If you don\u2019t know whether the cladding on your building is combustible (or to use the less scary word \u2013 non-conforming), you are soon going to be forced to find out.<\/p>\n
The issue over what cladding has been used on buildings crystallised after the\u00a0Grenfell Tower<\/a>\u00a0fire in the UK in 2017.\u00a0 Australia\u2019s equivalent (without the horrific loss of life in Grenfell) was the\u00a0Lacrosse Tower<\/a>\u00a0fire in Melbourne in 2014. The ABC\u2019s Four Corners covered the issue in this\u00a0excellent episode<\/a>.<\/p>\n Since then the wheels of respective state governments have turned very slowly.\u00a0 Victoria has their\u00a0cladding task force<\/a>\u00a0and has now come up with a\u00a0rectification solution<\/a>\u00a0that will allow lot owners in bodies corporate to pay back the cost of addressing the defective cladding through their rates.<\/p>\n Other states have equivalent bodies but no solutions yet.<\/p>\n The Queensland approach has been to create the\u00a0Non-Conforming Building Products audit taskforce<\/a>\u00a0which led to the government\u00a0addressing concerns<\/a>\u00a0with all of their own buildings.<\/p>\n Now it is the turn of the public at large.<\/p>\n It\u2019s a seemingly innocuous title, but it has some real kick.\u00a0 The new regulation is:<\/p>\n Building and Other Legislation (Cladding) Amendment Regulation 2018<\/a><\/em><\/i><\/p>\n And what it means for bodies corporate when it commences on 1 October 2018 is this:<\/p>\n If your building:<\/p>\n then the building is caught by the new regulation.<\/p>\n If your building is one of those in the compliance zone you need to register and complete an online checklist via the QBCC that will run you through whether the building is likely to be one of those with non-conforming cladding.\u00a0 Every building will have until 29 March 2019 to complete this.<\/p>\n If you don\u2019t complete it, there is a maximum fine of\u00a020 penalty units<\/a>\u00a0($2,611).<\/p>\n If there is no issue, then all is well and you just need to keep that certification. If not, you are onto stage two.<\/p>\n And no \u2013 we don\u2019t know what the checklist will include yet or even a link to where you will be able to find it, but when we do we will let you know.<\/p>\n If your building is one that may have non-conforming cladding you have until 29 May 2019 to go back to the QBCC with a statement from a building industry professional about whether the cladding on your building is non-conforming.<\/p>\n If you know the cladding on your building is non-conforming you can skip the completion of the report, notify the QBCC you have non-conforming cladding and go to straight to stage three.<\/p>\n There is only two months between the last date to register and the date on which this first assessment is required. \u00a0We suspect it will not pay to be tardy in getting started, as there are fines for missing the deadlines.<\/p>\n There maximum fine for missing this date is the same as that for missing stage one.<\/p>\n If you have non-conforming cladding then you must have a qualified fire engineer complete a fire risk assessment about the safety of the building. That assessment will determine whether the scheme as it is will essentially remain safe or whether rectification works are necessary.<\/p>\n Every building must give the name of their fire engineer to the QBCC by 27 August 2019 and have the final report to the QBCC by 3 May 2021.\u00a0 That is less than three years away.<\/p>\n If you have not nominated your fire engineer or completed the risk assessment by the required dates the fines gear up to a maximum of 50 and 165 penalty units respectively ($6,527.50 and $21,540.75).<\/p>\n If the building has non-conforming cladding then:<\/p>\n This is where the fun begins.\u00a0 Not.<\/p>\n We see the following compliance headaches with all of this, but these are just the immediate issues.<\/p>\n Everyone will be out there trying to make bodies corporate aware of their obligations.\u00a0 But some will simply ignore them.\u00a0 Some strata managers may also simply ignore them.\u00a0 It is ultimately the role of the committee to get this done, but no doubt fingers will be pointed at strata managers if it isn\u2019t.<\/p>\n Strata managers need to be vigilant to make sure they have covered their backsides by addressing this with every body corporate they manage.\u00a0 It may not be pretty when the government starts rounding up those buildings that have not participated in stage one by the required date.<\/p>\n It would also seem that there will need to be some form of evidence (termed \u2018a proof of agency\u2019) produced to the QBCC about the ability of anyone to complete the document on behalf of the body corporate.\u00a0 What that looks like is also yet to be determined.<\/p>\n There are only two months from the last date for registration to the time to return the building industry professional report.<\/p>\n If bodies corporate leave it to the last minute we suspect there won\u2019t be enough experts to go around.\u00a0 Get started and get started early, because when you allow for the Australian holiday season (Melbourne Cup Day through to Australia Day) there is also another three months that disappears very quickly during that registration period.<\/p>\n If a building has non-conforming cladding, notifying new owners is easy.\u00a0 They appear on the roll, and (hopefully) the strata manager\u2019s software programs then deal with the notification.<\/p>\n Tenants will be a lot harder.\u00a0 For those with onsite management or professional property managers, it may be okay as they should have systems that will deal with it. Communicating what needs to be done with property managers will be important.<\/p>\n For people who self-manage or use a property manager who does not know what they are doing, the reality is tenants may not be told.\u00a0 Our immediate interpretation is that holiday \/ corporate tenants probably do not need to be told (as they might not be \u2018leasehold interest holders\u2019), but time will tell.<\/p>\n The uncertainty.<\/p>\n These are all guesses, but try these as flow\u00a0on effects:<\/p>\n It wouldn\u2019t surprise us if there was some change to the disclosure regime to specifically address this issue.\u00a0 After all, the statutory disclosure\u00a0at the moment includes who the body corporate secretary is. Whether the building has non-conforming cladding is probably a tad more important.<\/p>\n The Lacrosse Tower owners are still fighting about who wears\u00a0what cost five<\/a>\u00a0years after their fire.\u00a0 The statutory position is that if rectification is required, then the body corporate must do it.\u00a0 It may well have a right to recover those costs from parties involved in the construction process, but that right is independent of the immediate obligation to sort the issue out.\u00a0 We will leave limitation periods aside for the moment too.<\/p>\n This means owners are going to have to pay special levies, or bodies corporate borrow money, to bring their building back to having conforming cladding.\u00a0 Bodies corporate will not be allowed to delay that while they try to recover the costs from a third party.<\/p>\n And for you faithful readers who have come this far, this is the biggest issue we see for property sellers.<\/p>\n Just because cladding is non-conforming might not mean it needs to be removed.\u00a0 The other fire safety mechanisms may cover any risk appropriately.\u00a0 Having said that, the non-conforming cladding could still very well be considered a defect in common property (although we are still debating that internally).\u00a0 There are arguments for and against this, but if it is not a defect, why is there the need for the conspicuous sign in the building about it?<\/p>\n Section 223<\/a>\u00a0of the\u00a0Body Corporate and Community Management Act 1997<\/em><\/i>\u00a0imposes an obligation on sellers to disclose to buyers latent or patent defects in common property that the seller is aware of or \u2018ought<\/em><\/i>\u2019 to be aware of.<\/p>\n Sellers \u2018ought<\/em><\/i>\u2019 to be aware of issues identified in the body corporate minutes.\u00a0 Committee members who are actively involved in the decision-making process around this have nowhere to hide under any definition.<\/p>\n If buildings have non-conforming cladding, which is not disclosed in the sale contract by a seller, and there are subsequent rectification works required along with the special levies or borrowings, we can see a raft of litigation about the lack of that disclosure against sellers, sales agents and those who prepared contracts for sale (such as lawyers).<\/p>\n We like providing solutions, but with this one there is a long way to go before the air clears.\u00a0 We will keep you updated as this one evolves.<\/p>\n","protected":false},"excerpt":{"rendered":" If you don\u2019t know whether the cladding on your building is combustible (or to use the less scary word \u2013 non-conforming), you are soon going to be forced to find out. The issue over what cladding has been used on buildings crystallised after the\u00a0Grenfell Tower\u00a0fire in the UK in 2017.\u00a0 Australia\u2019s equivalent (without the horrific loss of life in Grenfell) was the\u00a0Lacrosse Tower\u00a0fire in Melbourne in 2014. The ABC\u2019s Four Corners covered the issue in this\u00a0excellent episode. Since then the wheels of respective state governments have turned very slowly.\u00a0 Victoria has their\u00a0cladding task force\u00a0and has now come up with a\u00a0rectification solution\u00a0that will allow lot ownersRead More →<\/a><\/p>\n","protected":false},"author":1074,"featured_media":534,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mbp_gutenberg_autopost":false},"categories":[8,19,2],"tags":[],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/971"}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1074"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=971"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/971\/revisions"}],"predecessor-version":[{"id":972,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/971\/revisions\/972"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/534"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The compliance zone<\/h3>\n
\n
Stage 1 \u2013 registration<\/h3>\n
Stage 2 \u2013 building industry professional<\/h3>\n
Stage three \u2013 fire risk assessment<\/h3>\n
After assessment<\/h3>\n
\n
The crystal ball<\/h3>\n
Ignorance of the need to comply<\/h3>\n
Stage two timing<\/h3>\n
Fire risk assessment notifications<\/h3>\n
The bigger issues<\/h3>\n
\n
Rectification costs<\/h3>\n
The statutory obligation to disclose defects<\/h3>\n