A heads up on the Cladding Safety Victoria Bill

4 minute read  04.09.2020 Jeanette Barbaro, Bianca Pyers

As reported in the media over the last two days, the highly awaited Cladding Safety Victoria Bill 2020 (Vic) (CSV Bill) was introduced into the Victorian Legislative Assembly yesterday and has finally been published this morning.

As reported in the media over the last two days, the highly awaited Cladding Safety Victoria Bill 2020 (Vic) (CSV Bill) was introduced into the Victorian Legislative Assembly yesterday and has finally been published this morning.

If the CSV Bill is passed, it essentially will:

  • establish Cladding Safety Victoria (CSV) as a separate body corporate;
  • prescribe the process by which CSV will administer the cladding rectification program in Victoria;
  • introduce an extended limitation period of 12 years for cladding building actions; and
  • transfer the existing cladding rectification work functions from the Victorian Building Authority (VBA) to CSV.

In more detail

On 3 September 2020, the CSV Bill was introduced into the Victorian Legislative Assembly. The second reading of the CSV Bill was moved this morning (4 September 2020). We expect the CSV Bill will be further debated shortly and is likely to be passed quickly. If passed, the provisions under the CSV Bill will at the latest commence on 1 July 2021, or on an earlier date to be proclaimed.

We have summarised the propose operative provisions of the CSV Bill below.

Establish Cladding Safety Victoria as a separate body

In its current form, the CSV Bill:

  • separates CSV from the Victorian Building Authority (VBA), where it is currently a business unit of the VBA
  • establishes CSV as a body corporate which will administer the cladding rectification program and seek to support Victorians in rectifying and improving the safety of buildings affected by non-compliant or non-complying external wall products
  • provides for the appointment of a CSV board, CSV chief executive officer and CSV staff in its own right
  • will require the CSV board to prepare a 4 year strategic plan and annual work program for approval by the Minister
  • allows CSV to enter into information sharing agreements (including with the VBA)
  • provides for CSV to receive, assess and determine complaints made to it
  • will require CSV to notify the VBA and other relevant persons about compliance and enforcement matters arising under the Building Act (which we expect will be further prescribed in accompanying regulations)
  • generally prevents CSV from disclosing the location of buildings affected by non-compliant or non-complying external wall products.

Prescribe the process for cladding rectification work

The CSV Bill if passed:

  • permits municipal building surveyors to notify CSV of buildings they consider require cladding rectification work, which CSV will then triage according to a prescribed criteria (likely to be set down by forthcoming regulations)
  • CSV is to determine if the buildings referred to it will be registered in its program and if it will grant financial assistance for the cladding rectification work (including the amount to be loaned and whether rectification works are required to mitigate the risks posed by the non-compliant or non-conforming external wall cladding products pending rectification)
  • where CSV does determine it will grant financial assistance for cladding rectification work, CSV must enter into a funding agreement with the affected building owner or owners corporation
  • upon completion of any cladding rectification work under a funding agreement, CSV must notify the Minister, the VBA and the relevant municipal building surveyor of its completion
  • states that buildings already determined to be eligible for receiving financial assistance under the current arrangements will be deemed to have followed the process set out above

New limitation period for cladding building actions

It is proposed that the CSV Bill:

  • will amend the limitation period under section 134 of the Building Act from 10 years to 12 years for cladding building actions (which are defined to be actions ‘in connection with, or otherwise related to, a product or material that is, or could be, a non-compliant or non-conforming external wall cladding product’)
  • the building owners and owners corporations that will benefit from the extended limitation period include those building owners and owners corporations whose cladding building actions became time barred after 16 July 2019 and within the period of 12 months of the new provisions coming into effect
  • the extended limitation period is intended to provide building owners and the State with additional time to conduct due diligence and investigations to determine if legal proceedings should be brought against relevant building practitioners, which will effectively permit the State to recoup funding provided under the cladding rectification program.

Right of subrogation to CSV

The CSV Bill currently intends that:

  • where CSV grants financial assistance to building owners and owners corporations, this will trigger rights of subrogation to the State, entitling the State to bring proceedings against relevant building practitioners to recover the funded cladding rectification costs
  • where the State has previously granted financial assistance to building owners and owners corporations, the rights of subrogation will be unaffected and remain with the State

Transfer of functions

As it stands, the CSV Bill will:

  • remove the existing cladding rectification functions which currently reside with the VBA and transfer them to CSV
  • require the VBA to pay to CSV amounts remaining in the Cladding Safety Victoria account of the Victorian Building Authority Fund
  • substitute the VBA with CSV under existing agreements such that the rights and liabilities are intended to become those of CSV.

We will let you know when the CSV Bill has passed and any variations that may be enacted.

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https://www.minterellison.com/articles/a-heads-up-on-the-cladding-safety-victoria-bill