New combustible cladding laws have come into effect in Queensland, imposing new obligations on property owners and bodies corporate.
As a response to devastating fires which occurred at the Grenfell Building in London and THE Lacrosse Building in Melbourne’s Docklands area, on 1 October 2018, the Queensland Government introduced new legislation for buildings with combustible cladding.
According to Hickey Lawyers partner, Joe Welch, while the new legislation does not force anyone to remove their cladding or change their building, there are several potential impacts and legal ramifications.
“The legislation requires building owners and bodies corporate of privately-owned, multi-storey buildings built or modified after 1 January 1994 to report it to the Queensland Building and Construction Commission (QBCC) via the Safer Buildings combustible cladding checklist,” Mr Welch said.
Speaking at the Smart Strata Community Education Seminar, Mr Welch joined the CEO of Solutions and Engineering, Ross Daley, in addressing concerns of owners and committee members of Gold Coast bodies corporate about combustible cladding on their buildings and the introduction of these new laws.
As identified at the seminar, owners and bodies corporate have numerous new obligations under the new legislation, including the legal requirement to complete combustible cladding checklists.
- Part 1 of that checklist is to be completed online by 29 March 2019.
- Part 2 will be required to be completed if there may be combustible cladding in the building and that must be completed through a building industry professional before 29 May 2019.
- If there is combustible cladding, then a combustible checklist Part 3A needs to be completed by 27 August 2019 by a fire engineer.
- Depending on whether the combustible cladding will be a problem for the building then a further checklist may be required to be completed 3 May 2021.
Mr Welsh further said that there a number of big issues for people to address.
“If you own a building with combustible cladding, you may be required to tell your insurer or it may void your insurance. If you do tell your insurer that you have cladding, then your insurance premium may increase dramatically,” he said.
“It won’t take long for financiers to realise how important this issue has become because it can significantly reduce the value of a building. So, be prepared to make disclosure to your financier as well,” cautioned Mr Welch.
“It is not clear whether using combustible cladding for a building is a defect by the builder, so your rights may be limited against your builder depending on when they built and whether or not they knew the cladding was combustible.”
“If you are buying a building or a unit that is in a building that has combustible cladding, then your body corporate levies may increase dramatically because the insurance premium may increase dramatically. If the body corporate has to pay for the replacement of the cladding, then the body corporate levies may increase dramatically. This could reduce the value of your apartment,” he said.
“If you are a seller and you know your building has combustible cladding and you will have to pay a significant amount of money to have it replaced, then under the standard form of REIQ contract and the Body Corporate and Community Management Act, you may have an obligation to disclose that to a buyer,” he added.
QBCC Commissioner Brett Bassett also said it was important that building owners and bodies corporate moved quickly to complete the checklist.
“We anticipate that most buildings will be safe, however, all private buildings within scope need to be cleared so that we know for sure,” Mr Bassett said.
“All Queenslanders want peace of mind about the safety of their buildings.”
“Buildings affected by non-conforming cladding can potentially be a real risk and we’re moving quickly to address that risk,” he commented.
Fortunately, Mr Welch believes only a small number of residential strata title buildings will have combustible cladding problems, leaving the issue more prevalent for commercial buildings.
Image of Hickey Lawyers partner, Joe Welch (supplied).
“Aluminium cladding wasn’t used a lot by residential builders as it was a more expensive material. It was favoured by commercial and government buildings, such as office blocks, because while it was more expensive to install, it saved a significant amount of money in the long term as it didn’t require repainting as often, with minimal maintenance costs. It also contributed to the aesthetic appeal of commercial office buildings,” Mr Welch said.
“Problems with cladding will be a significant issue for commercial building owners, who should initially contact a licensed builder or a fire engineer to address concerns with cladding, then follow up with legal advice.”
“Anyone considering buying a unit in a high rise that may have cladding, we recommend that you search the body corporate records and take advice from a lawyer to give you protection under your purchase contract. If you are buying a whole building, then we recommend that you have the building investigated for combustible cladding,” Mr Welch advises.
