Uncertainty over cladding is affecting apartment sales

By Shane Scanlan

Docklands apartment owners are losing sales because of uncertainty surrounding cladding compliance.

A Watergate apartment sale recently fell through when the owner could not produce documentation saying there were no non-compliance issues.

Watergate has not been named in any City of Melbourne or Victorian Building Authority (VBA) audit, nor is there any reason to suspect it has a cladding problem.

But Barry Plant real estate agent Eugene Louey said he recently lost a sale there following a routine building inspection.

“The purchaser’s builder pointed out a small amount of cladding on the exterior of the building and wanted reassurance that it was okay,” Mr Louey said.

“Despite the best efforts of the owner and myself, we couldn’t come up with any documentation and we lost the sale as a result.”

Mr Louey said he and the owner tried desperately to get some assurance from the council and the VBA but struck a bureaucratic tangle of dead-ends. He said no one was able to help.

“Considering what is happening in this space, it’s reasonable that prospective buyers will want reassurance, but it seems the system is not geared up to help,” he said.

He said the lesson was for owners’ corporations (OC) to commission their own compliance reports for their buildings.

Watergate OC chair Barbara Francis said she was aware of the issue but, it was also struggling to commission such a report.

“We’ve been trying to find a solution to this for some time,” she said. “But, every time we seem to be making some progress, we arrive back at square one.”

“We’ve tried very hard, but have struck a number of problems because the building is more than 10 years old and records no longer exist,” she said.

She said the OC was currently getting some cladding samples tested by the CSIRO and had a specialist consultant standing by to take over when the results were known.

Lendlease Victoria Harbour project manager Edward McAuliffe told Docklands News it was able to supply the relevant information to all Victoria Harbour OCs.

In other cladding news, the state member for Melbourne, Ellen Sandell, told Docklands News last month that the government seemed determined to push the risk and costs of non-compliant cladding onto owners.

She noted that the VBA recently issued a product safety alert to builders and surveyors that flammable cladding cannot be used in residential buildings above three stories, bringing Victoria’s regulations into line with the Australian Building Standards, and some money was allocated in the state budget to increase compliance inspections.

“But all this doesn’t help the owners who are now having to take financial responsibility for fixing unsafe buildings and homes they bought in good faith, believing the buildings met safety regulations,” Ms Sandell said.

“Owners’ corporations are having to take on all the risk, when it was a failure of government regulation and building surveyors (which have been privatised) that caused the problem in the first place.”

“And if owners and owners’ corporations are unable to take this burden of risk or unable to afford safety improvements, then residents could be required to leave their homes.”

“Instead of pushing this risk onto residents and owners, the government should urgently step in and fix these flammable buildings, and then recoup the costs from developers or those responsible for the problem.”

“Governments have far more ability than residents or owners to accept this risk, put up the capital to fix buildings, and recoup the costs later on.”

She also called for building surveyors to be brought back under public control.