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Victorian Government Cladding Scheme

Victorian Government Cladding Scheme

Published on August 1, 2018

The Victorian State Government recently announced the introduction of a scheme through the Local Government Act to provide low-cost, long-term loans to property owners to replace dangerous cladding on their properties.  This scheme raises  numerous issues in relation to the long-term consequences of the use of non-compliant and dangerous highly flammable cladding.

The Victorian government set up a Victorian Cladding Task Force last year, chaired by former Premier Ted Baillieu and former Deputy Premier John Thwaites to investigate the significant issue surrounding the use of these non-compliant materials in buildings going back to the mid 1990s. The government reports that it has audited almost 1,369 planning and building permits and has so far issued more than a hundred building orders to residents to rectify their properties as they are non-compliant.

Various law firms have indicated that they are investigating class actions in relation to costs incurred by property owners arising from the use of non-compliant and highly flammable cladding on their properties.  To date, no class action has been filed in a Victorian court and it appears unlikely that any class action would be pursued as there is no one identifiable defendant, cause of action or class of claimants that would warrant a class action being pursued.

The reality is that affected property owners continue to be at risk of being personally liable for the replacement of the non-compliant cladding.

The announcement from the government today highlights that there remains a significant problem for all parties involved: owners, developers, town planners, insurers and not least of all the government itself. While one hundred Rectification Notices have been sent to date, it is possible that many more will be sent in the future. Property owners live with the reality that they will have to spend considerable amounts of money to make their properties compliant in order for them to be sellable in the future regardless of whether a notice has been issued or not. There is also the complication that Insurers may refuse to insure these properties.

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