Combustible Cladding Seminars - what did we learn?

Tuesday November 6th, 2018

With new legislation coming into effect from 1 October 2018, we hosted community education seminars across the state, educating stakeholders on the obligations and timelines to achieve compliance with the 3 stage regulations.

From attendee feedback, we found that a majority of properties will only require compliance with the initial stage 1 requirements which is due by 29 March 2019. Stage 1 compliance is required even when it is obvious that the building does not have Aluminum Composite Cladding (ACP) because the QLD Government does not know which buildings have ACP and have drafted legislation requiring all building owners within the “Compliance Zone” declare the building materials used for their records. These records submitted will determine additional stage 2 and or 3 compliance for those buildings at risk and any building within the “Compliance Zone” that have not responded at all, likely to result in fines as per legislation now in place.

Legal expert Frank Higginson of Hynes Legal who co presented at majority of the seminars has written about the test to determine if your building is within the “Compliance Zone” stipulated in the legislation and all 3 reporting stages in a prior article that can found here.

Following the presentation by Solutions in Engineering CEO Ross Daley, takeaway points spoken about most by the audience were:

Building Owner Declaration

The legislation did not consider who the building owner is for a Body Corporate, which is all lot owners. The legislation requires that the building owner declare under the Oaths Act of 1867 that the information submitted in the stage 1 checklist is true and correct. To satisfy this aspect, the Committee is required to appoint an agent or nominee to complete the declaration and checklist on the building owner’s behalf. If you are an Archer’s client, your building has already been identified and the agent appointment process facilitated.

Building Insurance Renewal

Insurers have already been seeking details of building construction materials and specifically whether or not there is any ACP present including what type is it. Marsh Advantage Insurance who are licensed insurance brokers spoke on this aspect confirming that the stage 1 checklist will now be the primary focus of insurers when seeking confirmation of construction materials if available. If the insurer is uncertain of the materials, the risk and associated premium will rise. Again all Archer’s clients have reported material types upon policy renewal to the appointed insurance broker.

Purchaser Due Diligence

A search of Body Corporate records is standard due diligence when a property is to be purchased. Search agents and lenders will now likely be seeking copies of the stage 1 checklist as a minimum to identify the presence of ACP. The outcome of the checklist is to provide certainty of the likelihood of future outgoings and associated decline in property value if the building requires a special levy due to ACP replacement. Archers are adding the checklist and declaration to client records as these are being received.

Fire Safety Compliance

There is no substitute for up to date building fire safety compliance and associated procedures. The reason ACP has become a major concern is that it can be highly combustible and greatly reduces the time to evacuate a building on fire. If your building does not have up to date fire safety maintenance and procedures, you will not only risk hefty fines, but also the loss of lives of those who cannot escape the burning building as seen in the UK Grenfell tragedy. Ignorance or cost of legislated fire compliance is not a suitable reason for a coroner’s court not to recommend incarceration of the building owners responsible for an avoidable tragedy.

Summary

Although we don’t always agree with the methods adopted by the legislators, as citizens of this state we are required to comply with the laws it adopts. Even if it is obvious your building does not have ACP, the law requires that you declare this using the prescribed method. Failure to comply will likely lead to additional insurance costs and difficulties with purchases and sales due to the uncertainty of the risk associated with the property.

This article was contribute by Grant Mifsud – Partner, Archers the Strata Professionals.