The issue of non-compliant building cladding is still on the forefront of building owner’s minds. As time progresses, original questions about the extent of the volume of properties at risk and what are suitable alternate products remains largely unclear.
Cladding has been a popular method of wall cladding for its lightweight, metallic surface which is very cost effective to manufacture and install. It has been utilised in construction for decades. Cladding is usually easy to spot due to its shiny smooth surface. A core sample for testing and a review of the product datasheet is typically required to determine the actual product which has been installed by builders. Builders may also have used a mixture of different types of cladding within the same building.
There has been numerous fires and deaths around the world due to the Aluminium Composite Panel (ACP) cladding product being combustible during a fire. A popular type of product is manufactured with a polyethylene core, which is essentially a plastic sheet sandwiched between two pieces of aluminium sheet.
|Source: https://Wikipedia.org||Source: http://smh.com.au|
With cladding based fires around the world and with the recent tragedy of the Grenfell Tower fire in England, there has been a refocusing on the risks that ACP places on residents in apartment buildings.
At Strata Choice, we estimate to have 186 properties that either have or may have some form of wall cladding installed.
What Does Cladding Look Like?
Cladding can be recognised by large smooth metallic looking sheets that are attached to a building’s exterior or interior wall.
Building Insurance Implications
The Strata Schemes Management Act outlines specific requirements for the Owners Corporation’s obligations of building insurance coverage. Building insurers are now specifically requesting details on whether the insured building has cladding installed and if so, what percentage of the building is covered. If the building does have cladding, the insurers are requesting details in the form of an engineering report and where required results of any testing. Where cladding is combustible, a plan and timeline for its replacement. Insurers are developing the way in which they assess risks and premiums where aluminium cladding is involved. Ideally, when dealing with insurers the scheme will be seeking to demonstrate that their scheme is a low risk or if not, that it is taking steps to make the building a low risk.
We have seen instances where insurance premiums have increased by multiples of 2, 3 or 4 times.
BAC Insurance Brokers have outlined insurance concerns contained in their letter accessible here.
Building Defect Warranties
As cladding is not considered a ‘structural’ part of the building, any claim to a builder for defective or non-compliance is considered a ‘general’ defect. This means that for many building constructed under a contract entered into after 1 February 2012 their statutory warranty period is 2 years. Further liability and alternate recourse may be remotely possible if the claim is made after this period, however specific legal advice would be required to be obtained for each individual case.
Information on building defects in general can be obtained in the Bannermans Lawyers article found here.
The government has published the Senate’s Economics References Committee report on non-conforming building products. You can read the report here.
The NSW government has also set up an inter-agency Fire Safety and External Wall Cladding Taskforce that was established in June this year to develop and implement a coordinated, whole of government policy response to the Grenfell Tower fire in London. They have published a fact sheet here.
Where the taskforce has identified that a building may have cladding, it is writing to the building owners to act. If your building is such a building consider the approach explained in the Bannermans Lawyers – “Dealing with the NSW Cladding Taskforce request article”.
The Minister for Better Regulation, Matt Kean, released the government’s 10 point plan:
- A comprehensive building product safety scheme that would prevent the use of dangerous products on buildings;
- Identifying buildings that might have aluminium or other cladding;
- Writing to the building / strata managers or owners of those buildings to encourage them to inspect the cladding and installation of cladding, if it exists;
- NSW Fire and Rescue visiting all buildings on the list, as part of a fire safety education program. This will allow them to gather information they need to prepare for a potential fire at that building, and provide additional information to building owners;
- Creating a new fire safety declaration that will require high rise residential buildings to inform state and local governments as well as NSW Fire and Rescue if their building has cladding on it;
- Expediting reforms to toughen up the regulation of building certifiers;
- Reforms to create an industry based accreditation, that will ensure only skilled and experienced people can do fire safety inspections;
- Establishing a whole of government taskforce that will coordinate and roll out the reforms;
- Instructing all government departments to audit their buildings and determine if they have aluminium cladding, with an initial focus on social housing;
- Writing to local councils to follow up on correspondence they received from the state government, after Melbourne’s Lacrosse Tower fire, in 2016.
Many properties in our portfolio have already undergone testing and planning for remedial work to have cladding assessed and replaced. Each client will be contacted by our office to determine if cladding exists on the building and if so, an action plan which is applicable to each type of situation will be implemented. There is no ‘one size fits all’ approach on cladding that is installed on a building, as removal is not always the required outcome, a specialist engineer is required to consider the product type, extent of the use of the cladding on the building and the buildings fire safety measures.
NSW Government will also pass regulation placing a requirement on building owners to report if cladding exists on their building and a cladding register will be maintained by Government.
Strata Choice held a free seminar that included a panel of experts and representatives from various fields of expertise. View the panel session video with speakers from:
- NSW Government – Fair Trading
- AED Group Engineers
- SPMA Engineers
- BAC Insurance Brokers
- Bannermans Lawyers
- 4 Corners TV Story “Combustible: The dangerous legacy of failed regulation in the building industry”
- Bannermans Lawyers – “Dealing with the NSW Cladding Taskforce request article”
- BAC Insurance Brokers letter on building insurance impacts
- NSW Government – Fair Trading fire safety and external wall cladding web page
- NSW Government – Planning & Environment – External walls and cladding circular
Disclaimer: The articles and comments in this publication are necessarily brief and general in nature and are not intended to be relied upon by any reader in dealing with a particular problem. Whist all care has been taken in the preparation of this publication the writer and the producers accept no liability for any omission or misguidance.