The up-front cost of removing dangerous combustible cladding was financially crippling for many Victorian apartment owners, until today.
Owners were faced with massive rectification bills as well as the difficulty of selling their property with existing issues.
Today, thousands of apartment owners across Victoria will be rejoicing as a new loan scheme has been introduced by the Andrews Labor Government.
Owners are finally receiving a break in the form of a low-cost loan that can be paid off on their council rates. Minister for Planning, Richard Wynne, said ‘the scheme is the first of its kind anywhere in the world and offers owners the cheapest and most efficient way of removing dangerous cladding from their buildings’.
The Minister has announced changes to the Local Government Act that will create Cladding Rectification Agreements (CRA).
CRAs will be similar to existing Environmental Upgrade Agreements, which enable owners to upgrade their homes to make them more environmentally friendly.
Read related: Owners face huge bills to fix apartment fire risk
The arrangement will be between owners (or owners corporations), lenders and local councils – providing long-term, low-interest loans to pay for building work to rectify cladding.
Owners would be charged via their rates over a minimum period of ten years, with costs transferred with the property if it sold in the loan period.
Such an arrangement was a key recommendation of the Victorian Cladding Taskforce established last year and chaired by former Premier Ted Baillieu and former Deputy Premier John Thwaites.
The Victorian Building Authority (VBA) has almost completed its audit of 1,369 planning and building permits, and has issued more than 100 building orders to residents.
The Planning Minister added ‘As well as making properties safe and compliant with building laws, these financing agreements allow cladding to be removed quickly, without affecting property prices’.
The cladding removal loans announcement comes as a welcome relief for unsuspecting apartment owners that were hit with a financial bombshell.