Apartment owners across New South Wales will be able to sleep a little more soundly after the state government announced a new financial package to help assist at-risk buildings to remove and replace their flammable cladding.
The initiative, which was unveiled in November’s state budget, will see apartment owners forced to replace flammable cladding on high-risk buildings given access to interest-free loans to remedy the situation.
The government will pay the interest bill – capped at $930 million – for loans taken out over the next three years by eligible building owners.
Dubbed Project Remediate, the project also includes $139 million to establish and offer technical support to owners for the remediation of at-risk buildings.
Some types of cladding, made from aluminium composite panels (also called ACPs) and other metal composite materials, have been recognised as posing increased fire safety risk if they are selected or installed incorrectly.
The dangers of flammable cladding first came to light following the fire at the Lacrosse Building in Melbourne in 2014 and London’s Grenfell fire in 2017, the latter of which claimed the lives of 72 people.
Soon after the NSW Government began implementing a response to the disaster, part of which included the establishment of an inter-agency Fire Safety and External Wall Cladding Taskforce (the Taskforce).
The Taskforce’s primary focus was to identify buildings with potentially combustible cladding and support local councils to address the use of non-compliant cladding materials. As of last month, 185,000 building records had been audited and to date 4,127 buildings inspected.
In carrying out its inspections, the level of risk was determined by a number of factors including the total coverage of the cladding concerned, its vertical coverage, its positioning around balconies, windows or doors, as well as the types of building and the way it is used.
The interest-free loans announced in the state government budget will apply only to about 225 buildings identified as high risk. The government has estimated the average cost to remove cladding from those at $4 million each.
Better Regulations and Innovation Minister Kevin Anderson was quoted as saying that without the government’s assistance, owners would have had to resort to commercial loans and face interest rates of up to 10 per cent.
The announcement has been welcomed by Strata Communities Australia (SCA) NSW branch, which noted that when it had crunched the numbers on the cost of flammable cladding 12 months ago, it had arrived at a figure of $1 billion.
“This is what we called on the government to provide and we are pleased that the government has delivered on this.
“Despite the time it took for the government to announce their support, ultimately, we believe the initiative is well planned, well-resourced and expertly consulted; giving building owners and owners corporations a tangible commitment to helping fast-track the removal of unsafe cladding.”
Building owners and owners corporations will be able to make applications for the interest-free loans in March 2021, after the government finalises a financial loan provider, with the work to remove cladding expected to begin in June 2021.
Further details on the initiative will be released in December, Smarter Communities will share updates as they come to hand.
To discuss your property’s strata management needs or receive a FREE management proposal contact our friendly team. We also offer more helpful resources and community living news in our FREE newsletter.
