23 September 2020
The Cladding Safety Victoria Bill 2020 (CSV Bill) grants owners of buildings affected by combustible cladding a two-year extension to the usual 10-year limitation period to commence building actions.
The Bill was introduced to the Lower House on 3 September 2020 and had its ‘second reading’ the following day. We anticipate the CSV Bill will be passed reasonably quickly and its provisions will come into effect later this year.
Extending the limitation period for cladding building actions
The Building Act 1993 (Vic) currently provides for a 10-year limitation period to commence building actions. Typically, that 10-year period runs from when the occupancy permit was issued. The CSV Bill extends this limitation period by two years for ‘cladding building actions’, allowing such actions to be brought 12 years after the date of issue of an occupancy permit.
Importantly, the extended limitation period will only apply to buildings where the limitation period expired between 16 July 2019 (the date when the Victorian Government announced the $600 million cladding rectification fund, which is administered by Cladding Safety Victoria) and 12 months after the CSV Bill becomes law.
Establishing an independent Cladding Safety Victoria (CSV)
CSV currently operates as a division of the Victorian Building Authority (VBA). Another purpose of the CSV Bill is to establish CSV as an independent body. CSV will remain responsible for administering and regulating the $600 million Victorian cladding rectification program, but will now do so at arm’s length from the VBA.
The two-year extension will come as a relief to many building owners and owners corporations, allowing them to make claims where previously they would have been ‘time-barred’.
The extension will also help the State of Victoria to recoup costs incurred under the cladding rectification program, utilising its recently legislated subrogation rights under the Building Act (which have also been amended in the CSV Bill).
Notably, however, the extension will be of no benefit to those building owners whose limitation period expired within the last two years, but before 16 July 2019. That is, buildings owners whose limitation period expired around October 2018 to 15 July 2019. The decision to grant a two-year extension which does not to apply to approximately one-third of that period seems somewhat arbitrary and it will be interesting to see if any change is made as the CSV Bill progresses to the Upper House.
Authors: Lachlan Ingram & Stefania Silvestro
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