Our team has come to the realization that maybe the reason for these posts isn’t very clear. So, we’ve decided to write this post and keep you guys up to speed.
Do you ever wonder why it’s such a big deal for us?
So, we have been harping on about Cladding Safety Victoria and the 600M dollar program that looks to make Victorians (that’s YOU!) safer by reducing the risk associated with combustible cladding on residential apartment buildings and publicly owned buildings.
I guess we never really stopped to consider: are our readers getting lost in all the jargon?
What Is Cladding?First, to ensure that we are all on the same page, let’s discuss what cladding is all about.
Cladding is the cover or overlay on your property. This is a material that is applied to provide a skin or layer over another surface. It can be used to provide thermal insulation and weather resistance. It can have a dramatic impact on your property, not only in protecting it from the elements and other potential damage but also providing a beautiful look and can save you a lot of money in the long run.
Cladding comes in several types of materials. It can be wood, metal, vinyl, brick, or a composite material that could include aluminium, wood, or other materials combined using cement and polystyrene. It is an incredibly effective way of adding an additional layer to your property that helps to protect against damage from rain, wind, hail while also providing thermal insulation, improving the energy efficiency of your property.
Ok, so now we got that out of the way, here’s the context:
In October 2018, the Victorian Cladding Taskforce identified 354 buildings they considered low/moderate-risk and 275 that were determined to be high/extreme-risk buildings in a cladding audit that was conducted state-wide.
It was found that the estimated cost to make these buildings safe would have cost billions. Can you imagine? BILLIONS.
Unfortunately, state governments provided only a limited amount of funding to rectify only the high-extreme risk buildings. That meant that the owners corporations in lower-risk buildings were left to try to figure out how to fund the work on their own.
What Are the Costs Owners Face?Last week, a published paper looked at the accumulating financial costs beyond the rectification work itself, looking at other costs involved. This included:
- Special levies that were needed to cover the costs of the rectification.
- Higher Owners Corporation fees
- The burden of rising insurance premiums.
- Increased legal fees.
- The need to fix issues related to fire safety/essential safety building assets
- A possible loss in the value of the property.
As one owner put it: “We’ve (owners’ corporation) had to put the levies up and then we’d have rates of special levies for the legal fees and the fire engineer’s report as well […] And we still have cladding on the building.”
These types of financial burdens are having a significant impact on the decision-making process, explained one owner.
“I really want to retire in two years […] how will I be able to pay for all of this (cladding rectification)? I don’t know […] It might be the case that I then have to actually sell a defective unit.”
While it’s unfortunate that a number of Victorian owners corporations have experienced this, over 1,000 Strata Plan customers are enjoying the Cladding Safety Victoria benefits.
Strata Plan has helped at least eight (8) buildings as of today’s date, saving over 1,000 owners almost $11M- that’s almost 2% of the total Cladding Safety Victoria’s budget.
You might ask, why do this? Is this part of the regular job of an Owners Corporation Manager? Well, we do it because we care about YOU. We care for our customers.
Your next question might be: Is this a difficult process? See, when you apply for cladding rectification funding, you must complete the process of securing the right documents, making sure the submissions are correct, and engaging with various stakeholders etc. however thanks to our expert team, you, (our customers) don’t have to do this, and instead can enjoy a hassle-free experience.
What are the benefits of having your cladding rectified?
Safer PropertyFirst and most importantly, is that it makes your property safer. The cladding is fire-resistant, so should you have a fire occur outside your structure, you can feel safer inside knowing that the cladding is providing an important layer of protection between you and the fire. In a situation where minutes count, where every second counts, having that additional time can be crucial, and the cladding will do just that for you.
Increase Property ValueWhen your property improves aesthetically, and has compliant cladding, you can be sure that the value of that property is going to rise. Others who may be interested in purchasing your property are going to see the value of your rectified cladding, allowing you to increase the asking price of your property.
Decrease Your Insurance PremiumsEverything you do that protects your property increases its value. It also lowers your insurance costs, and it can help to reduce the insurance premium on your property which is more money in your pocket (on top of the money you didn’t have to spend to rectify the cladding).
Improved Energy EfficiencyCladding acts as insulation as well therefore during the warmer months, your air-conditioner won’t have to work too hard, and during the winter your heater won’t feel much of the strain. This can improve your energy costs.
So, in summary, cladding is important – We have helped saved a total of $10,960,703.58 for over 1,000 owners which is more than $10,000 per person.
To non-Strata Plan customers, here is our final question: When was the last time your OC manager saved you 10K?