This article was written by Amy Munro, Paul Tamburro, Nik Lukic.
Following the fires at Grenfell Tower in London and at the Lacrosse Building in Melbourne, the Victorian Government has sought to develop policy solutions to rectify the dangerous combustible cladding that has been installed at many multi-storey residential and commercial buildings in Victoria.
This concern about dangerous combustible cladding has now sparked legislative change. In September 2020, the Victorian Parliament passed the Cladding Safety Victoria Bill 2020 (Bill), which is expected to be made into law shortly.
2. What does the Bill do?
Establishment of Cladding Safety Victoria
The Bill establishes Cladding Safety Victoria (CSV) as a separate body corporate, so that it will no longer operate as a business unit of the Victorian Building Authority. It prescribes the way in which CSV will carry out cladding rectification in Victoria, allowing municipal building surveyors to notify CSV of buildings that they suspect to have defective cladding, as well as allowing CSV the ability to determine if it will grant financial assistance for cladding rectification work.
Rectification of cladding
Where CSV agrees to provide financial assistance, it will enter into a funding agreement with the affected building owner or owners corporation to enable rectification of that cladding. Entry into the program is voluntary, but it will undoubtedly be very attractive to building owners seeking funding to replace dangerous cladding at their building.
To facilitate and oversee the rectification works, CSV appoints an Independent Project Manager whose role includes appointing the builder and architect, determining the scope of works and superintending the project once construction begins.
Extended limitation period for cladding building actions
The Bill also extends the limitation period for a “cladding building action” from 10 years to 12 years. This is defined to mean as “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”. The extension of the limitation period allows owners of buildings affected by combustible cladding to bring a claim up to 12 years after their date of issue of an occupancy permit. This will only apply to building owners and owners corporations whose claddings building actions were time barred between 16 July 2019 and 12 months after the Bill becomes law.
This measure also supports CSV’s ability to recoup some of the funding it provides to building owners. Under the Building Amendment (Cladding Rectification) Act 2019, CSV has a subrogation right which allows it to step into the shoes of the building owner in order to bring legal proceedings against third parties responsible for the non-compliant cladding being installed.
3. How we can help
This Bill marks a further step in this developing area of law. We have assisted owners corporations and builders commence or defend building actions in relation to combustible wall cladding, and we have advised owners in receipt of financial assistance from CSV.
We are able to help Victorian owners and owners corporations navigate their rights and responsibilities under these changes, and carefully consider whether they now have an entitlement to commence a building action for combustible wall cladding. We are also able to help builders determine whether they are potentially liable for the extended limitation periods.