New research provides insight on the effects of flammable cladding on owners’ wellbeing

New research provides insight on the effects of flammable cladding on owners’ wellbeing

By Tom Bacon - Strata Title Lawyers

Researchers at the School of Property, Construction and Project Management at RMIT University have published a new study on the links between combustible cladding and the effects on homeowners’ wellbeing.

David Oswald, Trivess Moore and Simon Lockrey conducted an insightful series of interviews with owners living with cladding issues in Australia.

Some homeowners displayed long-term negative emotions and others spent significant time dealing with the cladding issues without accomplishment. Their liveability suffered with changes including making cost-saving decisions on entertainment and holidays, delaying retirement and emerging social tensions with other residents. These lived experience insights highlight the need for improved government support and housing quality policy which considers occupant health and wellbeing both in dealing with the current flammable cladding crisis but also in preparation for future housing quality issues which may emerge in the future.

In the case of flammable cladding, it is often unclear who caused the defect and who should bear the cost of cladding rectification. For example, the Lacrosse high-rise cladding fire in Docklands demonstrated this complexity involved in attributing accountability for building quality issues. A five-year legal battle, found a combination of the architect, fire engineer, building surveyor and builder liable, and they were ordered to pay $5 million in compensation. However, this has not set a precedent for other similarly impacted buildings in Melbourne and elsewhere around Australia. In the Lacrosse case, there was debate around whether the cladding was a “defect” or not be- cause the product used was not a banned product at the time. For other buildings, it is unclear in many cases where in the construction supply chain and regulatory systems, the accountability for non-compliance should lie. For instances, in some projects the builder or the developer or the architect, or the surveyor, or an engineer might specify the product to use for cladding on the façade.

Without clarity on who is accountable for the flammable cladding, there is refusal from those in the building industry to return and fix the problem without payment, and therefore the costs for rectification are being largely pushed onto unit owners, or the matters are being litigated through the courts.

Many of the homeowners first experienced shock when finding out about the flammable cladding on their buildings. They assumed that given the apartments were built recently they would not have serious quality issues or defects.

Regarding financial security, investors expressed financial concerns that was causing mental stress surrounding the uncertainty of their investment. Owner-occupiers also expressed these concerns, and further revealed impacts from the ongoing day-to-day living in a building affected with flammable cladding. Some of those in higher risk buildings felt unsafe in their own properties but others were mostly concerned about the financial implications.

In other cases, the stress of the situation had exacerbated underlying mental health issues, such as anxiety and depression. It was clear that both owner-occupier and investors expressed feelings of stress, anger, anxiety, frustration, and disappointment in the industry and government, following the emergence of the flammable cladding issue. The potential future rectification costs were influencing participant’s lives and changing both their short and longer-term financial capacities. The estimated building rectification costs ranged from $30,000 to $12 million. Typically, this cost has to be shared across all units within a multi-occupancy building as a special levy.

Longer term plans such as being able to retire from the workforce were also being put on hold. Across both the investors and owner-occupiers there was also concern about the impact on the value of their properties.

The university researchers concluded that policy makers must consider these broader wellbeing impacts as packages of support are put together for homeowners, and ensure all impacted homeowners are included in any policy development or support approaches. There have been a range of breakdowns across policy, governance and practice which has led to this flammable cladding crisis.

The current warranties and policies are restricted through an economic lens on the cost of the defect and attributing that cost to those responsible for defect. The results from this study demonstrate that a more comprehensive policy approach is required that can respond to such large-scale defects with significantly higher levels of customer service throughout the entire process •

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