Flat Chat sponsor Lannock Strata Finance has welcomed the decision by the NSW Government to cover the interest on commercial strata loans taken out to pay for the removal of high-risk combustible cladding from residential apartment buildings across the State.
“It’s important that government recognises combustible cladding as a critical risk issue to the community,” says Lannock CEO Paul Morton.
“To acknowledge the problem and commit to helping owners fund the rectification is definitely a step in the right direction”.
The state government is not planning to pay for the removal and replacement of flammable cladding on more than 400 NSW apartment blocks (as called for on a recent episode of the Flat Chat Wrap podcast).
But covering the interest payments of commercial strata loans may allow strata schemes to proceed with remediation, rather than wait for the outcomes of class actions against developers and builders who installed the kind of dangerous cladding that caused the horrific Grenfell Tower fire in London three years ago.
Meanwhile the government’s $139 million, three-year program, called Project Remediate, will coordinate efforts and provide technical advice for the “hundreds of the most at-risk buildings”.
“We’re not taking any chances when it comes to the safety of people living in buildings identified as being at high-risk from combustible cladding,” Minister for Better Regulation and Innovation Kevin Anderson said in a press release this week.
“Our priority is removing unsafe cladding from buildings as soon as possible, which is why we have allocated up to $139 million to co-ordinate the remediation process for affected buildings.”
Mr Anderson said the centrepiece of Project Remediate was a Government commitment to pay the interest on loans by commercial lenders to building owners and owners corporations, fast-tracking the removal of unsafe cladding.
“Owners have asked for financial and technical support to help them manage the process and this package will make it happen,” Mr Anderson said.
Mr Anderson said the program would also support significant construction activity and generate thousands of jobs in the sector.
“Not only will this program benefit those living in buildings with unsafe cladding, it will also drive economic recovery with the creation of 3,500 jobs as we begin to recover from the unprecedented impacts of COVID-19,” Mr Anderson said.
“With many buildings now ready to commence removing combustible cladding, now is the right time to provide this support.”
With buildings no safer now that they were when the dangers of combustible cladding were first identified, time may be of the essence.
“A Lannock strata loan allows owners to start work on rectifying combustible cladding and resolve occupational health and safety issues as quickly as possible,” says Paul Morton.
“Many owners in the current COVID-19 affected economic climate would face difficulties in obtaining personal finance or increases to their mortgages in order to be able to fund a special cladding levy.
“Lannock looks forward to working with both government and owners affected by combustible cladding to assist in finding them the ideal funding solution.”
Final details on the program design and loan scheme will be announced in December.
Eligible building owners and owners’ corporations will be contacted and invited to participate in Project Remediate. Further information and an online form to register for updates can found at www.nsw.gov.au/project-remediate.