Who will pay for Lacrosse?

Questions remain over who will pay for the estimated $5 million worth of compliance works required at the Lacrosse building in Docklands.

In October, the City of Melbourne issued all 400 Lacrosse owners with building orders requiring them to replace the external cladding on their building within 350 days.

But owners say Lacrosse builder LU Simon should be held responsible for making the building compliant with Australian building standards.

Fraser Main, managing director of Lacrosse’s facilities management company, Trevor Main Group, said he has made it clear to LU Simon that owners expected compliance works to be completed at no cost to themselves.

He also confirmed owners had appealed the building orders.

Mr Main said owners were also working with City of Melbourne, the Victorian Building Authority (VBA) and LU Simon to develop a proposal that didn’t involve the complete replacement of the external cladding.

Earlier this year an MFB report found that combustible materials used in the non-compliant cladding contributed to the rapid spread of the November 25 fire at the building, which was started by a stray cigarette.

It’s estimated that the cost of replacing the cladding would be at least $10,000 to $15,000 per apartment and an overall cost of more than $5 million.

City of Melbourne held an information session for owners on October 27, allowing them to hear from municipal building surveyor Joseph Genco, VBA director Jarrod Edwards and Mr Main.

Speaking at the meeting Mr Main said it was the company’s position that owners and tenants shouldn’t pay for the compliance works.

“I’ve made it absolutely clear to LU Simon of your collective expectation, which is that they will make this building compliant at no cost to yourselves,” Mr Main said.

He said LU Simon had committed to working with Trevor Main Group.

“They want to and expect that they will be part of the solution to get the building compliant,” Mr Main said.

While there is no legal action currently being proposed, Mr Main confirmed the Lacrosse Owners’ Corporation had engaged a law firm and, if it got to that point, there was a good chance of a successful outcome for owners.

“If this becomes a purely legal process then I think the legal advice has been very firm that the OC would be successful,” Mr Main said.

However, Mr Main said legal action could take up to three years to be resolved, which would not appease the municipal building surveyor in terms of the compliance of the building.

Mr Main said, while it was important to work in the most collaborative way possible, it was also important that the parties were prepared to take the next steps legally.

A spokesperson for LU Simon said: “LU Simon builders is working with relevant parties to try to resolve the issue. Whilst these processes are underway, and particularly until the separate investigations have concluded, it is inappropriate to comment further.”

Many owners at the meeting expressed frustration that they had been issued with the building orders when they were not responsible for the use of the non-compliant material.

Mr Genco explained that current legislation meant owners were responsible for making the building compliant and had to be issued to building owners individually.

He said the council did not have the option to issue building orders to anyone apart from owners, even if it was found that the developer was at fault.

“The legislation is very, very simplistic and I’ve raised that time and time again previously and especially in my report that’s part of the post-incident analysis, that it really hasn’t kept abreast of modern building structures, multi-storey, multi-owner type buildings that we have here,” Mr Genco said.

In his post-incident report, Mr Genco said the Building Act, in requiring action to be directed to owners did not recognise the OC’s responsibility for shared services or responsibility to act on owners’ behalf when incidents such as the Lacrosse fire occurred.

He said the building notice and order requirements in the Act also did not cater for large, complex buildings.

While questions remain over how the building will be made compliant and who will pay for the work, owners will soon learn the outcome of the Victorian Building Authority’s (VBA) investigation into the conduct of LU Simon and the relevant building surveyor.

Speaking at the October meeting, VBA director of technical and regulation Jarrod Edwards said the investigation was well underway and was expected to conclude by the end of the year.

He said if the VBA found there was misconduct, it would become a matter for the Building Practitioners Board to consider how suitable it was for the practitioners in question to maintain their registration.

He said the practitioners board did not have any authority to direct works relating to rectification.

He said the VBA also had the authority to prosecute before a court of law, however there was no authority to direct rectification works through this process.