On the 1st of January 2020, the Building Amendment (Cladding Rectification) Act 2019 was put into effect in Victoria. The Act has led to Owners and Owners Corporations receiving Building Rectification Notices to deal with the installation of flammable cladding. Cladding is the application of one material over another to provide a skin or layer.
What to do when receiving a Building Notice or Order
Upon receiving a Building Notice or Building Order, Owners and Owners Corporations must comply with the order and should immediately advise their builders and consultants about the Notice. There is usually a period of 30 days to respond to a Notice or Order. It is an offence to fail to comply with a Building Order within the specified time frame. Failure to comply with a Building Order could lead to prosecution and fines exceeding $400,000.
It is important for individual property owners not to assume responsibility of the Owners Corporation for complying with the Order. The Owners Corporation only has jurisdiction to comply with the order for common property.
If an unsuspecting property owner does not comply with the order, then the property owner will be in breach of the order and may be prosecuted. This problem is particularly critical in the case of absentee landlords. If a tenant is served with an order, it is important that the absentee landlord is notified immediately and takes appropriate actions to comply.
Appealing a Building Order
An Owner and/or Owners Corporation can challenge the Building Notice or Order by appealing to the Building Appeals Board. This application must be made with 30 days of a building notice or order being served.
Rectification costs – who is responsible?
The Victorian Building Authority (VBA) attempted to make builders accountable for the cost of rectifying combustible cladding. In the Supreme Court decision of LU Simon Builders v VBA in 2017 the court ruled that the VBA did not have the power to order LU Simon to rectify combustible cladding on six of the apartment towers they had constructed since 2008.
The implications of this case confirm that the VBA cannot retrospectively force builders to fix combustible cladding on buildings once the building is completed.
In this sense, the Supreme Court has left building owners to fend for themselves. This is of little comfort to owners of affected apartments who, if ordered by their local council to fix the problem, will have to bear the rectification costs themselves. With the help of a construction law expert, owners can attempt to recover such losses through legal action against the builders and others involved in the design and construction of the building.
Strategy for minimising the damage
Once a Building Notice or Order has been served, Owners and Owners Corporations should advise builders and all consultants including fire engineers, building surveyors and architects. A team of experts needs to be appointed, which may include a fire engineer to conduct an inspection, as well as a construction lawyer who is well experienced in the workings of the Building Act 1993.
Legal action can be taken against the builder and/or designer for up to ten years from the Occupancy Permit, so it is important to act quickly if your building is approaching the 10-year mark. In the 2019 decision involving the Lacrosse Fire, VCAT awarded substantial damages to the Owners Corporation against a builder for flammable cladding. In that case, the builder was able to seek substantial contribution to the claim from the fire engineer, building surveyor and architect.
Owners and Owners Corporations may also have the right to claim funding from the State Government for cladding rectification through Cladding Safety Victoria.
Time limits apply to all claims so if you have received a Building Notice or Order in relation to cladding, you should speak to our team at Oldham Construction Lawyers immediately for urgent advice.
If you require legal advice please feel free to contact Daniel Oldham on (03) 9640 0002, or via email firstname.lastname@example.org