04 July 2017

Senate inquiry into cladding and building materials in Australia

This article was written by Monique Carroll.

The Australian Government has announced an inquiry into the use of cladding, following the Grenfell disaster where non-compliant, flammable cladding is being blamed for the catastrophic fire that killed 58 people. The inquiry will form part of the Government’s existing inquiry into non-conforming building products.

What to expect

The Senate has been conducting an inquiry into non-conforming building products since June 2015 and is due to deliver its final report in August 2017. The timeline for completion of this report will likely be extended so that evidence can be gathered in relation to the specific issue of non-compliant cladding. It has been reported that a high number of buildings around Australia are suspected of having cladding which does not comply with Australian Standards.

What should you do?

If you are concerned about cladding (or other building materials) used on your building, or which your company has procured as developer or builder, we recommend that you arrange to have the materials tested as soon as possible.

If material is found to be non-compliant a remediation plan (and depending upon the level of non-conformity) a crisis-management plan be designed and implemented. The remediation and crisis management plan should be focussed first on safety. 

Other important considerations are:

  • complying with any product recall requirements under the Australian Consumer Law and co-operation with regulators
  • identifying, managing and settling claims (incoming from your tenants or purchasers for example, and, outgoing such as claims against the manufacturer), including bulk claims and class actions
  • obtaining security for claims against the manufacturer particularly if they are off-shore
  • understanding and invoking any available insurance
  • public relations, including being aware of how and when ‘bad’ news will become public
  • disclosure requirements for publicly listed companies.

Key contacts

A Guide to Investing in Australian Real Estate

Investing Down Under offers a quick overview of the legal, taxation, FIRB and structuring issues you may encounter when investing in Australian real estate.

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