Building Cladding Safety

(Private Members Statement, 22 August 2019, Legislative Assembly, NSW Parliament)

Recent media attention on the evacuation of apartment buildings found to be structurally unsound has highlighted the lack of protection for owners and residents whose homes are impacted by defects. The defects crisis extends to the discovery that over 600 buildings in this State are clad in flammable materials, similar to those that led to destructive fires in Melbourne's Lacrosse and Neo200 buildings and London's Grenfell Tower, which killed 72 people. The real number is unknown because the Cladding Taskforce has not released its list of high-risk buildings. Councils have only received sections of the list in addition to other lists from Fair Trading, planning and Fire and Rescue, as well as owners self-reporting.

Constituents from affected buildings say they are trapped in a financial and administrative nightmare trying to fix their homes and make them safe. They report a lack of government support in navigating what is a complex, costly and risky process. There is no single agency or strategy to ensure flammable cladding is removed from high-rise buildings. After owners corporations are issued with development control orders with strict requirements and time frames they bear full responsibility to make their buildings safe, with no financial or practical assistance. Owners report feeling abandoned by government despite being the least responsible party for the problem—they did not design, approve or build their homes or accredit the products used. Owners corporations already have unlimited liability and strict legal duties to repair and maintain their buildings and they now face potential fines.

Owners tell me that compliance is virtually impossible because there is no consistency among government agencies over products. An example is aluminium cladding. The Government accepts it as compliant because it is not combustible, but NSW Fire and Rescue does not because it melts above certain temperatures and drops large molten masses. Not all products are suitable for all buildings. Owners of one building tell me that they sought advice from a number of experts and only one solution complied with requirements to be "incombustible", but it was unclear whether the material would comply with "debris" requirements.

Furthermore, there is real concern that some products approved now will be banned in the future. For example, it is rumoured that waffle cladding will be banned soon, and in February the Australian Institute of Building Surveyors issued new advice on nine types of cladding and their compliance status remains unclear. It would be devastating if owners corporations were to install materials at great cost and disruption, only to later discover that their homes do not comply and remain unsafe. Owners say they should not be subject to compliance orders until there is a coordinated strategy in place and clear guidance on what products are compliant.

Insurers have now withdrawn coverage to certifiers inspecting and signing off on replacement cladding because the liability risk is too high, leaving owners even more vulnerable. Local Government NSW shares concern about the lack of consistency and has called for guidance and protocols in assessment and mitigation of risks. The Owners Corporation Network has held seminars and has established a Flammable Cladding Action Group of apartment owners to share information, work together and feel supported in order to fill the gap left by government. It is an overwhelmingly distressing situation for owners who are raising massive special levies to fix cladding, other defects and general building maintenance while their insurance costs have risen.

Recent changes to statutory warranties that define combustible cladding as a major defect provide little relief. Homes built more than six years ago are excluded and it is unclear how the courts will treat those built within the time frame because cladding was compliant and not a defect at the time of build. There is no precedent clarifying the matter, making court action risky. The Government must recognise that if it does not support owners corporations they will struggle to make their buildings safe, at great risk to thousands of residents across the State. I am concerned that there is no way to ensure that buildings with flammable cladding do not have short-term and holiday visitors. Short-term letting increases the fire safety risks, yet affected owners corporations cannot ban them and the Government has no way to know whether short-term letting is happening in these buildings.

I welcome the Building Commissioner's comments that his recommendations to government will include the option of direct support to owners. I acknowledge the Minister's commitment to work towards an outcome and I call on the Government to follow Victoria's lead and provide owners with support, including financial support such as interest-free or low-interest loans, as part of a wider disaster package to help apartment owners suffering financial hardship as a result of defects.