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NSW isn't planning to provide financial support to building owners and strata bodies hit with rectification orders under the Building Products (Safety) Act.

If rectification orders are not acted upon owners or strata bodies can be hit with fines totalling $110,000 per day until the matter is addressed.

NSW won't even provide financial support for residential buildings despite the high cost of replacing the dangerous cladding.

Victoria provides low-interest, long-term loans to building owners to replace the combustible polyethylene-core aluminium cladding.

Victorian Planning Minister, Richard Wynne, introduced legislation to create Cladding Rectification Agreements between building owners, local councils and lenders.

The low-interest loans are guaranteed by local authorities through their rates system.

Owners can pay back the loans through their rates over a minimum period of 10 years.

If they sell the property in the meantime, the outstanding cost will transfer to the new owner.

The introduction of the rectification agreements are part of recommendations made by Victoria's Cladding Taskforce. Wynne said it is only available for residential buildings.

"This scheme is the first of its kind anywhere in the world and offers owners the cheapest and most efficient way of fixing their buildings," Wynne said.

The NSW government has no plans to follow suit although Fire and Rescue NSW reviewed 185,000 buildings and identified 435 as potentially high risk, demanding owners and building managers take action.

While the names and addresses of these buildings have not been made public, owners of a 19-storey building in Pyrmont face a $7 million replacement bill.

Meanwhile, the owners of the 328 apartments in Melbourne's Lacrosse residential tower begn their long awaited case for damages against builder LU Simon earlier this month.

The Lacrosse owners are seeking $24 million in damages over the combustible cladding on their building which contributed to the spread of a fire in their building in November 2014.

They are seeking $10.7 million in recladding costs, $1 million in lost rent and emergency accommodation costs and over $500,000 in insurance premium hikes. In the interim the Lacrosse owners are in the process of finalising an $11 million loan to replace the cladding.

The Lacrosse owners are just one group of a number of apartment owners across Australia dealing with the cladding problem.

Victoria identified 1400 buildings with combustible and potentially dangerous cladding that has to be replaced. Other states are undergoing a similar process.

Queensland identified 1200 buildings in a state audit while South Australia is going through a similar process.

Last month a ban was introduced in NSW which could lead to fines up to $1.1 million for using cladding with a core comprised of more than 30% polyethylene.

The statewide prohibition affects any form of combustible building material used in external cladding, external walls, external insulation, facades or rendered finishes for multi-storey residential and commercial buildings.

Queensland will enact legislation next month that will also require owners to change combustible cladding, it is also likely to include penalties.

According to a report in the Australian Financial Review (AFR), the Lacrosse owners have seen their annual insurance premiums inflated by 80 per cent due to the ongoing presence of the cladding on their building.

Since 2016, as much as $534,270 out of the total $1,023,209 paid in insurance was attributable to cladding-related premium rises, Owners Corporations chairman Jeffrey Dawson said in a witness statement.

 

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