Construction and Infrastructure update: Cladding Safety Victoria Act 2020 now in effect

Apr 13, 2021

The Cladding Safety Victoria Act 2020 (the Act) came into effect on 1 February, 2021.

Prior to receiving Royal Assent late last year, a relatively small number of amendments were made to the original version of the Cladding Safety Victoria Bill 2020 (the Bill) which have been outlined below.

Background

In July 2019, the Victorian Cladding Taskforce detailed in its final report that the rectification of combustible cladding on buildings is complex and difficult. It has also become clear that owners corporations are not adequately governed and resourced to deal with complex, large-scale building matters, like cladding rectification.

Taking note of the advice of the Victorian Cladding Taskforce, the Government decided it needed to intervene to support owners of buildings assessed as higher-risk to rectify their combustible cladding. This support includes funding, advice and guidance through the establishment of a standalone entity — Cladding Safety Victoria.

On 3 September 2020, the Victorian Government introduced the Bill for the purpose of, 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;
  • 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.

Amendments to the Bill

On 4 November 2020, the Bill passed and received Royal Assent with relatively few amendments to the original version of the Bill.

The amendments:

  • introduce new clauses into the Bill to amend the Building Act 1993 to clarify the application of the building permit levy to proposed building work that relates to multiple classes of building.
  • provide an additional power to make transitional regulations in relation to calculation of the building permit levy.
  • clarify that where a building permit includes building work that relates to multiple classes of building, the building permit levy payable under section 205G(2A) of the Building Act 1993 is only to be calculated and payable in relation to the cost of building work that relates to one or more classes of building specified in section 205G(2A) and not in relation to a class 1, 9 or 10 building.
  • provide that the new clauses inserted into the Building Act 1993 by this Bill will apply as if they had been in operation on and after 1 January 2020, and enable the Victorian Building Authority to request information from a relevant building surveyor or building permit applicant to enable reassessment and refund of any building permit levy.

Take home points

There are many important changes which have been brought about by the enactment of the Bill into law.

Arguably the most important of these changes is the amendment to the Building Act 1993 to provide that an action for damages for loss or damage arising out of defective building work will be extended for two years beyond the current ten years for those cladding building actions where time to bring an action would otherwise have expired between 16 July 2019 and 12 months after commencement of the Act.

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 cladding products, and on the flip side, builders will need to carefully consider whether they are potentially liable for extended periods of time.

More information

For information on the Act, or advice on how the 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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