27 August 2019

On 17 July 2019, the Victorian State Government announced the establishment of Cladding Safety Victoria (CSV) and a government funded scheme of $600 million. The aim of CSV is to “support owners and occupiers to ensure Victorian buildings with combustible cladding are rectified and deemed safe to occupy in the long term.”

The Victorian Building Authority (VBA) is continuing to conduct a statewide cladding audit to identify buildings with combustible cladding which risk public safety. The eligibility for CSV assistance is contingent on the building being assessed by the VBA as a high risk building. The audit process involves each building:
1. Undergoing a site inspection to determine if combustible cladding is present;
2. Being assessed by an expert panel member to review the risks identified during the site inspection;
3. The making of recommendations to the local council Municipal Building Surveyors on the required action; and
4. Identifying whether emergency works are required to reduce any immediate risks.

If the building is determined to be high risk, it will be referred to CSV. Firstly, CSV will write to the owners corporation manager and invite the owners to meet and appoint a project manager. Secondly, the owners and a project manager will plan the rectification works. In planning the works, the following will be considered:
1. Rectification options;
2. Appointment of fire engineer and/ or building surveyor as required; and
3. Guidance regarding entering agreements.

Thirdly, once the rectification solution has been identified and agreed to by the owners, the solution will be lodged with the Building Appeals Board (BAB) for approval. Thereafter following approval by the BAB, CSV will assess the rectification costs and make a determination regarding the amount of funding available for the rectification works.

The owners will engage the builder and CSV will support the owner through the contract negotiations. The project manager will develop work schedules to minimise disruption during the rectification works.

Fourthly, the appointed building surveyor will issue a building permit for commencement of the works.

When the works are completed, there is a final inspection and meeting with the VBA. The owners will receive:
1. Written confirmation of the finalisation of works; and
2. A handover of final compliance documentation.

It is noteworthy that each building will be assessed and rectification solutions will vary. In some instances, full removal of cladding will not be required and additional fire sprinklers will meet safety and compliance requirements.

The rectification priority will be afforded based on level of risk (ie. the highest risk buildings will be rectified first).

If the building is determined to be moderate or low risk and not eligible for funding through CSV, Cladding Rectification Agreements (CRA) may be available to support the owners. These agreements are between the owner or owners corporation, the council and a financial institution. It is envisaged that the financial institution would loan the funds to the owner or owners corporation for the works and the loan would be repaid through the council rates system.

The Victorian State Government has specified works which can be funded through a CRA.

Further information is available on these websites.

Karen Wong
Claims Manager/Focus Underwriting