Federal government washing its hands of cladding issue: Strata body

A top strata management body has urged the federal government to spell out its stance on fixing the flammable cladding on buildings as it fears apartment owners could be on their own on fixing this issue which is likely to cost a huge amount of money.

The Prime Minister is being urged to reconsider his reported decision to “handball” the flammable cladding crisis onto state governments, according to a media release from Strata Community Australia, which is the leading industry body for Body Corporate and Community Title Management in Australia. It has about $1.2 trillion worth property under management.

Chief executive Erik Adriaanse said without immediate support from the federal government, thousands of apartment owners nationwide could find themselves in an insurance and financial disaster.

“We’re very concerned that owners will be left to face this issue alone, with little to no support coming from the parties responsible,” Adriaanse said today.

SCA said it was unacceptable that the federal government, based on the Prime Minister’s comments, wants to wash its hands of the issue especially as national building codes and border screening measures lie within their control.

The issue of flammable cladding was brought to light after an ABC Four Corners report detailed the volume of non-compliant flammable cladding on Australian buildings as “unquantifiable”.

Some insurance providers are reviewing how this affects their policies.

“We have already seen this issue in recent years take the shape of a multi-million dollar problem for owners in a single building, and with insurers and lenders now reviewing their position on policies and property values, there’s never been a more important time for the Federal Government to be hands on.”

The growing fear is that an “unquantifiable” number of buildings with cladding may not be able to get insurance, once identified, thus causing major problems with property valuations, and the ability of owners to get loans.

Adriaanse says by enlarge, Australia’s cladding ‘crisis’ been facilitated by a weak chain of responsibility from suppliers, to contractors, to certifiers and so on, so it is important that the federal government take responsibility on this matter.

He referred to the recent Senate report which called for a ban on such cladding. The Senate committee looking into flammable cladding in buildings in the aftermath of London’s Grenfell Tower tragedy has recommended a ban on the importation, sale and use of the aluminium panels.

“The Senate Inquiry into non-compliant building products was set up to advise the Federal Government on solutions to this widespread issue, and it beggars belief that its first recommendation, to impose an immediate ban on the importation and use of non-compliant cladding, has been passed along the line.”

“A fortnight ago, it was announced that stronger screening measures for these products at the border was not going to be pursued federally, and now that the Senate Inquiry has delivered its initial report, we’re eager to be briefed on what action will be taken by the Federal Government.”

Adriaanse says the overwhelming barrier to see the safety threat of cladding managed once identified is the associated cost, which more often than not falls to the owners.

“If one of the parties involved in the supply, installation or certification cannot be pursued by owners to fund rectifications, we will see non-compliant cladding stay on Australian buildings.”

“The cladding responsible for a 13 storey fire which broke out at Melbourne’s Lacrosse Apartments back in 2014, still resides on the exterior of the building for one sole reason, the owners cannot afford to have it removed and replaced.”

“In this instance it was $8.6 million for the cladding replacement, and we’re desperate to see other owners around the country avoid bills of this crippling nature.”

Adriaanse says it has been very positive in the last week to see national builders commit to auditing their buildings at their own cost, but it is the rectification government support must come.

“We’d like to see a commitment from the Federal Government to support owners in these situations moving forward, for the benefit of making buildings and their occupants safe.

“Be it in the form of a financial assistance package, or new laws which hold suppliers, installers, certifiers and all involved in the process accountable, we’re adamant that this issue will drag on if owners are left to pick up the tab.”