Inflammable Cladding Update

NSW passes the Building Products (Safety) Act 2017.

inflammable-building-claddingNSW wasted no time in acting on the Senate’s recent recommendations to ban inflammable cladding as a building product.

On 30 November the Building Products (Safety) Act 2017 received assent.

The Act aims to prevent the installation of unsafe building products in the future and empowers the Commissioner for Fair Trading to order the removal of cladding from affected buildings.

This swift response is practical but the age-old question is who ultimately pays the price?

It is building owners that will receive the orders to remove the cladding. How will the materials in practice be removed, how much will the process cost and where does liability ultimately fall are all vexed questions.

The Act introduces extensive powers of investigation to enable the Fair Trading Commissioner (Secretary) to identify unsafe building products, and the buildings affected. The powers include inspection and search of premises, recording of interviews and requiring the production of documents from builders, suppliers, manufacturers and importers.

A building product is unsafe if its use poses a ‘safety risk’ – being the use of a building product if ’any occupants of the building are or will likely be at risk of death or serious injury’ arising from its use. A safety risk includes that arising in the event of fire.

Once the product is identified as an unsafe building product its use can be prohibited by a ’building product use ban’. Buildings are identified in ’affected building notices’. These decisions apply retrospectively and NCAT has power to review them.

Authorised officers, including councils, may then issue a ‘building product rectification order’. Products that comply with the NCC can be banned and compliance with the NCC is not a reasonable excuse to contravene a rectification order. Rectification is by elimination or minimisation.

Whatever the scope of rectification it will be costly and disruptive for home-owners, likely to be primarily Owners Corporations. OCs are also under a strict duty to repair and maintain common property which arguably includes the rectification work. The Commissioner has stiff powers of enforcement including Supreme Court injunctive relief. Fines for the contravention of a product ban can be for up to $1.1m for corporations.

Disgruntled or impoverished OCs may look to the builder. The Act amends the scope of ‘major defect’ within section 18E of the Home Building Act 1989 to specifically include:”(c) the use of a building product (within the meaning of the Building Products (Safety) Act 2017)’. Thus building owners have 6 years to sue the builder who installed the now banned product. This may not be long enough for many home-owners. The clock is now ticking.

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