Construction and Infrastructure update: Limitation period for cladding building actions extended to 15 years

Nov 3, 2021

Last month, the Building Amendment (Registration and Other Matters) Act 2021 (the Act) came into effect.

The main purpose of the Act is to amend the Building Act 1993 (Building Act) so as to continue reforms to implement a new registration and licensing scheme for tradespeople who perform building work in Victoria, and to provide clarity on the obligation to pay maintenance costs for essential safety measures in certain retail premises.

However, the Act also makes an additional (and significant) amendment to the Building Act in respect of the limitation period for cladding building actions.

In our Construction and Infrastructure update published on 13 April 2021, we commented on the amendments to the Building Act which were made by the Cladding Safety Victoria Act 2020 and, in particular, the extension of the limitation period contained in section 134 of the Building Act for certain building actions (from 10 years to 12 years).

This latest amendment extends that previous extension even further.

Limitation period for cladding building actions

Prior to the enactment of the Cladding Safety Victoria Act 2020, parties were unable to bring a building action more than 10 years after the date of issue of the occupancy permit in respect of the building work 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.

The Cladding Safety Victoria Act 2020 amended the period for a building action that is a cladding building action from 10 years to 12 years, provided that the building action has, or would have, become prohibited due to the limitation period contained in section 134 of the Building Act on, or after, 16 July 2019 but before 1 December 2021.

This amendment opened up a rather narrow window for the limitation period to be extended for certain building actions.

The amendments to the Building Act, introduced by section 49A of the Act, now extend that 12-year period to 15 years for a building action that is a cladding building action that has, or would have, become prohibited due to the limitation period contained in section 134 of the Building Act on, or after, 16 July 2019 but before 1 December 2023.

In the press release from the Office of the Premier of Victoria, the Hon. Daniel Andrews MP said that the extra time means that owners can now prioritise cladding removal without needing to urgently commence recovery proceedings, recognising the complexity of beginning cladding-related legal action, as well as the impacts of the coronavirus pandemic.

Take home point

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, Senior Associate, on (03) 8600 8851 or djbrown@kcllaw.com.au.

Author

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

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

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