Blocks get together to fight crippling cladding bills

Apartment owners facing bills of as much as $60,000 per unit to fix flammable cladding are being invited to join together in an effort to force developers to foot the massive bills involved in removing and replacing the potentially deadly panels.

Unit owners lobby group the Owners Corporation Network says it is offering to help the owners in the 435 apartment blocks targeted by the NSW government as having the same kind of cladding that caused the deadly Grenfell Tower fire in the UK last year.

The OCN has said all residential owners facing potentially huge financial hits due to flammable cladding should contact them without delay with a view to joining its Flammable Cladding Action Group.

“Our organisation has seen the benefits of strata owners pooling resources to resolve shared challenges,” says Karen Stiles, the organisation’s  Executive Officer.

Earlier this year the OCN ran a successful campaign to persuade the NSW government to allow individual apartment blocks to pass by-laws limiting commercial short-term holiday rentals like Airbnb. The resulting new laws have been hailed as the most apartment-owner friendly in the world.

Now they are setting their sights on the buildings in NSW most likely to have the problem which have been ordered by the government to check their cladding and deal with it.

“We know that 435 buildings out there have just been told to change their external cladding because of fire safety issues” says Karen Stiles, the organisation’s  Executive Officer.

“We also understand the significant challenges facing Strata Committees as they grapple with financing and project management on behalf of their schemes” she said.

OCN says it offers the opportunity to pool resources to get the best options for recovering costs from whoever is responsible for installing the panels in the first place. That may include negotiating with reliable and proven strata legal firms to run class actions.

Leading strata finance lender Lannock says they are standing by to offer financial help to affected buildings.

“Whether it’s helping with legal action or covering the cost of actually removing and replacing the cladding, we are ready to help the OC turn their collective influence into action,” says CEO Paul Morton.

Lannock last month announced an $11 million loan to the owners of the Lacrosse building in Melbourne, which suffered a cladding fire three (???) years ago, and is in the midst of a legal battle over who should ultimately pay.

In Victoria, where the warranty for building defects is 10 years, their state government Cladding Taskforce is visiting affected buildings, and advising them on how to minimise their risk until the problem is resolved.

Meanwhile Melbourne law firms are grouping blocks that were built by the same developers to run class actions, “turning David versus Goliath battles into Goliath versus Goliath fights,’ as one source put it.

In NSW the responsible minister, Matt Kean of Innovation and Better Regulation, has gone on record as saying that he believes developers should pay.

He has also claimed that his government has had the “most comprehensive response” in Australia but, so far,  there has been no hands-on assistance for affected buildings.

And, as has been noted more than once, justice in NSW strata is often determined by who has the deepest pockets.

However, for those buildings that are out of warranty, which is six years for major defects in NSW, OCN say its Cladding Action Group will identify the best expert advisers to help manage the rectification projects, identify and evaluating funding options and manage insurance issues.

They also say they will explore the potential for collective purchasing power to keep costs down and “provide coherent and effective input to Government on the issue.”

Karen Stiles says time is of the essence on the issue as the risk has to be dealt with and owners corporations have no choice in removing and replacing flammable cladding at their own expense.

She says affected buildings should contact her directly on  02 8197 9919 or by email  at eo@ocn.org.au as soon as possible!

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