Owners told to foot the bill for combustible cladding repairs

Written by realestateview.com.au in Property News on June 10, 2021

by Euan Black – this article was first published by The New Daily 

Home owners who have been told their building is unsafe will need to fork out hundreds of thousands of dollars to remove combustible cladding from their homes after being led to believe an agency run by the state government would foot the bill.

Cladding Safety Victoria was established by the Victorian government in 2019 to oversee the removal of non-compliant cladding from residential buildings in Victoria.

It was given $600 million to cover the costs of rectification works on the state’s highest-risk buildings and has so far commenced work on 200 building projects.

But a sizeable lengthening in CSV’s initial list of high-risk buildings was not matched by an increase in government cash. And so the agency has had to take away funding from some owners in need.

Father-of-three Ben Ladkin is among this group and owns one of five townhouses in a development on Dorcas Street in South Melbourne.

His building is covered in combustible cladding and was classified as “high risk” in a September fire report seen by The New Daily.

CSV told the the owners corporation in an email in February that a funding agreement had been signed and a project manager had “begun the process of partial removal”.

But last week CSV retracted this offer, saying it would only fund an application to the Building Appeals Board (BAB) for a partial removal of the most dangerous parts of cladding, as the building was no longer deemed high enough risk to qualify for the limited state funding.

The number of buildings that CSV deems at high risk due to cladding has expanded to 695 from an initial estimate of 500, but the government has not added to the agency’s initial funding.

“What’s happened is that our building has been shuffled down the priority list so that we’re now at the bottom of the 700 buildings,” Mr Ladkin said.

The fire report carried out on his building said the cladding represented “an intolerable risk to life safety” and the City of Port Philip asked it to be removed as far back as July 2018.

“But [the CSV] says that our building, compared to say, a 50-storey high rise, is not as risky because we’ve got access to the street, and so in the event of a fire we can probably get out,” Mr Ladkin said.

“So that leaves us footing the bill for the rectification works.”

The Victorian government set up Cladding Safety Victoria in July 2019.

‘We’re in limbo’

Mr Ladkin said the five owners were given a quote of $600,000 for a partial removal of the building’s cladding.

Emails seen by The New Daily show that some insurers have already hiked their premiums by 108 per cent and will consider ending policies next year if the owners have made insufficient progress on removing the flammable materials.

Mr Ladkin said it was unfair that owners were being asked to foot the bill when their homes were deemed to comply with regulations at the time of purchase.

He and his family wanted to move to the Bellarine Peninsula but had to put their plans on hold because the building notice on their property meant they could not rent it.

“I’ve got three boys – seven, three and eight months old – and so in the back of your mind, you’ve got that concern about safety,” Mr Ladkin said.

“But the big thing for us is that we’re just in limbo.”

Another owner who spoke to The New Daily on the condition of anonymity said he was having trouble sleeping due to the stress caused by living in an unsafe building.

He said the Victorian government should put themselves “in our shoes and start acting like human beings on this”.

“The government is there to protect us from this kind of a situation,” he said.

“They dropped the ball by not keeping an eye on the industry in the first place. And now they’re dropping the ball on fixing the problem.”

A spokesperson for the Victorian government said it had “invested more into addressing cladding than any other jurisdiction in Australia and potentially the world”.

“The Cladding Rectification program was funded to rectify the highest-risk buildings, and this is what it is doing,” the spokesperson said.

“As part of major reforms to the building sector, the government has also appointed an expert panel, which will provide recommendations to the government to reform building approval process and better protect consumers.”