Cladding Compliance & Liability Risk

Cladding

The use of the product is widespread in any urban area that experienced a spike of building activity since the 1990s and is present in a range of asset classes and applications, including in refurbished assets. Unlike some other non-conforming building products (NCBPs) its use wasn’t confined to budget projects, rather, it was extensively used in high end architect designed projects, including public buildings. Its presence in multi-owner buildings, such as residential strata, presents particular issues as to dilution of ownership and distance from those who may otherwise have contractual liability.

The Grenfell and Lacrosse apartment fires in particular have focussed attention of the use of this material.

The legislative response varies between states, creating a patchwork landscape for those with assets or risks located around the country. It is also continuing to evolve, as governments grapple with the issues presented and the extent of exposure, as the audit taskforces of each state and territory continue their work.

Key responsibilities

VIC

• imposing a ban on the use of ACP with a core comprised of greater than 30% polyethylene, or the use of expanded polystyrene (EPS) products in external wall systems; and the introduction of cladding rectification agreements (CRAs), giving owners and owners corporations access to affordable loans to finance the rectification of non-compliant cladding. The loans will be obtained via the municipal council and repaid as rates over a minimum ten year period.

NSW

• the imposition of a building product use ban on ACP with a core comprised of greater than 30% polyethylene by mass, with the prospect of authorities issuing affected building notices and building product rectification orders, regardless of when the ACP was incorporated into the building
• the expansion of the definition of ‘major defect‘ under the Home Building Act 1989 (NSW) to include the use of a banned building product, giving beneficiaries a 6 year statutory warranty
• a registration regime requiring owners of private buildings to identify whether their buildings are likely to be affected by NCBPs and to prepare a building fire safety risk assessment.

QLD

• chain of responsibility legislation which places responsibility on each participant in the building supply chain to ensure that NCBPs are not used on building sites
• the ability to make recall orders for NCBPs even if the NCBP was used in a building in Queensland before the introduction of the legislation
• a registration regime requiring owners of private buildings to identify whether their buildings are likely to be affected by NCBPs and to prepare a building fire safety risk assessment.

TAS

• the imposition of penalties where ACP with a polyethylene core or polystyrene cladding products are used, where that product has not been accredited by the Tasmanian regulator.

Our team continues to work with asset owners and regularly speaks with industry stakeholders on the latest market and regulatory developments in this area.