Cladding Rectification Victoria: What Body Corporates Need to Know

Victorian Building Amendment (Cladding Rectification) Bill 2019: A Closer Look

The Victorian Legislative Assembly recently introduced the Building Amendment (Cladding Rectification) Bill 2019 to address the ongoing cladding crisis. This Bill has three main objectives:

1. Expanding the Victorian Building Authority’s Role:

The Bill grants the Victorian Building Authority (VBA) greater authority in overseeing and advising on the rectification of non-compliant cladding on buildings across the state. This builds upon the VBA’s involvement in the 2017 Victorian State-wide Cladding Audit.

This expanded role includes:

• Providing technical advice and guidance: The VBA will offer expert advice to building owners and relevant authorities on cladding rectification methods and best practices.
• Monitoring rectification work: The VBA will monitor the progress of cladding rectification projects to ensure compliance with building codes and safety standards.
• Developing industry guidelines: The VBA will collaborate with industry stakeholders to develop comprehensive guidelines for cladding rectification, promoting consistency and quality across the sector.

2. Establishing a Cladding Rectification Fund:

A dedicated account will be created for Cladding Safety Victoria to provide financial assistance to building owners for cladding rectification. This will be funded by an additional levy on certain building permits, potentially covering up to 82% of rectification costs. However, the bill lacks clarity on the specific criteria for accessing these funds, leaving many building owners in a state of uncertainty. Key concerns include:

Key concerns include:

• Eligibility criteria: The Bill doesn’t specify which buildings will qualify for financial assistance, creating anxiety for owners unsure if they will receive support.
• Application process: The process for applying for funding remains unclear, potentially leading to delays and frustration for building owners.
• Funding limitations: While the levy may cover a significant portion of rectification costs, owners may still face substantial out-of-pocket expenses.

3. Protecting Against Double Recovery:

The Bill aims to prevent building owners from receiving double compensation for cladding rectification – once from the builder and again from Cladding Safety Victoria. It proposes transferring all rights and remedies of any building owner receiving financial assistance to the Crown. This grants the Victorian Government the power to pursue recovery claims against any party involved in the installation of non-compliant cladding, including builders, subcontractors, consultants, suppliers, and manufacturers.

This raises questions about:

• Liability and accountability: How will responsibility be apportioned among the various parties involved in the cladding supply chain?
• Legal complexities: The subrogation process may lead to complex legal battles and potential delays in resolving cladding disputes.
• Impact on insurance: How will this affect insurance claims and coverage for building owners and other stakeholders?

Unanswered Questions and Optimism:

While the bill offers a glimmer of hope for owners grappling with unsafe cladding, it leaves crucial questions unanswered, particularly regarding eligibility for financial assistance.

As the Bill progresses through the Victorian Parliament, we’ll continue to provide updates and analysis.

Conclusion

This Bill signifies a step towards addressing the cladding crisis in Victoria, but its effectiveness hinges on the clarity and accessibility of the financial assistance scheme. The lack of detail regarding eligibility criteria and the application process is a significant concern for building owners.

Furthermore, the long-term implications of subrogating rights to the Crown remain to be seen. While it aims to prevent double-dipping, it also raises questions about the potential complexities and delays it could introduce into the rectification process.

Ultimately, the success of this bill will depend on its implementation and the government’s commitment to providing timely and adequate support to affected building owners.

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