Update on Cladding Safety Victoria: Trials on cladding rectification commence

16 September 2019

The newly appointed CEO of Cladding Safety Victoria (CSV), Dan O’Brien, delivered his first public presentation at the Property Council Cladding briefing on Thursday 29 August 2019.

CSV was established by the Victorian Government to provide support and guidance to building owners and occupants of residential buildings with combustible cladding, particularly where rectification work is required to reduce risks to an acceptable level. Outlining CSV’s mandate, Mr O’Brien stated the organisation’s focus will be on owners corporations, to equip them with the appropriate skills and networks to assist in cladding rectification.

Pilot Program

CSV is currently undertaking a pilot program of 15 of the most high risk buildings and it is from this program that design solutions and guidelines will be developed. The 15 buildings have not been released publicly. Each of the 15 buildings will undergo a cladding rectification process, a 7-step process which Mr O’Brien outlined as: engage, due diligence, appointment of practitioners, design, approvals, construction and completion. Whilst the exact characteristics of the buildings are unknown, CSV have stated they vary in height and location.

Funding

CSV will assess the possibility of funding on a case by case basis. Whilst funding may be available from CSV, the availability of such funding will not preclude the requirement for owners to seek funding through more appropriate legal avenues such as builders warranties. Combined funding from multiple parties is likely.

As the program is currently in its pilot phase, funding is only available to those 15 buildings within the pilot. Interested parties are still encouraged to contact CSV to express their interest in cladding rectification and potential funding.

Timeline

The timeline for repairing impacted buildings is projected to be in excess of 5 years. Regulation of building works will remain in the hands of the Victorian Building Authority.

Implications

The appointment of CSV highlights the government’s continued focus on improving building standards within Victoria. Owner’s corporations are likely to face increased pressure in the face of CSV’s mandate which may have flow on effects to builders and developers alike. Contractors, subcontractors, suppliers and developers should take steps to prepare for queries from owners and body corporates. Increased scrutiny on foreign owned corporations may also stem from CSV’s mandate.

It remains that insurers are unlikely to move from their current approach of carving out coverage for cladding without greater government regulation. This will likely lead to increased costs in both medium to large scale property developments.

Whilst the exact characteristics of the buildings in the pilot are unknown, it is worth noting that CSV’s audit of combustible buildings, from which the 15 buildings were sourced, identified 93% of those buildings as below ten stories and 40% as below three stories. We therefore query how relevant findings from the pilot will be to more substantial built form and commercial premises if the trend in low storey buildings from the audit is also found in the pilot.

How can we help?

HWL Ebsworth Lawyers acts on behalf of a variety of clients, including planning applicants, responsible authorities and objectors in a range of planning, environment and government matters. Our breadth of experience allows us to provide insightful advice to all permit application matters.

Our national construction and infrastructure team has a long history with the construction sector and understands the industry well. We have a large dedicated national team undertaking projects such as PPPs, major infrastructure projects, residential and mixed-use including low-rise, mid-rise and high-rise developments, child care centres, hotels and various other commercial developments.

If you would like to discuss how this decision affects a proposed development, or any other matter, please do not hesitate to contact us.

This article was written by James Lofting, Partner, Leighton Moon, Partner and Chantelle Radwan, Graduate.

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