A majority opposition party committee report was released on 30 April 2020 that is the latest and perhaps the most politicalised report so far on the building defects crisis. The evidence given to the committee is therefore more important for now than its recommendations that are likely to fail along party lines. recommendations. The evidence tells us what is going on in the market. This post is confined to cladding rectification issues dealt with by the report.

Combustible product scope is increasing

The focus of this final report is cladding in NSW. To date the regulatory spotlight has been on aluminum composite panels(ACP) that accelerated the fires in <Grenfell>, London and <Lacrosse>,Melbourne. The regulatory scope on combustible products is expanding to include high pressure laminate. This was the fire accelerant involved in The Cube fire,in London in November 2019. There was no ACP cladding in that building. High pressure laminate is also widely used in Australia. Biowood has also been identified as flammable and non-compliant with the BCA but has not been banned.

Regulatory enforcement is not going well

The evidence shows the NSW government response to the crisis has been poor compared to Victoria, and to a lesser extent Queensland. The NSW Building Commissioner, David Chandler gave evidence he is not yet in charge of cladding. There is evidence from state and local authorities that there is a lack of clarity and mixed messages about who is responsible for what in addressing rectification of existing buildings. There are long delays in council enforcement and fire authority assessment of solutions due to lack of funding, management and leadership.

Conflicting numbers

There is conflicting evidence on the number of buildings affected. The official numbers are that of 4127 buildings assessed in NSW (all types of buildings with no separate figures available for residential strata) there are 463 in the highest risk category (life safety at risk) and136 of these have begun ‘moving towards rectification’. There are 271 building in the 463 high risk category that are over 4 storeys (meaning no homeowners insurance for residential owners). There is considerable doubt about the accuracy of the numbers. Some local and state government officers gave evidence of there being as many as three different cladding registers circulating and they contain different buildings. The fire employees union believe there are 3,500 buildings in NSW with flammable cladding.

Newcastle is a striking example of regulatory failure. There are 45 buildings in Newcastle identified as having combustible cladding. Only 1 has been rectified. There are 10 in the highest risk category(lives at risk). Not one of the owners of these 10 buildings have been told by the local authority they are at risk. When asked why, the city council officer said the local fire brigade knew about them.

Government has decided to keep the register confidential.

Owners angry, confused and strata manager sill-equipped to help

Strata owners report initial assessment costs of $5,000, fees of $20,000 to $40,000 for early rectification work design and approval, and special levies for rectification of between $50,000 and $100,000each.

The evidence shows rectification response for residential strata owners is being hampered by:

• Delay and confusions about testing
• Insufficient fire engineers able to access and afford rising PI insurance for flammable product rectification advice
• No certainty about safe replacement products
• In-experienced strata managers(admitted by the CEO of the strata peak body)
• Strata committees concealing defect reports that would negatively impact property values.
• Lack of knowledge and inexperience of strata committee members

The committee’s proposed solution to this is the appointment of strata commissioner to help with training, support and advice to strata committees.

There is really nothing in the recommendations that will likely change the situation that rectification in NSW will be a hard-slow process.

I remain of the view that remediation is likely to be led by suppliers, insurers and purchasers who will pay less for property without proof of remediation.