Construction and Infrastructure update: New extension of time proposed for Victorians seeking cladding cost claims

Sep 7, 2020

On Thursday 3 September, the Cladding Safety Victoria Bill 2020 (the Bill) was introduced into parliament by the Hon Lily D’Ambrosio.

The purpose of the Bill is, in part, to:

  • establish a stand-alone entity called Cladding Safety Victoria for the purposes of administering a cladding rectification program, including the facilitation of cladding rectification work for government buildings (Cladding Safety Victoria is currently connected with the Victorian Building Authority);
  • transfer functions in relation to cladding rectification work from the Victorian Building Authority to Cladding Safety Victoria; and
  • amend the limitation period for specified building actions relating to non-compliant or non-conforming external wall cladding products.

Extension of time for cladding claims

Currently in Victoria, building actions can be brought up to 10 years after:

  • the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied); or,
  • if an occupancy permit is not issued, the date of issue (under Part 4 of the Building Act) of the certificate of final inspection of the building work.

If the Bill is passed in its current form and given royal assent, it will mean that Victorians may have an additional 2 years to commence building actions in respect of non-compliant or non-conforming external wall products.

The purpose of this extension is to provide the State and building owners with additional time to conduct due diligence activities to identify relevant building work and building practitioners against whom to bring legal proceedings. It is also intended that these activities will have a deterrent effect on the building industry and will assist the State to recoup costs associated with the cladding rectification program.

Proposed requirements for extension of time

The Bill, in its current form, provides that Victorian’s will be able to bring a building action more than 10 years but less than 12 years after:

  • the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied); or
  • if an occupancy permit is not issued, the date of issue (under Part 4 of the Building Act) of the certificate of final inspection of the building work,

if:

  • the building action relates to a product or material that is or could be a non-compliant or non-conforming external wall cladding product; and
  • the building action has become or becomes prohibited on or after 16 July 2019, but before 12 months after the commence of clause 53 of the Bill (by operation of section 134 of the Building Act).

For consideration

KCL Law have assisted a number owners’ corporations and builders commence or defend building actions in respect of non-compliant or non-conforming external wall cladding.

If the Bill in its current form becomes legislation, it may have a significant effect on parties’ rights and liabilities.

Victorian home owners and owners’ corporations will need to carefully consider whether they may now have an entitlement to commence a building action in respect of non-conforming or non-compliant external wall cladding products, and on the flip side, builders will need to carefully consider whether they are potentially liable for extended periods of time.

KCL Law will provide a further update regarding the Bill as it progresses through parliament.

More information

For information on the Bill, or advice on how the proposed changes may impact you, please contact Darren Cain, Principal Lawyer, on (03) 8600 8835 or dcain@kcllaw.com.au, or Dominic Brown, Associate, on (03) 8600 8851 or djbrown@kcllaw.com.au.

Author

This Construction and Infrastructure update was authored by Dominic Brown, Associate.

Note: This update is a guide only and is not intended to constitute legal advice.

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