitation period; and/or
  • not be insured as some insurance companies are excluding cladding from their policies.

Key takeaways

Owners need to be aware of when the statutory limitation period is due to expire so that they can make an informed decision, before it expires, about whether to commence proceedings against the builder.

As for the builders they need to be aware of when the statutory limitation period expires so that they can continue to renew their insurance until the period expires.

This article was written by Paul Graham, Partner, Tara Nelson, Associate and Soha Refaat, Solicitor.

1Is defined in section 134(3) of the Building Act 1993 (Vic) to mean a building action in connection with, or otherwise related to, a product or material that is, or could be, a non-compliant or non conforming external wall cladding product.

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