At Strata Plan, we’re very passionate about cladding safety. We’ve posted a few articles talking about it, and with over 1,000 customers not having to pay almost $11,000,000 for cladding rectification out of their own pockets, we have come to realise that for some, the topic of cladding might seem too technical. 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.
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?
- Special levies that were needed to cover the costs of the rectification.
- Potential increase in 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 relieved that the program makes their homes safer by reducing the risk associated with combustible cladding.
Strata Plan has assisted at least eight (8) buildings as of today’s date, resulting in over 1,000 owners saving almost $11M for their cladding rectification works.
Although Strata Plan’s assistance does not affect the result of Cladding Safety Victoria’s decision, our resilience, assistance, and expert guidance make the experience of organising and submitting the required paperwork a hassle-free one.
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 a property is considred for cladding rectification funding (either via MBSs or through the Statewide Cladding Audit), there is no guarantee for the funding. That’s why there is a requirement to securing the right documents, making sure the submissions are correct, and eventually engaging with various stakeholders. However, thanks to our expert team, you, (our customers) don’t have to do this alone, and instead can enjoy a hassle-free experience with the assistance of an expert team.
What are the benefits of having a building’s cladding rectified?
First 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, which can help minimise damage until help arrives and allow you more time to egress. 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 Value
When 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 potentially increase the asking price of your property.
Decrease Your Insurance Premiums
Everything 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 Efficiency
Cladding 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 potentially improve your energy costs.
So, in summary, cladding is important, there’s a program that helps fund rectification works for buildings at higher-risk(6) and to date, we have assisted our customers in saving almost $11M (or $10,000 per lot owner) in rectification costs. Although Strata Plan’s assistance does not affect the result of Cladding Safety Victoria’s decision, our resilience, assistance, and expert guidance make the experience of organising and submitting the required paperwork a hassle-free one.
To non-Strata Plan customers, here is our final question: When was the last time your OC manager saved you 10K?