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Non-compliant building products: Combustible cladding

Non-compliant building products: Combustible cladding

By Lachlan Ingram

Practice & Procedure Real Property 

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What’s the problem?

So I keep hearing about ACP, ACM, EPS and combustible cladding. Why is that? 

Aluminium Composite Panelling (ACP) has been described as the new asbestos. It is a building product which has been attached to the exterior of literally thousands of residential and commercial multi-storey buildings in Victoria alone. 

Unfortunately, depending on its ‘core’, an ACP panel can be almost as flammable as petrol. ACP was a significant factor in the spread and intensity of the Lacrosse fire in Docklands in November 2014, and the horrific Grenfell fire in London in June 2017 which killed 72 people. These aren’t isolated events - there have been at least 20 fires related to ACP, expanded polystyrene foam (EPS) and other combustible cladding products since 2005, with one occurring in Malaysia in mid-February this year. 

Who does it affect?

Everyone in the construction and property industries. 

In Victoria there’s a ten year limitation period for ‘building actions’, commencing from the date the occupancy permit for the building was issued. Any person in the last ten years who has designed, manufactured, supplied, specified, signed off, or installed one of these products could find themselves facing legal or regulatory action.   

Property owners may be issued with a notice by their local council to remove and replace combustible cladding attached to their building. That will hit their hip pocket (especially when combined with increased insurance premiums) and they’ll be looking at those listed above to recover some of those losses. So too will property investment funds, with large portfolios suddenly less valuable and harder to insure.

Let’s not forget insurers who have provided property damage policies, and lenders who have valued and secured properties, unaware that a building is clad in a dangerous product.  

What’s the answer?

Queensland, New South Wales, Tasmania, and South Australia, have developed varying legislative responses, from placing liability on the entire supply chain to letting the problem lie with owners.  

The Victorian Cladding Taskforce released an interim report on 1 December 2017, calling for the VBA to audit thousands of private residential multi-unit Victorian apartment buildings of three storeys or more, and public-use buildings of two storeys or more.

In the meantime, some owners are taking matters into their own hands by issuing proceedings against builders, architects and building surveyors, leaving those professionals to notify their insurers and seek to shift liability amongst themselves, and to the manufacturers and suppliers of the products. 

This leads to lawyers deploying their skills in fields like negligence, statutory warranties, contract and insurance law. What’s the answer to the combustible cladding crisis? This is a shifting industry and legal landscape and only time will tell.

Lachlan Ingram, Senior Associate, Holding Redlich

 

Want to find out more? Register for the LIV’s Construction Law Intensive on 15 March where Lachlan Ingram will be speaking on the above issues and more. The Intensive will also cover key developments in building and construction law and how to manage legal risk in construction matters. Don’t miss this opportunity to broaden your understanding of building and construction law and grow your practice in this area.

 


Disclaimer: Views expressed by commentators are not necessarily endorsed by the Law Institute of Victoria Ltd (LIV). No responsibility is accepted by the LIV for the accuracy of information contained in the comments and the LIV expressly disclaims any liability for, with respect to or arising from any such views.

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