New cladding regulation – Does your building need rectification?

In response to the tragic Grenfell Tower fire in London in 2017 and the Lacrosse apartment building fire in Melbourne in 2014, the Queensland Government has introduced new regulations regarding combustible cladding.

The regulations provide for a three stage process, undertaken through an online system, to identify and manage buildings affected by combustible cladding.

When did it start?

The regulations took effect from 1 October 2018.

Who must comply?

The regulations impose obligations on privately owned buildings which:

  • Are class 2-9 buildings (residential and commercial buildings, other than houses and other low-rise residential use buildings);
  • Are of Type A or Type B construction; and
  • Were given approval to build, or alter cladding between 1 January 1994 and 1 October 2018.

Note that a body corporate is regarded as the owner where the buildings are comprised of more than one lot. Thus, the obligations under this process will fall onto the body corporate when a building contains two or more lots.

What are the obligations?

The regulations establish a three stage process.

Stage 1 – 29 March 2019

By 29 March 2019, owners must:

  • register their buildings on the Safer Building Website; and
  • Complete the online Combustible Cladding Checklist (Part 1).

This stage will determine whether further action is necessary.

Stage 2 – 29 May 2019

By 29 May 2019, owners must:

  • Complete the online Combustible Cladding Checklist (Part 2); and
  • Lodge a building industry professional statement through the online system.

Stage 3 (Part A) – 27 August 2019

By 27 August 2019, owners must:

  • Engage a fire engineer to prepare a building fire safety risk assessment; and
  • Register the name and registration of the fire engineer through the online system.

Stage 3 (Part B) – 3 May 2021

By 3 May 2021, owners must:

  • Complete the online Combustible Cladding Checklist (Part 3); and
  • Lodge the building fire safety risk assessment through the online system.

The fire safety risk assessment may determine whether rectification may be necessary.

Beyond Stage 3

Within 60 days of receiving the fire safety risk assessment, where the cladding is non-conforming, building owners must:

  • Display a notice, in the approved form, in a conspicuous position at the entrance to the building and near the fire indicator panel;
  • Provide a copy of the fire safety risk assessment to all owners and tenants, if the building is comprised of more than 1 lot; and
  • Disclose non-conforming cladding to prospective purchasers if the building is part of a community titles scheme.

Such obligations will cease if the combustible cladding is removed from the building or a private certifier gives notice that the combustible cladding complies with the Building Code of Australia.

What if the building is sold?

If the building is sold during the process, the original owners must:

  • Give the new owners notice in the approved form as to the extent the original owner has complied with the process;
  • Give the new owners copies of each of the relevant documents; and
  • Give the QBCC a copy of the notice given to the new owner.

Disclosure may also be necessary by owners of lots belonging to a community titles scheme. Failure to disclose may lead to a claim for breach of a warranty under Section 223 of the Body Corporate and Community Management Act 1997 (Qld). A breach of a warranty will give rise to a right of termination under Section 224.

Implications

  • The regulatory process places obligations on the owners of private buildings.
  • Private building owners may be required to take action to rectify their buildings as part of the regulatory process.
  • Required rectifications will be determined by the fire safety risk assessment as part of stage 3 of the regulatory process.
  • If you own a building affected by the legislation or a lot in an affected building, you must provide the necessary disclosure.

Even if the process has not yet commenced, you may have disclosure obligations at general law and it is important to address this issue in any sale contract. There may also be immediate insurance implications in the wake of the new legislation which affected owners should investigate.

Macpherson Kelley has extensive experience in the property and construction sectors. To ensure you comply with the regulatory process, contact Macpherson Kelley on 07 3235 0400.

This article was written by Ryan Prygiel, Administration Assistant and Cathy Russo, Principal Lawyer – Property and Construction.