Victorians foot $600m bill to remove combustible cladding

A handful of cladding “cowboys” are to blame for more than 200 at-risk buildings across Victoria, the Herald Sun understands. Now dodgy builders will be hit with new laws as the government tries to clean up the cladding crisis.

Construction cowboys will be hunted down by state investigators in a bid to claw back some of the $600 million it will cost to fix our cladding crisis.

New laws will be introduced to state parliament to fast-track legal action against dodgy builders to ensure they face justice.

The reforms could enable class actions on behalf of owners’ corporations, so individual apartment owners do not have to front court together, with authorities investigating how to make the tough new powers work retrospectively.

A major audit identified dangerous flammable cladding on more than 1000 buildings, with almost 500 of them deemed high risk and to be fixed using the new $600 million fund.

A fire in the Lacrosse Docklands tower in 2014. Picture: ABC

The Grenfell Tower blaze in London. It killed 72 people in 2017. Picture: Gurbuz Binici/Getty Images

Work will begin on the 15 most dangerous apartment blocks within months, led by a new agency, Cladding Safety Victoria, which will alert residents and owners.

The state government will foot half the bill and the building permit levy will increase to cover the rest — adding $2200 to the cost of a $610,000, two-bedroom apartment — after the federal government refused Victoria’s request to chip in.

The Herald Sun understands fewer than 20 builders are to blame for more than 200 at-risk buildings across Victoria, with investigations into some gathering speed.

Penalties for building code breaches are as high as $99,132 for individuals and $495,660 for companies.

Damage to Lacrosse Tower in Docklands after the 2014 blaze. Picture: Aaron Francis

The Neo200 apartment fire in the CBD this year. Picture: Josh Fagan

The cladding rectification program will take at least five years and could cost more than $600 million, but Premier Daniel Andrews said it was a necessary investment, pledging tough action against wrongdoers in a bid to recoup “as much money as possible”.

Mr Andrews called for a “true national partnership” to bankroll the rescue package for apartment owners and residents. Federal Treasurer Josh Frydenberg dismissed the idea, saying: “We’re not picking up the bill for what is a state ­responsibility.”

The state government will instead increase the building permit levy on about 6 per cent of properties from next year, with low-rise townhouses and homes, and any permits for work under $800,000 excluded from the tax hit.

Former Liberal premier Ted Baillieu, who led the Victorian Cladding Taskforce with former Labor deputy premier John Thwaites, called for federal involvement to help fix the insurance industry and the ­national building code.

“We’re dealing with people and people’s lives,” Mr Baillieu said. “It’s not an issue where there’s an easy fix.”

The cladding crisis ignited after a 2014 blaze at the Lacrosse complex in Docklands. The London Grenfell Tower fire in 2017 killed 72 people.

The taskforce identified numerous difficulties chasing costs from rogue builders, including “phoenix” companies disappearing once developments were finished.

“Given the challenges owners corporations and owners face in mounting litigation, it may be appropriate to require owners to transfer their legal recovery rights to the state as a condition of receiving the rectification funding,” the report said.

The number of privately-owned buildings identified with cladding, as of 11 July 2019. Picture: Cladding Safety Victoria

Planning Minister Richard Wynne will take the taskforce’s recommendations to a federal meeting of ministers, calling for a national approach to tackle the issue.

Opposition planning spokesman Tim Smith said the $600 million response was “a drop in the ocean to rectify an unknown number of buildings” and warned increasing building permit costs could increase cost-of-living pressures.

Property Council of Australia state deputy executive ­director Matthew Kandelaars criticised hiking permit costs.

“The increases which are being proposed for new projects are disproportionate and unreasonable when you consider that the buildings being targeted for rectification have previously been lawfully ­approved under the Victorian building code,” he said.

Victorian Planning Minister Richard Wynne. Picture: AAP Image/Wayne Taylor

MORE NEWS: TOUGHER LAWS TO TACKLE CLADDING CRISIS

‘CORKMAN COWBOYS’ USED CLADDING ON APARTMENTS

MORE THAN 500 BUILDINGS IDENTIFIED WITH FLAMMABLE CLADDING

The taskforce also called for talks between government and the insurance industry on a “substantial contribution” to the rectification fund.

Insurance Council of Australia spokesman Campbell Fuller said forcing insurers to contribute would “significantly increase” insurance costs.

GOVERNMENT ‘STUFFED THIS UP’

Owners of a Frankston South apartment complex have spent months living with fear and uncertainty.

Flammable cladding was identified on their homes before Christmas, and an emergency order was issued warning of a “risk to life and safety of the occupants”.

The residents were encouraged to vacate the building, and many were left confused and frustrated as they coughed up about $200,000 for temporary measures such as new alarms and fire suppression systems.

The building was deemed such a hazard that security guards were required to patrol the Frankston South property.

Craig Fitch and daughter Charli. Mr Firch owns one of the apartments in this Frankston South building. Picture: Jason Edwards

It is now set to be one of the first repaired as part of the state government’s long-awaited response to the cladding crisis.

Craig Fitch, who owns an apartment in the complex, said he was angry that state laws left owners at the mercy of a builder who had since had his licence suspended over a string of substandard developments.

“We should never have been put in this situation,” Mr Fitch said.

“The government has just stuffed this up completely. They’ve known about this for a long time.

“The builder should be made to come back and fix the building code violations.”

FLAMMABLE CLADDING: WHAT IS IT AND WHY IS IT A HOT MESS?

Cladding was a building material introduced in the early 2000s, but a series of apartment fires, including the fatal Grenfell Tower blaze, have revealed how dangerous it can be.

Consisting of two thin aluminium outer layers and a core material such as polythene, the cladding was designed to cover external walls and doorways.

Previously wood, brick or steel were used, but the material was more affordable making it popular with companies looking to cut costs.

Alarmingly, it has now been found the inner core of the cladding or similar products is highly flammable and can catch fire from something as small as a smouldering cigarette butt.

Once started a blaze can spread quickly, travelling through the building material and engulfing several floors within minutes.

In January, hundreds of residents were evacuated from the Neo200 building on Spencer St when a blaze broke out.

It took 80 firefighters to bring the blaze under control.

There have been several fires in Melbourne buildings, including the 2014 blaze at the Lacrosse complex at Docklands. No deaths have been recorded.

The worst cladding fire on record was at the Grenfell Tower in London in 2017, in which 72 people died, prompting cladding audits in multiple countries.